Fall in Bucks County!
The Commission on Long Term Care’s Final Report issued in Sept 2013 revealed some interesting and rather worrisome facts:
1. More than 12 million Americans rely on long term care services and supports (LTSS), either in their home, community or in an institution;
2. Most of that care comes from family, friends and dedicated caregivers;
3. Most individuals have insufficient resources to pay for care;
4. Two thirds of the costs are paid for by federal and state government through the Medicaid program (almost 210 billion dollars in 2011);
5. THE ESTIMATED VALUE OF FAMILY CAREGIVING IS AT LEAST TWICE THAT OF ALL THE GOVERNMENT PROGRAMS (450 billion dollars in 2011)!
6. By 2050 the number of Americans needing long term care will DOUBLE!
The LTSS system, as it now exists, is fragmented and confusing and is only understood by experts. Families attempting to navigate the system are frustrated by confusing rules, terms, and requirements. Much is needed to correct this problem and it is encouraging that the Committee has taken a step in bringing the issues to light and in setting forth some goals going forward. We have suggested similar solutions in previous articles in this Journal. We discussed the need for good Powers of Attorney and a need to plan early to avoid surprises later on.
Here are some more important tips:
1. Find a competent attorney or advisor who works daily in the long-term care system and do it now rather than later. Why? Besides being a recommendation of the Committee, it is better start early because it is difficult to make informed choices in an emergency. Interview attorneys and find a good connection. Attorneys, like every other profession, have different styles and you may have to search a bit to find a suitable fit. Don’t assume your regular estate planner knows what to do. Don’t take advice from someone who is trying to sell you a product. Learn about the system and your choices. Don’t assume that one size fits all. Don’t buy anything unless you understand how it impacts you in the event of illness. We offer something called an “early bird special” that is essentially estate planning with an added focus on long term care. Please note that eight out of ten Pennsylvanians need long term care services before they die. It should be a factor in your planning. You should be able to act quickly in time of crisis. Consolidate and simplify and make sure that someone knows what you have.
2. Make sure your agents (Powers of Attorney) have what they need to assist you. Most individuals who come to us have no consistent organization of documents or information. Most don’t consistently track their assets or expenditures. Most do not understand their own Medicare coverage. Most are making gifts without thought of the consequences. Many couples rely on one spouse to handle the finances leaving the other vulnerable. In times of crisis, your agent will have more important things to do than fighting with insurance companies about the wording in a Power of Attorney.
3. As to organization, keep this in mind:
a. Keep your bank statements for the previous five years and keep copies of checks exceeding $500. Keep everything organized. Throw away your envelopes. Use folders and mark them by month and year. If possible, scan them into PDF files but save your originals.
b. Keep copies of your tax returns for the previous five years.
c. Keep your Social Security Benefit Statements for the current year. If you are computer literate, go to My Social Security Online and sign up. It is easy, and fun, and very helpful.
d. If you are computer literate, keep your passwords somewhere safe and accessible by your agent or spouse in an emergency.
e. Keep your original (signed copy) Powers of Attorney, Will and Living Will SAFE and SECURE. DO NOT give your original Power of Attorney to anyone. If an institution demands an original, have it recorded and then give the institution a certified copy. If the institution will not take a certified copy, see an attorney.
f. If you have a safe deposit box, please keep the key somewhere where your Agent or spouse can find it. Don’t keep assets in a safe deposit box. Cashing a CD and stashing the money doesn’t work. It just adds unnecessary complexity in a crisis. Putting a family member’s name on an account doesn’t make that account safe.
g. No stock certificates! Get a brokerage account. Certificates slow the task of making a timely application for Medical Assistance. It costs you more money.
h. If you have Savings Bonds, please make sure that the ownership of the bonds are up to date. Make sure the bonds are not matured. Bonds are countable resources for Medicaid. They take time for an agent to cash. They are not invisible and do NOT hide money. I know you love them but you cannot afford them if you get sick.
g. Life Insurance, Annuities – For someone entering their 80s these are slow and unwieldy and often end up costing people money. I know that you like the interest rates but if uncooperative insurance companies end up costing you a month of coverage for nursing care, that means $9,000 that you have to pay. That’s a lot of interest!
These are some of the ideas, call us for a FREE CONSULTATION for some more.
About Leonard L. Shober
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