Are you ready for the financial implications that come with growing older? As the average American lifespan grows longer the cost of aging becomes more and more prohibitive.

A recent segment on NBC’s The Today Show is takes a close look at long-term care and the price individuals and couples are required to pay as age related illnesses make it more and more difficult for senior citizens to live at home without care.

The show tells the story of “Roberta” and her husband, a couple married for 44 years, who felt there was no choice but to divorce after Roberta’s husband was diagnosed with dementia and the subsequent nursing home bills quickly depleted their assets. After paying no less than $75,000 in care costs, Roberta was advised by her attorney that one of the only ways to conserve her remaining assets for her own support would be to divorce her husband, allowing him to qualify for Medicaid coverage.

With growing numbers of senior citizens being diagnosed with debilitating elderly illnesses, and the cost of nursing care on the rise, more and more couples are finding that without some kind of long term care insurance they simply can’t afford the cost of aging. Medicaid can help, but as the story of Roberta and her husband shows, Medicaid doesn’t come without its own price.

Plan ahead for your own old age by talking to your advisors about Medicaid and your options for long-term care insurance.

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A recent article in the New York Times calls choosing a nursing home for your loved one “one of the hardest [decisions] you will ever make;” and yet it is a decision that almost all of us will have to think about eventually (whether for a grandparent, parent, spouse, or for ourselves.) It is a decision that is made infinitely more difficult if you are forced to make it under pressure.

But choosing a nursing home doesn’t have to be the difficult and unpleasant decision we think it will be, not if you know what to look for, and have the time to really review all your options. Walecia Konrad, author of the article mentioned above, breaks the process down into four steps, and gives valuable advice on how to approach each individual step:

1. Doing the research
2. Visiting the homes
3. Asking the right questions
4. Consulting the experts

The home you eventually choose will be a very personal decision based on a number of factors; location, the preferences of your loved one and your family, health, and of course finances; but having all the right information—and confidence in your ability to evaluate that information—is a key part of making this very personal and very emotional decision.

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Do you need long-term care insurance? You may think you’re too young to think about that quite yet, but what about your parents? If you’re reading this blog it’s likely that your parents are at an age where they soon may need some sort of care, whether that will be in-home care, nursing care, or even need to stay in a nursing facility; if your parents haven’t planned ahead for this eventuality, the burden for their care—either financial or physical or both—may fall on you.

It is for this very reason that a new trend in long-term care insurance seems to be emerging. According to this article by Stacy Schultz, there is an upswing in the purchase of long-term care insurance by the Boomer Generation—except the insurance isn’t for the Boomers themselves, it’s for their parents. “Many of them have just had a relative go through being in a nursing home, and they see the devastation and the stress it causes,” quotes the article. “They’re concerned about mom and dad, and if their parents don’t have a lot of means they want to buy insurance for them.”

If you are considering buying long-term care insurance, either for yourself or your parents, you have a number of options, especially compared to even just a few years ago. Forbes.com recently published an article outlining the improvements in long-term insurance, and what your options are if you’re buying it today.

Take an hour or two this month to talk to your parents (or your kids) and advisors about what the coming years have in store. You may not need long-term care insurance, but you will certainly need a plan, and it’s never a bad idea to know your options, especially when it comes to protecting your future. In the lives of many Boomers, protecting their own future also means protecting their parents’ futures.

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According to the New York Times, “an estimated 38 million Americans provide care to an aging relative.” With numbers like this you would think this would be a frequent topic of conversation within families, but this is rarely the case. Unfortunately, because we tend to avoid the uncomfortable subject of our parents aging, most families are unprepared when mom or dad begins to need help (either physical or financial). But denial can’t stop the inevitable from happening; it only means that you and your siblings will be unprepared when the time does come to care for mom or dad.

What this article in the New York Times stresses is the importance of planning as a family. Parents may think that by keeping their troubles to themselves they’re saving their children stress and heartache, but evidence shows that sons and daughters do end up shouldering part of the burden—financially, physically and emotionally. It stands to reason that if they’re going to share responsibility, these responsible children should have some part in the planning process as well.

The Times article offers some suggestions on how to discuss the issue of aging with your parents and your siblings, and how to prepare for the future together, including how to:

• Open the conversation with your parents and siblings.
• Assess financial conditions and options—including Medicare.
• Learn about care options and their costs.

Don’t wait to have this conversation. As financial gerontologist Rosanne Roge is quoted as saying, “The most important thing is to recognize that it’s likely that elders who live a long time are going to need some help… and you have to pay for it some of the time.” The best time to prepare is now.

