Kansas and Missouri Estate Planning

How Expensive is Long-Term Care?

Long-term care costs are daunting.

No one likes medical bills.

Even with a job and steady income, they are intimidating.

As you age, your need for health care services will likely increase.

That is a cold, hard fact.

According to a recent MarketWatch article titled “This is how much long-term care could cost you, and don’t expect Medicare to help,” most people over age 65 will eventually need assistance with activities of daily living.

These services are considered long-term care costs and include help with eating, bathing, and dressing.

Most men will require these services for about 2.2 years.

Most women will need them for an average of 3.7 years.

How much can these services cost?

The media yearly cost of a private room in a nursing home is more than $100,000.

About one third of seniors will spend some time in one of these facilities.

About 40 percent of seniors will utilize at-home care.

The median yearly cost of a home health aide is more than $50,000.

About 15 percent of those over age 65 will incur long-term care costs exceeding $250,000.

Yikes!

How does one pay such a bill?

Medicare will be of no help.

Private health insurance also does not typically cover custodial care.

Some may be able to take advantage of free care from family members, but those who are single or have been widowed may find this impossible.

How can you prepare for such costly care?

Long-term care insurance.

Long-term care insurance will help you pay for part of your long-term care costs for a defined time period.

Do not wait too long to apply.

Premiums will rise with age.

The average yearly premium for a couple who are both age 55 averages $3,050 in 2019.

If you are healthy, this is a wise option.

If you have chronic conditions, you may be ineligible and should explore other options.

Hybrid long-term care insurance.

Some life insurance policies or annuities can carry long-term care benefits with them.

Any long-term care benefits remaining unused when you die will pass to your heirs as life insurance death benefit proceeds.

You may be able to have a lifetime payment option, but most are paid in five to 10 year installments.

Home equity.

If you move into a nursing home and will not return to your house, you could sell your home to fund your care.

If you have a spouse, a reverse mortgage could be a good idea.

Reverse mortgages allow you to get a loan on your home equity while still living in the house.

When does the loan come due?

You will be required to pay in full when you move, sell the home, or die.

Contingency reserve.

Saving early and often can help with long-term care costs.

If you have successful investments, the income can be used to make payments.

Medicaid spend-down.

If none of these options is possible, you may need to spend down to be eligible for Medicaid.

Medicaid has specific guidelines so it would be wise to work with an experienced elder law attorney.

Long-term care is costly, but early and careful preparation can weaken the bite.

Reference: MarketWatch (July 19, 2019) “This is how much long-term care could cost you, and don’t expect Medicare to help”

How can I Remain at Home Through Retirement?

There is no place like home.

Any good Kansan certainly knows there is no place like home.

Home is special.

It is comfortable, familiar, and calming.

If you want to stay at home throughout your entire retirement, you are not alone.

No one would rather be in a nursing home.

However, according to a recent Washington Post article titled “Aging in place helps you to avoid a retirement community or nursing home,” avoiding placement in a nursing home requires careful planning.

Not all of our homes are designed for accessibility.

If your home is not, you should remodel or retrofit.

What should you consider?

You will want a bedroom on the first floor, wider doorways, grab bars for the shower, and improved lighting.

The design of your upgrades should be accommodate all ages and abilities.

Contractors who are Certified Aging in Place Specialists would be best.

What if you cannot afford to remodel?

Simply installing grab bars, adjusting lighting, or securing rugs to the floor can go a long way.

When it comes to food, you can take advantage of delivery services or meal prep companies, if you cannot make it to the store.

You should also take charge of your health, finances, and estate planning.

Being proactive with your finances, insurance, and legal documentation can help you remain at home for many years to come.

An experienced estate planning or elder law attorney can help you cover all of the bases.

Reference: Washington Post (July 1, 2019) “Aging in place helps you to avoid a retirement community or nursing home”

What are My Options for Funding Future Long-Term Care Costs?

Long-term care costs will not pay for themselves.

Each year you are older.

As you age, so does your body.

And so does your mind.

Any aging body and mind means you will eventually need long-term care.

According to a recent The Detroit News article titled “What to know about aging and long-term care costs,” the cost of long-term care can be steep.

How steep?

The median annual cost of a private room in a nursing home is more than $100,000 per year.

Home health aid for a year averages $50,000.

Of the more than 50 percent of Americans who will require long-term care, nearly 15 percent will require more than $250,000 in costs.

Yikes!

How can this be?

