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Having “a talk” with your parents about their long term living situation.

No, we are not talking about the birds and the bees but rather talking about having a conversation with your parents about what their wishes are in regards to their long-term care living situation.  I find in my practice that oftentimes parents will think a lot about where they’re going to live as they age and what type of situation they would prefer to be in.  Unfortunately, many parents do not feel comfortable having the conversation with their children ahead of time for many reasons.  I also find that the opposite is equally true: the kids often wonder what will happen but don’t feel that it’s right to bring it up and don’t want to push mom and dad into having to discuss make decisions about that determination.

I cannot begin to tell you how important it is to discuss these situations early and often.  Both parties are hesitant, but it is better for everybody involved to know what mom and dad think and what their wishes and hopes are for their living situation at the end of the day.  To the extent that mom and dad want to remain home, there are plenty of things that can be done including modifications to the home or purchase of a new home to make that happen.  To the extent that they want to go to an assisted living community and live independently now or to a continuing care retirement community, there are many tours and interviews to take with mom and dad to see where they feel the most comfortable.  The options are plentiful and regardless of what mom and dad are hoping for, it is typically pretty straightforward in finding an option.  

A friend of mine recently told me that she does not want to have the conversation because she is afraid that mom and dad are expecting they will be able to move into her house with her and her family.  My response to her was wouldn’t you rather know that now and have the conversation now with them rather than wait until they need assistance and cause not only them extra stress but you and your family extra stress?  She definitely came around after about a 25-minute conversation explaining that it wasn’t about her and her family but rather about her parents’ wishes.  Just because they wanted to do that doesn’t mean that it would work for her and her family nor does it mean that that is what has to happen, but having the conversation will at least open up the dialogue and allow her to express her concerns and reasons why she doesn’t think that would happen or be able to work and look for another alternative.  Ultimately, she did have the conversation with her family, which is not what they were looking for or expecting, so it was nothing more than a miscommunication.  I urge adult children to have a conversation with their parents about aging and their wishes sooner rather than later. This conversation will avoid lots of heartache and misunderstanding later and allow for plenty of time to plan for the future.

 

If you are interested in learning more about long-term care living, please call our office at 717-845-5390, or click the link here to RSVP to our upcoming workshop to learn more about it.

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With premiums increasing drastically, should I keep my long-term care insurance?

This is a question that I receive on a regular basis in my estate planning and elder law practice. By way of full disclosure, I am not a licensed insurance agent and I am not licensed to be able to sell long-term care insurance or any other insurance product. I am an attorney with approximately 20 years of experience in estate planning and elder law and I happen to be a Certified Elder Law Attorney under the authorization of the Pennsylvania Supreme Court. While I am not the person who will sell the products, I am certainly an individual who has been advising numerous clients over the years and definitely believe in the benefits of a long-term care policy and what they can provide. We have done numerous other logs about long-term care insurance and the benefits of said policies.

When long-term care insurance first gained popularity, many companies completely missed out on the actuarial tables and in predicting what people were going to need. Because of this drastic miscalculation, most of the companies who originally were in the markets for long-term care insurance are no longer there. The few standing companies that are left are trying to figure out ways to make up for the mistakes of the past. Because of that, they are often forced to increase premiums and decrease benefits. Although these companies do have to get permission from the insurance board, it is not a very difficult proposition and in most cases, they will almost always be able to receive permission. The most difficult part is that individuals have been paying into a plan for a number of years and now are learning that they’re going to have to decrease their benefits and even then they may have to increase the premiums that they are paying. It is heart-wrenching to have to provide guidance in these situations and ultimately I always encourage them to bring in their financial professionals to try to make the decisions.  This is as much about the numbers and common sense as it is about the emotion involved. This becomes very easy for us to get disgusted and upset about what is occurring, but it is a cold, harsh reality of the miscalculations that were made in the past.  In some instances increasing premiums and decreasing benefits is the only way some of these companies will survive. 