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One of the things estate planning attorneys have to deal with in their line of work (most often with elderly clients) is the question of whether or not a client is competent to sign their legal documents. Every principal (or person executing the documents) must be competent, and most attorneys—most people—can make this assessment based on observation, experience and instinct during the course of interaction; but every once in a while a situation arises that is not so clear, or a family member will express concern about the principal’s ability to understand and sign legal documents.

How can you tell if a person is competent? In her book Senior Moments author Jacqueline D. Byrd quotes law professor Peter Margulies’ six factors to determine capacity:

1. Ability to articulate reasoning behind a decision
2. Variability of the client’s state of mind
3. Appreciation of the consequences of a decision
4. Irreversibility of a decision
5. Substantive fairness of a transaction
6. Consistency with lifetime commitments

Byrd goes on to say that for the purposes of determining whether or not a person is competent to sign a will or trust, however, the requirements may be slightly different; more focused on whether or not the principal has a clear knowledge of his or her assets, has a full knowledge of the persons to whom the estate is being left, and is able to reasonably formulate and express a plan for the disposition of the estate.

The unfortunate truth about elderly illness is that competency in a person afflicted with the beginnings of Alzheimer’s or Dementia can often change from day to day or even hour to hour. If there will be any question at all about the competency of the principal the safest thing to do is to have mental examination performed by a doctor, and even perhaps include a video will. Of course the very best way to ensure mental competence is to create your estate plan early, before age or dementia becomes a factor.

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Where you live is a defining aspect of your character throughout your life. Your “hometown” often plays a large part in the formation of your character; as adults we decorate our homes to reflect our interests, hobbies and loves; and the neighborhoods in which we choose to raise our children (city, farm, suburb) tell us a lot about our underlying values and where we feel safe and secure.

The idea that where you live is an important part of who you are doesn’t diminish as you get older—in fact, the longer you’ve lived in a place the more it seems to become a part of who you are, and vice-versa—so it’s no wonder that seniors are as choosy about where they live as any of the rest of us. What follows are some of the options for senior living arrangements. What you and your loved one will choose will depend on health, finances, community support, and of course—your family.

Most seniors would prefer to stay in the home they’ve known and loved. A senior or retirement community may look perfectly nice to a son or daughter; but mom or dad may see the retirement community as a first step toward losing their independence and being forgotten. Many senior citizens can stay in their homes for quite some time so long as they have the support of family and community and perhaps the help of an in-home caregiver.

Another option for housing is a senior or retirement community. These are often independent communities which provide age-segregated living opportunities for seniors who are still active. They usually provide social activities, regular transportation around town, and some personal care or nursing services. These communities can be the perfect solution for a still active senior who is unable to drive anymore, but be very cautious when choosing a community; with no regulation or governing body the non-social services they provide can be suspect.

A nursing home is the most drastic option for senior living, and is usually reserved for chronically ill people who need medical care and regulation in addition to help with the most basic of daily tasks. The decision to use a nursing home is a difficult and emotional one, and should not be put off to the last minute. Not only because nursing homes are expensive, and require as much advance financial planning as possible, but also because finding the right nursing facility for your loved one can take time.

Whatever housing option you are looking for, don’t be afraid to ask for professional help or advice. A Geriatric Care Manager, Elder Care Support Services, or an Estate Planning or Elder Law Attorney can help your family make and implement this tough decision.

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One of the main concerns of anybody who is retired or nearing retirement is how to pay for medical expenses. Research shows that a healthy 65 year old couple can expect to pay somewhere around $305,000 in out of pocket medical expenses during the course of their retirement—and that’s a healthy couple! With expenses like this staring them in the face, it’s no wonder senior citizens are concerned about Medicare.

For those who don’t know, Medicare is a government administered insurance program providing health insurance coverage to people aged 65 and older, or to disabled persons who meet certain qualifications. The Medicare program has many parts which variably cover hospital insurance, medical insurance, and more recently, some prescription drug costs. The Medicare program has proven to be a valuable resource for senior citizens since it was signed into law in 1965, but the program is far from perfect or comprehensive. This, plus recent developments with the health care reform bill have many people asking questions about the future of health care insurance for retirees.