On average men will require 2.2 years of assistance, while women will require 3.7 years.

You can see how these add up.

Can you simply rely on family to provide care?

Perhaps.

It is not a guarantee, and caregiving can prove costly for the caregiver.

Will Medicare cover these costs?

Nope.

Custodial care is not covered under Medicare.

Most Americans have a median of $126,000 in retirement savings.

This will be wiped out quickly by long-term care needs.

If you qualify for Medicaid, you may be leaving your surviving spouse in a dire financial situation.

What other options do you have?

Long-term care insurance.

If you are in fair health, long-term care insurance is a great option.

If you wait until you are older to get this, the premiums will increase.

What you pay and whether you qualify depends on your health.

On average couples at age 55 paid $3,050 on their policies in 2019.

Hybrid long-term care insurance.

What are these hybrids?

Typically they involve a life insurance policy or annuity with a long-term care benefits rider.

You may pay a significant sum of money upon purchase, but it will serve a similar function to long-term care insurance.

Home equity.

Selling your home should not be the first option.

In some cases, it is unavoidable when paying for nursing home care.

What if you want to remain in the home?

A reverse mortgage could be an option.

Contingency reserve.

If you are a wealthy family, you may be able to simply save and set aside money specifically for long-term care costs.

Medicaid.

For those with few assets and negligible or nonexistent retirement savings, Medicaid may be your best or only option.

This will require you to spend down until you are meet financial eligibility requirements.

If your spouse still needs to survive off what you have, there may be a way to make this happen.

It will require forethought and working with an experienced elder law attorney.

Long-term care costs are daunting.

Planning ahead for this expense will bring peace of mind when the time comes for this type of care.

Reference: The Detroit News (June 10, 2019) “What to know about aging and long-term care costs”

Why Should I Be Concerned About Long-Term Care?

Planning for aging is important.

Getting older is a part of life.

Unfortunately, it is a reality many ignore.

According to a recent Think Advisor article titled “Now You Can Add Long-Term Care to Death and Taxes,” few people are planning financially for this reality.

Many Americans are in denial (not to be confused with that famous river in Egypt).

They do not think they will ever need long-term care.

In fact, only 46 percent foresee this as a part of their future.

The reality?

Nearly 70 percent of Americans will require long-term care.

How much does long-term care cost?

Out-of-pocket costs easily run more than $47,000 annually at the very low end.

Most people estimate the costs to be about $25,350.

Some semi-private nursing homes are about $85,000.

Private nursing home care is even more at $97,455.

These are significant numbers.

Unfortunately, about 64 percent have saved nothing for long-term care.

About 67 percent are unable to contribute to the long-term care of a parent.

As you can see, there are a lot of misconceptions about long-term care.

But there are more.

Really?

Yes.

Many do not accurately estimate when they will begin needing long-term care.

Most estimate it to be about age 79.

The reality?

On average people require long-term care starting at age 73.

Most men will need it for 2.2 years.

Most women will need it for 3.7 years.

Remember to consider the cost of care and the quality of care as well as the proximity to loved ones when you are selecting a long-term care facility.

Do not be caught off guard.

Have discussions now with your loved ones about long-term care, then come up with a plan to pay for it.

Reference: Think Advisor (August 6, 2018) “Now You Can Add Long-Term Care to Death and Taxes”

What is the Skinny on "Assisted Living" Facilities?

Assisted living facilities are not nursing homes.

Assisted living facilities.

Perhaps you have heard the term.

Maybe you are confused as to what it means.

According to the recent The San Diego Union-Tribune article titled “The key thing to know about assisted living,” many people are unsure of the differences between assisted living facilities or nursing homes.

What are assisted living facilities?

They are residential homes ranging from fewer than ten beds to more than one hundred beds.

These facilities tend to be less expensive than skilled nursing facilities.

Why?

They provide more basic care for patients than those providing skilled care.

Most assisted living expenses are "private pay" rather than through insurance.

Instead of being regulated by the Departments of Public Health and Health Care Service, assisted living facilities are regulated by the Department of Social Services and Community Care Licensing Division.

This means their record keeping and regulations are not as stringent as those of skilled nursing facilities.

Although there are many great assisted living facilities, they are not all capable of fully caring for the needs of those with complex health issues.

If your loved one has a chronic medical condition, you may be better off looking into a skilled nursing facility.

No matter what you choose, be sure to research any facility before entrusting your loved one to its care.

