Helpful Steps When Arranging for Elder Care
Aging is a part of life, but that doesn’t mean it’s easy or seamless. Caring for elderly parents as you simultaneously raise your own family is especially challenging. The best gift parents can give their children is to plan for their future and have that plan in place before a major crisis occurs.
According to Joshua McMahan, a Kokomo attorney with Butcher, Ball, Lowry, McMahan & McClelland, who specializes in elder law, proper planning is crucial because of the expense of long-term care and the limited options of paying for it.
“It’s about anticipating things because when you know what the options and outcomes are, it helps financially and psychologically if you’ve got a good plan in place,” McMahan says.
When making plans for aging parents, the conversation always turns to finances. Therefore, taking a serious look at your finances as it relates to the possibility of long-term care is key.
“It’s a situation where we can think, ‘This is that I’d like to see happen,’ but when it comes down to financing the stay, that has to be looked at very objectively,” McMahan says. “It’s not a time for being idealistic. It’s a time to be realistic.”
One of the main things to consider from an advanced directive point of view is have a power of attorney in place who can tackle various issues that arise. Though you can have one appointed at any age, it’s wise to do so by age 65. This is key as they can have conversations relating to health care or business if your spouse is unable to serve in that capacity. Health care is expensive, and those are business decisions so it all blends together. If you don’t have a power of attorney appointed for you and you end up needing it, you’re then looking at getting guardianship, and that causes delays and court involvement.
“These are not fun conversations to have as people don’t like to think that they may one day have Alzheimer’s or dementia or whatever, but avoiding the conversation isn’t a good idea,” McMahan says.
Living wills are a good guide for future decision making.
“The more you have your thoughts laid out for the people who will be helping you, the better,” McMahan says. A living will is a great way to give that kind of instruction to people in health care decisions.
“When someone is in critical condition and death is imminent, those can be emotionally charged circumstances with multiple family members in consultation with doctors,” McMahan says. “A living will can help avoid arguments when you spell out your wishes regarding medical treatment.”
Having your last will and testament or trust spells out how you want your estate to be divided, which clarifies your wishes. If you don’t have those things in place, the state provides it for you through the laws of intestacy. (Intestacy is the condition of the estate of a person who dies without having enforced a valid will or other binding declaration.)
Bottom line — if you want your wishes to be implemented, you have to be sure they are expressed in writing in advance.
McMahan says the most common concern he hears from clients is their worry over how to finance a nursing home stay.
“Everyone has a war story about their aunt, cousin or friend who went into a nursing home and lost everything because they say the state took the house,” says McMahan, who explains that is not technically how it works. It is true, however, that a person has to spend down everything until they get under the financial threshold of the state for Medicaid to pick up the care.
“That scares a lot of people because even if they have done pretty well and have sizable assets, when we’re talking about $7,000, $9,000, or $12,000 a month private pay, most people can’t survive that very long without depleting everything they have,” says McMahan, who notes that when he talks to his clients about their wills, trusts and general estate planning questions, it’s all blended in with this conversation as they wonder, “How do I pay if Mom needs to go into a nursing home?”
When assessing someone’s eligibility for Medicaid, McMahan asks people to list their current assets, income and insurance.
“If a client starts thinking, ‘Mom is going downhill or Dad is struggling with his dementia and it looks like [Medicaid] is on the horizon,’ start to get a list of all that’s out there,” McMahan says.
When it comes to planning, people often make two common missteps, starting with waiting too long.
“When we have the benefit of time to do pre-need planning for Medicaid, then we have a lot of options,” McMahan says. “But if you come to us and say, ‘Dad’s going into the nursing home tomorrow or he’s been in a nursing home and Medicare is going to stop paying in X number of days, then we are in crisis mode and we have to scramble to get him eligible.”
The other mistake is eliciting advice from friends as opposed to a professional. Your neighbor may advise you to get the house out of your dad’s name, for example, but that can have a consequence if it’s not done correctly, including unforgiving Medicaid Transfer Penalties.
“If you consult with an elder care attorney or someone who really understands Medicaid, we can still make those things happen,” McMahan says. “They just have to be timed correctly and done properly.”
The bottom line is that planning helps alleviate fear of the unknown, which is the common denominator across elder care issues.
“Once you’ve started taking the steps of proactively addressing some of these things, you begin to understand the landscape of what you’re talking about,” McMahan says. “You’re not trying to hurry up and learn this stuff. Instead, you’ve got a working base knowledge to have the conversations and these preparations help you with that, which, by default, makes things smoother and less stressful.”
Joshua P. McMahan is an attorney with Butcher, Ball, Lowry, McMahan & McClelland. Offices are located at 201 North Buckeye Street in Kokomo. For more information, call 765-457-1126.