Asset Protection & Paying
the Cost of Long Term Care
Asset Protection & Paying the Cost of Long Term Care
The cost of long term care is increasing. Baby boomers are surging toward retirement years. Did you know that neither Medicare nor Obamacare pay for long term care? You are on your own!
If you want statistics, we can show you numbers but it is enough to know that it is highly probable that most people will need some form of assistance as they age and become increasingly frail.
One factor is whether or not it is realistic for aging baby boomers to depend upon their children to step away from the needs of their own families and careers to provide the necessary care. Even if there is such willingness, often the level of care required exceeds what can be safely provided by family members.
Are you telling yourself that you are self-insured? Do you really have at least $300,000 set aside now to take care of yourself later? Or are you convinced that, “when the time comes,” you’ll take the matter into your own hands and end your declining health quickly? Assisted suicide is illegal; and statistics reveal that the claims to commit suicide are rarely acted upon because life feels precious to most of us at any age and condition.
If you are still reading, you should be having a sense that you’d better do something. But what can you do? If you are reasonably healthy, Long Term Care Insurance might be a good option. We can help you with Long Term Care Insurance, possibly building from a life insurance policy that might not seem as necessary as it once did. If you are a wartime veteran, we can point you towards a couple of benefits that give you a head start. Depending on your age and assets, maybe an irrevocable trust would be a good option. Under current laws, we do not usually recommend the revocable living trusts that are pushed by some attorneys, who we imagine are wasting your money in good faith because they do not fully understand the complexity of the long term care options and government regulations.
It is hard to think about long-term care when you have immediate challenges in your life such as raising a family, building a career, and paying off a mortgage and college expenses. By age 55, you really need to have a check up to get a sense of your options, although if you have the discipline to focus at a younger age, you likely will feel rewarded for doing so. It is sad but not uncommon when an unexpected change in health occurs and takes away options that would have been available if planning had started earlier.
Why not schedule an appointment with us to check out your options so you can have an idea of what small steps you can take now to avoid heartache later? We also hold free public seminars which provide an overview of important issues for seniors.
For additional information or questions, give us a call at 717-697-3223.
Power of Attorney
A Power of Attorney can be used to give another person the right to sell a car, home, or other property in the place of the maker of the Power of Attorney. A Power of Attorney might be used to allow another person to sign a contract for the maker of the Power of Attorney (the person who makes a power of attorney is called the “principal”). It can be used to give another person the authority to make health care decisions, do financial transactions, or sign legal documents that the principal cannot do for one reason or another. With few exceptions, Powers of Attorney can give others the right to do any legal acts that the makers of the Powers of Attorney could do them themselves. A General Power of Attorney gives the “power of attorney Agent” or simply “Agent” (the legal name of the person who is authorized to act for the principal) very broad powers to do almost every legal act that the principal can do. When Elder Law Attorneys draft general Powers of Attorney, they still list the types of things the Agent can do but these powers are very broad. People often do general Powers of Attorney to plan ahead for the day when they may not be able to take care of things themselves. By doing the General Power of Attorney, they designate someone who can do these things for them.
Normal Powers of Attorney terminate if and when the principal becomes incompetent. Yet many people do Powers of Attorney for the sole purpose of designating someone else to act for them if they cannot act for themselves. It is precisely when persons can no longer do for themselves that a Power of Attorney is most valuable. To remedy this inconsistency, the law created a Durable Power of Attorney that remains effective even if a person becomes incompetent. The only thing that distinguishes a Durable Power of Attorney from a regular Power of Attorney is special wording that states that the power survives the principal’s incapacity. Even a Durable Power of Attorney, however, may be terminated under certain circumstances if court proceedings are filed. Most Powers of Attorney done today are durable.
Yes. At the time the Power of Attorney is signed, the principal must be capable of understanding the document. Although a Power of Attorney is still valid if and when a person becomes incompetent, the principal must understand what he or she is signing at the moment of execution. That means a person can be suffering from dementia or Alzheimer’s Disease or be otherwise incompetent sometimes but as long as they have a lucid moment and are competent at the moment they sign the Power of Attorney, it is valid even if they do not remember signing it at a later date. At the time it is signed, the principal must know what the Power of Attorney does, whom they are giving the Power of Attorney to, and what property may be affected by the Power of Attorney.
Any competent person eighteen years of age and older can serve as an agent. Certain financial institutions can also serve. There is no course of education that agent must complete or any test that Agent must pass. Because a Power of Attorney is such a potentially powerful document, agents should be chosen for reliability and trustworthiness. In the wrong hands, a Power of Attorney can be a license to steal. It can be a big responsibility to serve as an agent.
Medicare is health insurance and covers medical services such as physician appointments, therapy, blood tests, x rays, medical procedures and hospitalization. Medicare will sometime pay for rehabilitation in a long-term care facility for a period of 20 to 100 days, but not longer. In long-term care, Medicaid covers the cost of ongoing support services for daily functioning, such as room and board in a nursing home.
Medicaid is a federal program that is overseen by the Center for Medicare and Medicaid Services (CMS). In Pennsylvania, Medicaid is called Medical Assistance and is administered by the Department of Human Services (DHS).
In Pennsylvania, Medicaid funds are not available to pay for assisted living or personal care.
For Medicaid to pay for care in a nursing home, an individual recipient must be determined to need a nursing home level of care by a physician and the local Office of Aging. An individual whose income is not greater than three times the poverty level may keep up to $8,000 of total resources, but may otherwise keep only $2,400. The cash value of life insurance counts as a resource, but one car and a residential home does not count as a resource.
Empowering Clients with Holistic Planning at
Keystone Elder Law
At Keystone Elder Law, we believe that the physical, social, legal, and financial considerations of our clients all intertwine. We utilize an interdisciplinary approach to evaluate each area, which allows for the creation of a plan that addresses the concerns of the individual as a whole as well as the family. To this end, our model of practice includes a Care Coordinator (usually a nurse or social worker), whose expertise complements our team of attorneys.
When the road of life is smooth, decisions about legal and financial matters are easy to push aside for “a rainy day.” Planning ahead, however, will allow for more options as you view the map of where you’ve been and where you want to go. Don’t let a crisis limit your choices or derail your plans.(717) 697-3223