To help answer these growing concerns about health care costs and the Medicare program, Time Magazine has published a special article about how to navigate the Medicare maze. One of the most valuable portions of this article is “When—and How—to Enroll in Medicare”, but the article discusses other important issues such as:

• Medicare’s Part A, B, D and More
• How Medigap Policies Can Help
• When to Buy Long-Term-Care Insurance

Still, the best way to assure that you are getting the right medical coverage for yourself or your spouse during your retirement is to talk to a professional. Federal and State sponsored health insurance programs offer necessary help and coverage—but they can be fraught with confusing procedures and enrollment difficulties. Your estate planning or elder law attorney will be able to help you with the process. Don’t wait until it’s too late.

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In all humor there is a shred of truth, and Mark Twain was a master at using humor to cut straight to the truth of just about any situation. The following quote by Twain seems especially astute: “When I was younger, I could remember anything, whether it had happened or not; but my faculties are decaying now and soon I shall be so I cannot remember any but the things that never happened. It is sad to go to pieces like this but we all have to do it.”

The frightening truth is that as we age we become vulnerable. As the body fails we have to set aside our pride and rely on others for help. But the truly frightening prospect is the possibility that our mind may fail as well. We begin to doubt our memories, and technological advances outstrip our abilities to keep up with them. With this vulnerability comes the opportunity for abuse.

Unfortunately, elder abuse is becoming more and more common. Seniors are a growing class of individuals with money in savings or retirement, and there is no shortage of scam artists looking to take advantage of them financially. The truly sad fact is that most financial elder abuse is committed by someone close to the victim, a person in whom they have placed their trust. In such cases, the abuse may not be pre-meditated, but that in no way makes the abuse acceptable.

The good news is that there are ways to guard against financial abuse. The California Bankers Association has published an excellent list of tips to help prevent elder financial abuse and significantly reduce your chances of becoming a victim, and your estate planning attorney can help you with many of them.

If you think that someone you know may be the victim of elder abuse, either physically or financially, you can help. The National Center on Elder Abuse has a help hotline, as well as a list of warning signs, and community outreach opportunities.

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Do you know who will take care of you when you are too elderly to take care of yourself? According to the statistics your caregiver is likely to be a woman, and most likely to be your daughter or daughter-in-law. What this means is that unless you have a plan for your future long term care, the financial burden of caring for you will fall to her and her family.

“Financial burden” refers not just to the expense of paying for food and medical costs, but to loss of income incurred over years of care-giving. “Women take time away from their careers to care for family members,” writes George I. Connolly, “and… lose an average of $659,130 over a lifetime in reduced salary and retirement benefits.”

Many people think that government programs will pick up what they can’t pay for themselves, but relying on government programs can leave your family footing just as much of the bill as they would without them. You may want to consider other alternatives as well, such as investing in long-term-care insurance. If you aren’t sure about your options, or how to start planning for the future, call our office for help.

If you are a daughter of aging parents, now is the time to talk to your parents about the future. Studies show that you are the one who is likely to shoulder the responsibility of caring for them as they age. Doing so will affect your family, your career, your finances, and even your health.

The subject of aging and elder care is a difficult one, but not one to be left to the last minute. Talk to your family about your wishes and plans for the future, then bring your estate planning attorney into the discussion. Once you have an idea of your wishes, an expert can help you feel better about your options, and put you on the right path for keeping your family healthy, happy, and financially secure in the years to come.

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If you are a Caucasian woman, aged 35 or older, possibly married, definitely working at least part-time—then there is a good chance that you are now or will soon be serving as a caregiver for an aging parent or relative; at least, this is according to the new report released by the National Alliance for Caregiving, AARP, and MetLife.

The entire report, entitled “Caregiving in the U.S., A Focused Look at Those Caring for Someone Aged 50 or Older” is 73 pages long, but you needn’t read the entire thing to get an insider’s peek at the state of caregiving today. And the report isn’t limited to caring for an aging relative; it includes statistics on those caring for special needs children, as well as family members of any age.

Some of the more interesting statistics listed in the report are:

• 40% of Caregivers are aged 50-64.
• 63% of those receiving care are over the age of 75.
• 67% of Caregivers are women.
• 76% of Caregivers are Caucasian.
• 89% are caring for a relative (36% of the time it is the caregiver’s mother.)
• Over half of caregivers are employed while caregiving; and…
• Caregivers provide an average of 19 hours of caregiving per week (in addition to their regular employment.)

It is worthwhile to note that according to this study most of these caregivers are unpaid for the care they give, which makes sense if they are caring for a family member and are doing it voluntarily—but a full 43% said that they felt they did not have a choice to take on the role.

Our office can’t prevent you from one day needing a caregiver (or one day having to serve as a caregiver) but we can help you plan for when that day may come. Thinking and planning ahead can keep you—and your loved ones—from ending up in a situation where you feel you have no choice.

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