My best advice to any and all people who are faced with this dilemma is to write out the pros and cons and to try to make the evaluation and determination about numbers and as little as possible about the emotion of the situation. It is too easy to get hung up on the principle of the manner, but the truth is principals are expensive and cause wars. Make the best decision for you and your family based upon the information that you have in front of you. Long-term care is not going away and dropping the policy out of spite is not going to help anyone. 

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Why Improper Planning For A Child With A Disability Can Be Catastrophic.

     Most people go through life and do not often think about planning for the future and what that might look like.  Oftentimes, when people finally get around to planning, they don’t take the necessary time to truly understand the intricacies and the consequences of decisions, but rather want to get something done for the sake of being done.  

     An individual with a disability who is receiving public benefits from the government cannot receive an outright inheritance or they will lose their entitlement to their government benefits.  However, many parents do not completely understand this concept and since they have three children, they’re going to provide for their children equally regardless.  It is imperative if you have a child with a disability or special needs that you seek expert counsel in order to fully understand what the implications of giving money outright to that individual could be now and in the future.  

     It is very easy and straightforward to be able to provide for an individual with a disability by placing money in a special needs trust.  This will allow that individual to continue to receive the money from the parent but also receive the government benefit that they’re currently getting.  This is my example of “having your cake and eating it too.”  While not necessarily overly difficult, it is essential that you work with an estate planning and elder law attorney who does special needs trust on a regular basis.  There are many easy pitfalls that someone can fall into and it is easy to make a mistake in this arena.  If you have a special needs child, please take the time to fully understand how you can protect that individual and the inheritance in the future as well as still providing them any government benefits that they may be entitled to.  

     If you would like to learn more about special needs trust planning, please contact the office at 717-845-5390, to learn more about our workshop for families with individuals with disabilities and how to plan for them. We look forward to seeing you in the future.  

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The Talk

No, we are not talking about the birds and the bees and how to have a conversation with your young son or daughter.  We are talking about the conversation with your parents as they age and what are their wishes in regards to caregiving, long-term care, death, and the planning associated with it.  Most families shy away from these conversations and essentially treat them as faux pas conversations and avoid them at all costs. While avoiding the conversation can make it seem like it’s going away and make it seem like everything is okay inevitably that decision will blow up and will become a very painful situation for those involved.

 

As an estate planning and elder law attorney, I cannot begin to tell you how many families avoided this conversation with their parents and regretted it later.  I have never had a family come back to me after I have suggested that they sit down and have “The Talk” and told me that they regretted it and wished they would’ve waited.  They all say that it was great to get everything out on the table.  

 

Most parents don’t talk about it with their children mainly because they don’t think that their children want to discuss it.  We often hear parents saying that my kid clams up or my kid gets very nervous and just doesn’t want to talk about me or my spouse dying.  Therefore it’s easier just not to have the conversation.  Believe it or not, most parents are open to having the conversation because they are dealing with it on a daily basis and they understand that it’s better to have the conversation or at least to think about it ahead of time.

 

Our advice is to try to start the conversation to understand what your parent’s wishes are for their golden years. Where do they want to live as they age?  Do they have an idea as to how they would like to be treated if they were ever to be in an end-of-life situation?  Where would they like to be buried?  Do they have their financial affairs in order and do they have professionals that they are working with that you could contact if something happened to them?  What is going to happen when if they have to go into a nursing home how can you assist them with their planning?  What happens when they die?

 

These are often great conversation starters.  An estate planning and elder law attorney could also assist you with filling in the details and understanding how to put these answers in legal documents to make them binding in the future.  Don’t underestimate having your parents go to a workshop on estate planning and elder law, it will get them thinking and may also provide the opportunity for the conversation to occur.

 

The holidays and times that families together often end up being the time that people get to discuss these topics and we encourage that you have “The Talk” not only for your parents but for you and your family as well.  As much as your parents will thank you for wanting to have the discussion to figure all of the information out you will also be relieved to know that they have thought a lot about it and have a lot of strong opinions and beliefs and now you know that you can carry out their wishes.  One thing that I have found is that people always want to do what’s best for mom and dad and oftentimes want to do what mom and dad intended.  If you have had the conversation and have documents in place everyone will be on the same page and no one has to speculate or argue about what was intended.

