Am I Too Young for an Estate Plan or a Long Term Care Plan? Part 4
In this 4th post of 4, I continue to discuss the topic of a catastrophic illness or injury hitting a younger family. We discussed the issues of long term care which may be needed for extended periods of time or for life. Advances in medical science can save lives but a lot of care is often needed. But, as I stated last week, many of these patients may ultimately not survive. So what happens if someone in their 30’s, 40’s or 50’s dies without a will? As I have written about in past blog posts, without a will the intestacy laws determine who inherits. Most people would assume that a surviving spouse will be first in line to receive all the assets, however, that isn’t always the case. If either the decedent (person who died) or the surviving spouse has children from other relationships, then the spouse will inherit a part of the estate but the balance will go to the children. That’s where it can get complicated. If any of the children are minors, then their inheritance may need to be deposited into court until age 18. At that age, although legally an adult, most people do not have the knowledge, experience and wisdom to handle what could
Am I Too Young for an Estate Plan or Long Term Care Plan? (Part 3)
In this 3rd post, I continue to discuss the topics of sudden catastrophic illness or injury at a younger age than one might ordinarily expect - such as someone in their 30’s, 40’s or 50’s. Advances in medical science have saved many people who 20, 30, or 40 years ago probably would have died, however, the road to recovery is a slow one and many of these patients need long term care, unable to live on their own. Younger patients typically were working full or part time supporting families with minor children who are unable to make their own decisions and support themselves because of their age. A parent’s sudden condition which renders them unable to work or live independently, will affect their family as well. As I explained last week, a detailed power of attorney designating someone to make financial decisions is critical to help lessen the crisis. Difficult decisions will need to be made but at least we know the person trusted to make those decisions and guide them accordingly. If the parent has no power of attorney, and lacks the mental capacity - either temporarily or permanently - to sign one, then a guardianship proceeding is the only option. This court intervention will certainly
Am I Too Young for an Estate Plan or Long Term Care Plan? Part 2
In my blog post last week I talked about a scenario we are seeing with increasing frequency. We have had a number of what we call crisis calls relating to a family member who has experienced a sudden onset of injury or illness causing the need for long term care - at a younger age than you would typically think of as needing long term care. This might be because of a stroke, a brain aneurysm or a traumatic brain injury from a car accident. Decisions need to be made concerning health care. Without a health care directive, this immediately becomes problematic - especially if the patient is single. If married, hospitals will often take direction from a spouse - at least temporarily in emergencies, but eventually a legal document authorizing that person to make decisions is needed. In the case of an unmarried patient, there may be multiple family members willing or insisting on making decisions. But without a signed document by the patient, these individuals legally can’t act. Very quickly in a crisis, financial decisions need to be made as well about how to pay for care and what accounts need to be accessed to pay the bills. A power of attorney needs to be in place. If
Am I Too Young for an Estate or Long Term Care Plan? Part 1
Most of the crisis long term care stories I tell here in this blog are of people in their 60’s, 70’s, 80’s and older. They have not planned for the cost of long term care and are then beset with sudden illness or injury. The reality, however, is that there is no age “floor” below which these scenarios do not happen. In recent years, I have seen both professionally and personally numerous long term care crisis cases experienced by people in their 30’s and 40’s. In some ways, these cases are more problematic than for older clients. That’s in part because younger clients have accumulated fewer savings, have families with spouses and young children to support and typically have no documents in place that even begin to lay out a plan for who can step in to help them until they can be independent again. Here is how such a crisis might occur. A 40 something year old has a sudden stroke or brain aneurysm. The after effects are such that the person is in a coma or is debilitated such that he or she cannot perform the activities of daily living (ie. transferring, bathing, dressing, toileting, feeding) without assistance. Recovery is a long slow process. The patient has no
2 Years Private Pay and Then Medicaid – Part 2
In my post last week, I told you about a son who called. His mom had been paying for care for almost 2 years at an assisted living facility (ALF). Thinking he was ready to apply for Medicaid benefits, he called our office for help. His mom, however, still owned real estate worth approximately $1.5M. So why did he think she was ready for Medicaid? He explained to me that 2 years earlier, his brother had been handling his mother’s care and finances and arranged for her move to the ALF. When his brother said that they needed to pay for 2 years and then Mom could qualify for Medicaid, he didn’t question it. He also didn’t look at the admissions agreement that his brother signed on his mom’s behalf. The mistake he made was actually a quite common one. The facility’s policy - as is the case with a majority of ALFs - is that a resident must pay for the cost of care at the private pay rate (much higher than the Medicaid rate) for a minimum of 2 years before the facility will make a Medicaid slot available to her. People wrongly interpret that to mean “if we pay for 2 years then we will get Medicaid. This
2 Years Private Pay and Then Medicaid? Not so fast
In this week’s post I will tell you about a call we received recently, similar to ones we have had many times over the years - although not in some time. Son called stating that Mom was close to completing a 2 year private pay requirement at a local assisted living facility. He said he needed help applying for Medicaid. As I have written about the past few weeks, you never want to wait until you are almost completely spent down to prepare for Medicaid because it leaves no margin for error. I thought that was going to be concern here. But then he told me that his mom still had assets. She had several real estate properties to her name totaling well in excess of $1.5 million. What she didn’t have much more of was liquid assets to pay for the cost of care. So why did he think she could qualify for Medicaid? I’ll tell you more next week.