Elder Law Update – At Large Edition April 2009
Think You Don’t Need Long Term Care Planning? Think Again!! 1. Alzheimer’s Projections. Recently during a Senate Special Committee on Aging hearing, a couple of prominent politicians noted that there is no single effort that would do more to lower the cost of entitlement than preventing the onset of Alzheimer’s disease. They noted that Alzheimer’s will cost Medicare and Medicaid a projected $19 trillion between the years 2010 and 2050. It was noted that a five year delay of onset would save approximately $8.5 trillion over that same period. It was further noted that the human pain and financial burden of Alzheimer’s is so great and the potential breakthroughs in science are so encouraging, that a Manhattan type project approach to Alzheimer’s is justified. 2. More Coming. A respected report says that 5.3 million people in the U.S. have Alzheimer’s. An estimated 5.3 million Americans have Alzheimer’s and each patient on average costs Medicare three times more than patients without the disease. 3. Kin Using Elders’ Funds in Downturn. Recent studies show that family members are often inappropriately using an elder’s funds in economic down turn. It has been noted recently by some long term care ombudsman that children don’t have the legal authority to make some decisions for parents. Worse yet, some of the decisions that are made by children on behalf of their parents are purely economically motivated. One case was noted where a nursing home resident was blocked from receiving antibiotics because her daughter cited a “do not resuscitate” clause in her mother’s Living Will. The suspicion is that the daughter was trying to hasten her inheritance. Seniors are advised to be cautious because sometimes the power of attorney given to a family member can give an unscrupulous person license to exploit. This is not a reason not to have a power of attorney but rather should signal that caution and counseling are required in providing such power. 4. Impact of Long Term Care. A recent report indicates that nearly two-thirds of U.S. households are at risk of being unable to maintain their standards of living due to long term care costs. 5. Avoid a Crisis…Talk to Mom & Dad. It is recommended that children sit down and have a heart to heart talk with mom and dad as their capabilities for maintaining independence in their household begin to dwindle. Joint accounts are dangerous. Adding a loved one to a bank account can affect Medicaid planning, as well as expose your account to the loved one’s creditors. When a person applies for Medicaid for long term care coverage, the state looks at the applicant’s assets to see if the applicant qualifies for assistance. If your name is on a joint account and you enter a nursing home, the state will assume the assets in the account belong to you unless you can prove that you did not contribute to the account. Furthermore, if you are a joint owner of a bank account and you or the other owner transfers assets out of the account, this can be considered an improper transfer of assets for Medicaid purposes. Another problem with joint accounts is that the account can become vulnerable to the joint account owner’s creditors. Finally, be sure you can trust your joint account holder because he or she will have full access to the account. In our opinion, there are better ways to conduct estate planning and planning for disability. The power of attorney is a better approach and will provide your agent access under power of attorney to your finances in case of your disability. If you are trying to avoid probate, a trust may be better than a joint tenancy account as well. You need to discuss these issues with an elder law attorney. 6. Ways To Pay For Long Term Care. Remember the possibilities of covering the cost of long term care. The most common ways are:
- Paying out of pocket
- Carrying long term care insurance
- Qualifying for Medicaid by obtaining legal guidance and a legal spend down of your assets. Strict compliance with state laws is necessary.
- Lastly, getting a reverse mortgage.