If you are interested in learning more about Medicaid crisis planning, please call our office at 717-845-5390, or click here to RSVP to our upcoming workshops.

 

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Stretching & Protecting Wealth

My estate planning and elder law practice have given me insights into these topics that I never thought possible. I encounter questions on a daily basis in my practice, how can an individual get the most out of retirement and how do you stretch your money and protect your wealth for future generations?

I am an estate planning and elder law attorney who happens to have a Masters in Laws and Taxation as well as being a Certified Elder Law Attorney under authorization of the Pennsylvania Supreme Court. However, more than any class or degrees I have received, representing numerous families over the years and watching their decisions, and in some cases mistakes, has really provided me the most prevalent insight into these questions and their answers. 

 I firmly believe it is very important to work with a financial professional to assist you during your working  or earning years, as well as heading into your retirement years. Although it is possible for some people to “do it alone,” I’m a firm believer in hiring professionals to provide assistance in their area of expertise.

The small fee you will pay will be far worth it in the long run versus what you would save in the short term. Having a financial professional and a plan for retirement, not only how to get there, but also how you will live during retirement — is imperative. Stretching your money during retirement is similar to when you were saving for retirement, being disciplined and having a goal in mind. 

 The one piece that no one ever wants to talk about is the cost of long-term care and how we’re going to pay for it. Although none of us really want to receive long-term care in our home or in a nursing facility, statistically it is a likely possibility that we need to consider.

Long-term care in a nursing home will cost anywhere from 10,000 to $12,000 a month. And in home care, depending on the amount of care that is being received, can cost anywhere from between $17,000 to $20,000 a month. This care is often necessary and needed but if there isn’t a plan in place, it can devastate a family pretty quickly and wipe out all of their savings. 

The most obvious way to pay for long-term care is to simply self-insure, make certain you have enough in assets or investments to cover the cost. I find this to be a very difficult proposition, not only because it is impossible to know ahead of time how much care you are going to need, but also the cost of the care in the future is very unpredictable. I remember at the beginning of my career the cost of a nursing home was around $5,000 a month, and now it is well over $10,000 and in some cases in our area $12,000.

I honestly don’t think it is out of the realm to predict the cost will more than double in a short period of time. But the people who were planning to self-insure, it was certainly a shock to them when they finally got to the point of needing it, and learning that we were closer to $12,000 a month. Although this can be possible for the wealthy individuals, it is not typically possible for the middle class, since they cannot accumulate enough wealth to absorb $12,000 a month in costs. The other thing to remember is that often times one spouse is the caregiver for another spouse, and when the well spouse ends up needing care himself or herself, both spouses end up in the nursing home to the tune of $25,000 a month. It would be very difficult to self-insure this kind of need. 

Another option is long-term care insurance. I am not licensed to sell insurance and have done numerous blogs on the topic of long-term care insurance. I am a big fan in general of the insurance because I love that it could keep an individual in their own home for as long as possible. If you are looking at long-term care insurance policies, I would definitely look at a rider that will pay for in home care.

Pennsylvania has products that are hybrid policies which are life insurance policies, as well as having the riders that provide for in-home care or nursing care. Pennsylvania also participates in the partnership plan, which will allow an individual who has a long-term care policy to exempt an amount of assets equal to the amount of benefit that they have received. I am a big fan of both of these, and if an individual is able to afford it, I believe it is absolutely a good investment. You certainly want to talk to an agent to determine if it is something that is possible for you and your loved one, as well as whether it is financially doable. 

In many cases self-insuring or long term care insurance is not an option, for a myriad of reasons, but often times we are stuck with a situation where a spouse does not have any way to pay for the long-term care, and they are reliant upon the crisis rules. Currently in the state of Pennsylvania, the crisis rules are very favorable, and will allow us to protect 100% of the assets for the spouse in the community. If you are interested in learning more about Medicaid crisis planning, please call our office at 717-845-5390, or click the link here to RSVP to our upcoming workshop to learn more about it. 

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