Securing long-term care for a loved one can be a complicated process that involves legal, financial, and social factors in addition to physical care needs. Below are some easy-to-make mistakes that can have undesirable consequences for the individual receiving care as well as for the family.
- Powers-of-attorney: It’s a big mistake if an individual fails to execute these documents. Especially for legal and financial matters, huge headaches can result if a person becomes incapable of handling their own affairs, and they have accounts, property, and other assets only in their own name. It can also be a mistake to cut corners with a do-it-yourself legal document. Having a legal piece of paper might be better than nothing, but using it inappropriately could create a new set of problems.
- Have you been designated as a Financial Power-of-Attorney Agent? When signing anything on behalf of another individual, always sign your own name, followed by “P.O.A.” If you sign your own name as a responsible party to a contract without the “P.O.A.,” you could be on the hook financially.
- Is a loved one receiving VA benefits? For certain benefits, an individual’s assets are taken into consideration during the application process. An application can take months, sometimes even a year or more to receive approval. If the veteran or surviving spouse owns a house at the time of application, and the family needs to sell the house while the VA applicant is living, the proceeds of the sale will cause the VA benefit to stop. Consult an attorney before planning to sell a home or property.
- Does your loved one need rehabilitation after a hospitalization? Realize that being admitted for a minimum of three nights in a hospital is key to getting Medicare to pay for rehab for a minimum of 20 and a maximum of 100 days. Carefully consider their potential ability to safely return home after the rehabilitation. Some short-term rehab facilities are not set up to accept Medical Assistance when Medicare stops, and this can be a real problem if your loved one cannot be safely discharged to return home. The adjustment to staying in a nursing home long-term will be much easier if the individual is able to stay in the same facility after the rehabilitation period has ended. Keep in mind the possibility of whether or not Medical Assistance could be available to pay for long-term care services when choosing a rehab facility.
- The nursing home application process: A standard question on nursing home applications is whether or not the potential resident has given gifts in the five years prior to the admission to the facility. Many applicants may check “No” without an understanding of what constitutes a gift. This answer can create financial complications if the individual eventually runs out of funds and applies for Medical Assistance. A gift is any asset that is given away or transferred for less than fair market value. Specifically, a single gift or sum of multiple gifts that totals more than $500 in a single month is important to disclose. Examples of gifts are checks written at the holidays, college tuition paid on behalf of a grandchild, household expenses paid for a residence that isn’t their own (including if a parent is living in a child’s home so that the child can provide care), and a car given away or sold for less than market value. When these gifts are disclosed during the application process, planning can be done to avoid financial liability later on.
- Personal Liability: IF a nursing home tells you, the adult child, that they will do the Medical Assistance application for you and that you don’t need a lawyer’s help, ask if they will promise not to make a claim against you personally if your parent’s application is denied.
These are only a few situations in which uninformed families can find themselves in trouble, even when they have the best of intentions. When in doubt, consult an attorney who has knowledge of all of the issues that seniors may face, since rules can vary or overlap in a variety of ways, and the future is always uncertain.
Dave Nesbit, Attorney and Karen Kaslow, Care Coordinator