I do not mean to demean anyone by my title to this posting. I just really did not know how to put this very common scenario more delicately. What do you do when a parent is aging, is needing help and becoming more and more stubborn?
Warning: Be mindful of how you treat your parents ... because your own children are watching!
So, your aging parents are living alone and becoming more "forgetful" by the day. You notice this a little more with each visit. When your siblings come to town for holidays they are dumbstruck with how much your once vibrant loved ones are slipping. What they do not know is that things are really worse than they appear.
The sad reality is much of this stress could have been greatly mitigated by some planning ahead of time.
In fact, according to a recent Hometown Life article titled “Plan ahead to assure secure future for aging parents,” the importance of planning well before elderly parents are physically or mentally unable to care for themselves cannot be stressed enough.
What planning should be done sooner rather than later?
Without exception, proper advance planning should include two essential legal documents.
First, a "general durable power of attorney" giving the adult children legal authority to act on behalf of the parents regarding financial matters. For example, this would include such basics as paying bills, getting into a safety deposit box and even filing required tax returns.
Second, an "advance health directive" authorizing the adult children to make health care decisions if the parent is unable to make his or her own, as well as to have current access to all verbal (e.g., discussions with doctors and nurses) and written (e.g., medical records) information regarding the parent.
A major benefit of getting these essentials completed now is that the parents and children can "work together" as a family. This can eliminate some potential future friction between parents and children, not to mention between the children themselves.
The article also answers questions on a few other relevant and related matters:
What about putting your name on your parents' bank accounts?
Children should not be joint owners on the bank accounts or other assets of their parents. Why? Because this will subject those assets to the liabilities of each child. Think divorces, lawsuits and bankruptcies.
In addition, should Medicaid eligibility be required for the parents down the road, this can jeopardize eligibility. The government is more likely to scrutinize a joint account if the parent applies for Medicaid when transitioning to a skilled nursing facility.
Alternatively, that general durable power of attorney referenced above would allow an adult child to pay bills, etc., without the need for joint bank accounts.
Who pays when an elderly parent, on Medicare, needs rehab in a skilled nursing center?
This is an area of great confusion. Many parents and their Baby Boomer children mistakenly believe Medicare will pay for all nursing home costs. In total, there is a 100-day Medicare benefit. However, this benefit is itself divided. In fact, subject to certain specific requirements, Medicare pays 100 percent of the first 20 days. After that, Medicare will pay 80 percent, and supplemental insurance may pay the other 20 percent of the bill.
In addition, your parent also will need to have a 30-day wellness period outside the hospital or a skilled nursing center for that benefit to reset. For example, if the parent leaves the facility on Day 20, but returns the next week, then they start where they left off at Day 21. Why? Because they did not have a 30-day wellness period between stays.
Should I give any money away if considering entering a skilled nursing home (with Medicaid)?
Medicaid has a five-year look back. Depending on the strictness of your state's interpretation, if you give away money besides Christmas and birthday gifts, and usual church tithing, you will be penalized. This will render you ineligible based on a state formula based on the amount you gave away and the "cost" of a Medicaid bed in your state.
Instead of giving away your money, an elder law attorney can help you with other strategies. Talk to an elder law attorney to make sure you are maximizing your dollars, that you can still give your kids an inheritance and still go into a skilled nursing home on Medicaid.
Better yet, if you are "planning" and not "reacting" at present, look into acquiring long-term care insurance to pay your way. It is now available in a varieties of forms to fit your budget and other estate planning goals. For example, one type of policy allows you to access the cash value if necessary, pays for your long-term care if needed, and pays a death benefit as life insurance to your loved ones otherwise. A win-win-win.
A great strategy is for adult children to pay, or help their parents pay for the long-term care insurance premiums. That way the entire family demonstrates "personal responsibility" in a very tangible way.
After all, your children and grandchildren are watching your example.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri) and to download free tools to help you organize your estate, visit my estate planning website.
Reference: Hometown Life (January 23, 2015) “Plan ahead to assure secure future for aging parents”