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Elder Care Can Be Expensive— 5 Steps for Planning
Posted By alz02 On January 6, 2011 @ 2:56 am In ALZ Guide,Long Term Planning,Long Term Planning,PYM | No Comments
By Bernard A. Krooks, Esq.,
Certified Elder Law Attorney
Severe neurological conditions that affect memory leave a large burden for the caregiver. Planning ahead and taking some simple steps now can lessen that burden and improve the care you receive.
If I asked you for a definition of estate planning, you might say that it means making sure that your loved ones receives what you have worked so hard for during your life when you pass away. Some of you might even say it means making sure that the government does not get any more than necessary in taxes from your estate when you die. Nevertheless, focusing on estate planning is about as desirable as going to the dentist for root canal work for many of us. Although it may weigh on our minds, there always seems to be something more important to do like buying a new car or planning a family vacation.
Surprisingly, there is something we like thinking about even less than estate planning and that is planning for the rest of our lives and, in particular, planning for the possibility that we may get sick and no longer be able to take care of ourselves. According to a recent survey by a major insurance company, more than half of all people would rather meet with an advisor to discuss their will and estate planning than discuss planning for long-term care needs. This is true despite the fact that approximately 50% of us over the age of 65 will spend some time in a nursing home before we die. Moreover, more than 50 percent of the people surveyed said that going to a nursing home is worse than becoming bankrupt and even worse than dying.
This is unfortunate since annual long-term care costs nationwide average approximately $75,000; and in some major metropolitan areas, the costs can exceed $150,000 per year. Generally speaking, long-term care is the assistance needed by someone who can no longer independently perform daily activities such as eating, bathing, toileting, transferring, or dressing. This care can be received at home or in an assisted living facility, adult day care center, or a nursing home.
Most people think that these costs affect only the life savings of the seniors receiving the care. However, a significant number of adult children take care of their aging parents, including paying the costs of housing, health care, and incidental expenses. Costs of clothing, home repair, and cell phones can be unnoticed and often come out of the pockets of the adult children. Most children are not abandoning their elderly parents but shouldering the significant time and financial burden required to help them.
This burden is compounded by the fact that most people simply do not have any idea how much long-term care costs, and they believe that Medicare pays this cost, which it does not. However, if we haven’t planned in advance, our life savings can be depleted since Medicare coverage of long-term care is extremely limited. In fact, even if you qualify, Medicare pays for only a couple of months of care if you’re lucky. It will pay only 20 days for “skilled nursing home care,” which occur after a hospital stay. Thereafter, there are significant co-payments. In some special cases, and these are limited, Medicare will provide home care services without a prior hospital stay. In these cases, the person must be home-bound due to their condition, require intermittent (not full-time) skilled nursing care, and the person applies directly through a Medicare Certified Home Health Agency (CHHA).
Many theories abound attempting to explain our apprehension about planning for long-term care and the rest of our lives. While most Americans recognize the importance of planning for their possible long-term care needs, the emotions that surround the thought of losing our independence, as well as the misconceptions we may have about care options, make it uncomfortable for us to confront these issues. Here are 5 steps to help explain the facts about long term care, so that planning for the possibility of needing it becomes much less daunting.
Although the landscape has significantly changed since the enactment of the DRA, planning opportunities remain to protect your assets. The earlier you plan ahead, the more assets that can be protected for you and your family. Do yourself a favor; take the time today to plan for the rest of your life. Although the process might involve a significant amount of time and effort, and force you to confront some difficult issues, you’re worth it. You and your family will be glad you did.
Bernard A. Krooks, JD, CPA, LLM (in taxation), CELA, is president and founding member of the NY Chapter of the National Academy of Elder Law Attorneys and a nationally known and widely quoted expert on elder law. For more information, visit www.littmankrooks.com .
Source: www.ALZinfo.org . Author: Bernard A. Krooks, JD, Preserving Your Memory: The Magazine of Health and Hope ; Spring 2008.
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