When do you need an Elder Law Attorney?
What is an elder law attorney? An elder law attorney is an attorney that brings together multiple disciplines in the legal field and non-legal fields to deliver senior citizen–taxpayers an array of services that are designed to help them transition from their maturing years to their senior years so that care, security and the ability to age with dignity are maximized — but the cost of care is minimized. Multiple Disciplines Let’s break down that first paragraph into a little bit more detail. The multiple disciplines that an elder law attorney relies on deal with trust and estate law; the laws dealing with guardianship and disability; federal and state taxation law; and the law relating to public benefits both at the state and federal levels. As you can see, this is not the type of law that is practiced directly out of law school. It is necessary for an elder law attorney to master multiple disciplines before he or she can deliver this continuum of services to a client. It takes years to develop the skills. 3 Phases of Life With regard to transitioning from maturing years to senior years, it must be understood that clients’ estate planning needs must deal with the three phases of life. The three phases — which can be further examined with The GAP Illustration Tool© shown on our website — are as follows: Maturing Years, Senior Years, Post-Death Years. In elder law, we are trying to seamlessly provide solutions during your maturing that will carry over into our senior years to accomplish maximum of service delivery and minimization of cost. Finally, in the post-death years, estate, trust and probate administration must be dealt with. Minimization of cost of care With regard to the maximization of services, the elder law attorney needs to understand what tools are available to help clients transition from maturing years to senior years and create strategies and tools that will allow that transitioning to take effect at the minimum possible cost. Factors minimizing cost include the procurement of long-term care insurance through qualified long-term care insurance sales representatives; reliance on self-funding to some extent; and reliance on Medicare, Medicaid, VA benefits or federal tax benefits. One who can master the handling of all of the above disciplines seamlessly can consider himself or herself an elder law attorney. When do you need of an elder law attorney? In order to answer this question, it is necessary to understand this basic fact: During our senior years, the cost of long-term care delivered in intermediate and skilled care facilities can range from $6,500 to $10,000 per month. How do I pay for the cost of care? It is necessary to understand that there are only three ways to pay for the cost of this care: long-term care insurance, out of one’s own pocket, or through the Medicaid program. It also should be noted that the cost of care in independent and assisted living facilities can range from $3,500 to $7,500 per month. Again, this lesser level of care can be paid for in only three ways: long-term care insurance, out of one’s own pocket, or through the Medicaid (and possibly VA benefit programs processes, this option being available only to qualified veterans). Medicaid and VA benefits. Are they available? Since most of our clients don’t have long-term care insurance, that leaves only out-of-pocket expenditures and Medicaid and VA benefits to rely on (with the exception of Medicare, which provides for long-term care during rehabilitation — but only for a maximum of 120 days). With this backdrop in mind, it is useful to remember that both Medicaid and VA benefits are based on need. In other words, there are health, asset and income limitations that must be satisfied before Medicare, Medicaid or VA benefits are allowable. Legal advance planning or not Therefore, before individuals can determine whether it is time for them to apply for needs-based programs such as Medicaid or VA benefits, it is necessary to determine whether these benefits should be applied for with or without legal planning. If there are minimal assets and the health requirements are met, quite often not much legal planning needs to be done to qualify for these care programs. Keep in mind, it is always useful to have advance directives and a will or trust that deals with the disposition of any assets or possessions left after death. Minimal legal planning may be involved. However, if there are any significant assets that exist while seeking to qualify for these needs-based programs, it is essential that there be legal planning before submission of an application for these benefits. Benefits of legal preplanning The type of legal planning that is done prior to application for the benefits can fall into several areas. They can include the creation of an asset protection plan; the revision of traditional estate planning documents to senior estate planning documents; the creation of powers of attorney that have built in to them the authorization for further long-term care planning for senior citizen-taxpayers in the event they are unable to continue planning for themselves; the creation of asset protection tools and strategies; and the implementation of these tools and strategies with subsequent funding of such tools and strategies. Senior estate planning Finally, senior estate planning is completed using documents and legal tools that are quite different from those used in traditional estate planning. It is only with them that applications can be submitted to qualify for any available federal or state governmental benefits. Conclusion So the question of whether you need an elder law attorney or not turns on your understanding of what an elder law attorney does, and then determining whether the attorney you are considering can fulfill all the needs described above. This, of course, is in addition to other needs that space does not permit me to describe in this Elder Law Update. If you want to know what elder law attorneys are continuing to do for their clients and why these clients need them so desperately, please continue to read our column. In future issues, we will describe some of the strategies and benefits that we can create and have created for our senior citizen-taxpayers clients.