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), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: San Diego Union-Tribune (May 9, 2018) “The key thing to know about assisted living”

What Are Some Common Nursing Home Concerns?

You should carefully vet nursing homes for yourself or your family members.

You and your loved ones will eventually be unable to care for yourselves.

It is part of aging.

You will need help.

The care giving may be provided by one or more family member.

Nevertheless, at some point you may require professional help.

According to a recent Forbes article titled “How Nursing Homes Can Destroy Families,” you should start early researching facilities.

What should you do?

Ask Questions

A clear chain of command is important.

You should have one person who answers your questions.

The best way to do this? Maintain contact with the highest ranking official possible.

My father always says it rarely costs more to talk to the person in charge.

Practically speaking, you should have a secondary contact should your primary point of contact be unavailable.

Why?

Many businesses—including nursing homes—have high turnover.

This can lead to misinformation.

Make sure your communications are documented.

How do you do this?

Send your communications through email and request responses via reply email.

This way you have a record with time and date fixed.

Check on the care provided

Some facilities provide better care than others.

Check out the rooms.

Are they well maintained?

Does the facility have good record keeping?

Staffing is incredibly important.

If a place is understaffed, then residents could be left neglected.

This could lead to a resident being mentally or physically harmed.

Do not waste any time.

The stress of a nursing home can already cause conflict within families.

An experienced elder law attorney can provide help for you as you navigate the nursing home system.

The National Academy of Elder Law Attorneys has a directory of elder law attorney you may search online.

If you are in the Kansas City area, then you should contact Steve Kuker at Senior Care Consulting and check out his talk show Senior Care Live! on KMBZ 980.

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), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: Forbes (April 28, 2018) “How Nursing Homes Can Destroy Families”

What do I Need to Know About Paying for Long-Term Care?

You should be planning for health care costs.

Health care is not cheap.

You know that.

In fact, you probably have a small idea of this every time you visit the doctor.

Or fulfill a prescription.

Or have a procedure done.

I wish I could say it gets better.

But it does not.

As you age, you will likely require more medical attention, not less.

You may even need assistance with the activities of daily living.

According to a recent Wealth Advisor article titled “Have Clients Planned For Long-Term Care?,” these costs can be staggering.

The median cost alone is $1,500 for health care.

What if you need to be in an assisted living facility?

This will cost $3,750.

Home health care services are more like $3,994 a month.

Need a home health aide?

This will require about $4,099 a month.

Nursing homes are an even greater expense.

A semiprivate room will run about $7,148 with a private room costing $8,121 on average.

Yikes!

This could clean you out of all your savings in short order.

How can you avoid this?

Chances are Medicaid is not an option.

Why?

There is an income limit to qualify.

It is a pretty low threshold and you would need to spend down (not gift) your assets to become eligible.

Do you have other options?

You could purchase a long-term care insurance policy.

What would this do?

It would provide coverage for adult day care, assisted living facilities, home care, hospice, or nursing homes.

Nevertheless, it may not be easy to get this type of policy.

What factors would affect this?

Your health may impact this.

Where you live could provide barriers.

The insurer may have specific limitations.

This decision should be well researched.

You will want to know the benefits and the duration of the policy.

You will also need to know your out-of-pocket costs and tax implications.

If you are healthy and in your late 40s to mid-50s, you should consider getting such a policy before your health takes a downturn.

The cost of coverage will only go up as you age, if your health issues do not disqualify you first.

Do not procrastinate, because hope is not a strategy to protect your retirement security.

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), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: Wealth Advisor (February 16, 2018) “Have Clients Planned For Long-Term Care?”

What is the Skinny on Long-Term Care Insurance?

Long-term care insurance can help you pay for health care needs as you age.

Our minds and bodies wear out as we age.

As one wag put it, birthdays are not for sissies anymore.

This is a part of aging.

Aging is a part of life.

When your body wears down, you will require care.

Having doubts?

Well, a recent U.S. Department of Health and Human Services report would say otherwise.

About 70 percent of folks over age 65 will require some form of long-term care, with some 40 percent need care in a nursing home.

In light of the sobering statistics, a recent nj.com article asks “Should we get long-term care insurance?

According to the article, such care is costly.

How costly?

The national median cost for an assisted living facility comes out to $3,750 per month.

Need a nursing home?

This will be about $8,010 per month.

And the chances are high you will be staying longer than a month.

More than half of nursing home patients stay at least 12 months.

A quarter of residents stay for more than three years.

Yikes!

If you have dementia, you can expect an even higher bill.

Are you expecting Medicare to pay these bills?

Think again.

Coverage for long-term care costs is limited.

Very limited.

Medicaid will only be an option for those with limited financial resources.

What can you do to meet these daunting cash calls?

Long-term care insurance is a great option.

In fact, that is the one Gretchen and I chose for ourselves about nine years ago.

While it can come with a high price tag, if you go on claim it can pay off significantly for assisted living services, home healthcare, or nursing home care as you age.

If you get the insurance while you are not too old and have good health, your payments will be lower.

You may be able to get a hybrid life insurance/long-term care insurance policies if you are afraid of wasting premiums.

With this flavor of insurance policy you will either receive the long-term care payments, the full life insurance benefits, or a combination of both.

If you are not sure what you need, work with an experienced financial advisor.

He or she will be able to help you come up with a plan to fit your needs.

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), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: nj.com (January 12, 2018) “Should we get long-term care insurance?”

How does Federal Law Protect Seniors from Nursing Home Eviction?

Nursing homes are required to meet requirements if evicting a resident.

No one wants to be evicted.

Being displaced is stressful.

Especially if one is being evicted from a nursing home.

According to a recent Skilled Nursing News article titled “What SNFs Should Know About Proper Protocols for Resident Eviction,” this is may be more common than you would imagine.

There are laws regarding skilled nursing facilities and their residents.

As a resident, you can take legal action if being evicted wrongfully.

The federal Nursing Home Reform Act (NHRA) requires any nursing facility accepting Medicare or Medicaid to comply with these laws.

What rights does this law provide?

A resident may only be discharged for one of six reasons.

What are they?

 

1. The resident may require more care than the facility can provide.
2. The resident no longer requires the service of the facility.
3. The resident is a danger to the health of other residents.
4. The resident is a danger to the safety of other residents.
5. The resident has not paid for the care.
6. The skilled nursing facility will no longer be in operation.

If the resident is being discharged for any of these reasons, the facility must follow a specific protocol.

What is this protocol?

The facility must give notice to the patient of his or her discharge.

This notice must include the reason for the discharge, the proposed date of the discharge, the location where the patient will be transferred, the rights of the resident to appeal, and the contact information for any agency that may help them with the appeal or transition.

If the resident needs care beyond what the facility can supply, the facility must give specific documentation for the claim.

Specifically, this would include the needs of the patient, how the facility is unable to provide care, where the resident is being transferred to receive the care needed, and a detailed plan for the transfer.

If the facility attempts to evict you or a loved one because of dementia or the effects of a medication, this is unlawful.

You or your loved one may have a case to successfully appeal.

Contact an experienced elder law attorney to guide you through the process, as this is not a DIY project.

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), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: Skilled Nursing News (December 17, 2017) “What SNFs Should Know About Proper Protocols for Resident Eviction”

What can I Expect to Pay for Long-Term Care?

The cost for care is continuing to increase.

Long-term care is not cheap.

The cost of long-term care insurance is also high.

Will the cost of long-term care insurance be worth the investment?

According to a recent ThinkAdvisor article titled “15 Most Expensive States for Long-Term Care: 2017,” long-term care costs are constantly increasing.

The Genworth Financial study provides a look at how much these costs have increased in the past year.

The results?

Payments for licensed homemakers increased 6.17 percent.

The price of a helper who cooks, runs errands, and cleans grew 4.75 percent.

Even though the cost has increased, the price is still on the lower end of care costs.

You will pay about $21 for homemaker care and $22 for licensed homemaker care.

How much do adult day care options cost?

The price averages $70 per day after an increase of 2.94 percent.

What about assisted living facilities?

The median month rate is $3,750.

This is an increase of 3.36 percent while nursing home costs increased by 5.5 percent for a private room.

Often times, these services are paid by caregivers.

In fact, caregivers spend $10,000 on average for these expenses.

When caregivers do this, it affects various aspect of their lives.

They will have to change their quality of living.

They often pull from their own retirement savings or limit the amount they allocate to saving for retirement.

Income can also be affected as providing care has career implications.

Finances aside, there is an emotional toll.

It can have a negative impact on family relationships.

Investing in long-term care insurance could help protect both finances and relationships.

This is priceless.

In fact, I practice what I preach, at least in this regard.

Gretchen and I acquired our long-term care insurance nine years ago.

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), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: ThinkAdvisor (October 2, 2017) “15 Most Expensive States for Long-Term Care: 2017”