Avoid Family Disagreements over Caregiving

June 2, 2022

Taking care of a loved one can be all consuming and taxing to family relationships. According to the “Caregiving in the U.S. 2020” report by AARP and the National Alliance for Caregiving, “about one in five caregivers report experiencing high financial strain as a result of providing care.” This is especially true for those involved in high-intensity caregiving for over 21 hours a week, who often deplete their savings and go into debt. However, there are steps you can take to avoid family disagreements over caregiving.

AARP’s recent article entitled “How Caregivers Can Stop Arguing About Money” says caregiving-related money conflicts are only partially about dollars and cents. Some are predicated on differences in priorities:

Should the family’s finite resources be directed to the care recipient or spread among all family members?
Should the cost of something like a front door ramp for a parent’s house be borne equally by all the adult siblings or solely by the primary caregiver who lives with that parent?
Should a declining parent give all her assets to the adult child committed to caregiving or divide them among her children?

Caregivers, care recipients and other family members may have different answers to such questions and then can get into heated discussions. This can mean hard feelings that can destroy family relationships during the caregiving years and beyond. Here are a few ideas on how to avoid such conflicts:

One strategy to help caregiving families avoid constant financial conflict is to handle little and big questions differently. For the little decisions that need to be made every day, such as which pharmacy to use, family members should defer to the primary caregiver’s judgment. However, for more consequential decisions like selling the family home to help pay for a parent’s nursing home care, all family members should feel their opinions are sought out and respected. It is typically the family members who feel like their voices aren’t heard, who protest the most loudly and cause the fiercest debates.

If caregiving family members still can’t find a way to stop arguing about money, then they should consider meeting with a member of the clergy, a family therapist, or elder mediator. A pro is trained to manage emotions, clarify points and frame acceptable compromises. They can help avoid further disagreements over caregiving that can cause damage to already damaged family relationships. If you would like to learn more about caregiving, or long-term care facilities, please visit our previous posts.

Reference: AARP (Feb. 8, 2022) “How Caregivers Can Stop Arguing About Money”

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Caring for sick Parent can be Challenging

March 24, 2022

Caring for a sick parent can be challenging and emotional time. It’s not uncommon for adult children to have to face a parent’s decline and a stay in hospice at the end of their life. The children are tasked with trying to prepare for his passing. This includes how to handle his financial matters.

Seniors Matter’s recent article entitled “How do I handle my father’s financial matters now that he’s in hospice?” says that because of this major task, it is easy to put financial considerations on the back burner. Nonetheless, it is important to address a few key issues with your family.

If a family member is terminally ill or admitted to hospice – and you are able to do so – it may be a good idea to start by helping to take inventory of your family member’s assets and liabilities. A clear idea of where their assets are and what they have is a great starting point to help you prepare and be in a better position to manage the estate.

An inventory may include any and all of the following:

Real estate
Bank accounts
Cars, boats and other vehicles
Stocks and bonds
Life insurance
Retirement plans (such as a 401(k), a traditional IRA, a Roth IRA and a SEP IRA);
Wages and other income
Business interests
Intellectual property; and
Any debts, liabilities and judgments.

Next, find out what, if any, estate planning documents may be in place. This includes a will, powers of attorney, trusts, a healthcare directive and a living will. You will need to find copies.

Caring for a sick parent while also managing their financial affairs can be challenging, but it can make the aftermath easier and less stressful for you and your family. If you are interested in reading more about elder care issues, please visit our previous posts.

Reference: Seniors Matter (Feb. 22, 2022) “How do I handle my father’s financial matters now that he’s in hospice?”

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Advance Care Planning a Benefit to Seniors

March 23, 2022

Advance care planning (ACP) is an ongoing discussion that involves shared decision-making to clarify and document an individual’s wishes, preferences and goals regarding their medical care. This is extremely important to making certain that they get the medical care they want, if they become incapacitated and unable to make their own decisions. Advance care planning is a major benefit to seniors. Despite the importance of ACP, most Americans don’t have their medical wishes documented, according to Medical Life Sciences News’ recent article entitled “Comprehensive approach may promote Advance Care Planning for elderly adults.”

In the pandemic, too many families exhausted themselves attempting to address this issue, agonizing over what their loved one might have chosen for their care if they had been given the chance.

Dr. Angelo Volandes, MD, MPH, physician and researcher, Division of General Internal Medicine at Massachusetts General Hospital, and colleagues started the Advance Care Planning: Communicating with Outpatients for Vital Informed Decisions (ACP-COVID) pragmatic trial. This experiment was designed to see if ACP participation during the pandemic would increase following implementation of video decision aids and clinician communication skills training. They also looked at how these interventions would affect ACP documentation among patients from ethnic and racial minority groups, specifically African Americans and Hispanics.

The trial included a large, diverse patient population aged 65+ from 22 outpatient clinics at Northwell Health, the largest healthcare system in New York State. ACP documentation from three six-month time periods was compared:

Pre-COVID-19
The first wave of COVID-19; and
An intervention period.

The findings showed that ACP documentation was significantly greater among all groups during the intervention period, with African American and Hispanic patients showing the most significant increases.

“The stark disparity in COVID-related outcomes for African American and Hispanic patients highlights a reality already known by many: our healthcare system routinely fails to meet the needs of minority patients. No one intervention or initiative is going to correct all those failings though advance care planning, through engaging and empowering patients, is one of the most effective, immediate ways to address disparities in care,” adds Volandes, who is also an Associate Professor of Medicine at Harvard Medical School.

“Fundamentally, advance care planning aims to empower patients. The results of our study demonstrate the importance of meeting patients where they are,” adds Volandes. “Whether that means providing information in their native language or sharing educational material via text rather than a patient portal, if advance care planning is to be about the patient and we need to find ways to ensure that they feel they have the knowledge and ability to make decisions alongside their clinicians when they deem the time is right. COVID-19 has made ACP more important than ever, and especially in communities that have been hardest hit by the pandemic.” The bottom line is that advance care planning can be a huge benefit to seniors and their caregivers. Work closely with an elder law attorney to begin the planning process. If you would like to learn more about long-term care and nursing home planning, please visit our previous posts.

Reference: Medical Life Sciences News (Feb. 28, 2022) “Comprehensive approach may promote Advance Care Planning for elderly adults”

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Medicaid Annuity might be an Option

March 7, 2022

What happens when one spouse needs nursing home care? Medicare typically does not cover long-term care. The current median monthly cost of a private room at a nursing home is about $8,000, according to the recent article “A ‘Medicaid annuity’ may be a useful option when your spouse needs nursing home care” from CNBC. For people with limited assets and income, Medicaid will pay. However, what about families who have some assets but are not wealthy enough to be able to pay for their care without leaving the well spouse impoverished? It is a common situation, which requires advance planning. A Medicaid annuity might be an option for your family to consider.

For some families, spending down assets by paying off debt or making purchases to qualify is one way. For others, buying a Medicaid Compliant Immediate Annuity is another. This allows the couple to convert countable assets for Medicaid purposes into an income stream for the well spouse.

Medicaid Compliant Annuities are complex financial instruments and are not for everyone. They are often used in a crisis situation, when there are no other options.

Medicaid has a five-year look-back period in most states. The program reviews all assets and transactions from the prior five years to make sure assets were not transferred out of ownership solely so the person can qualify for Medicaid.

All assets are counted, whether they are owned by the ill spouse or the well spouse. The limits on assets, which include cash, investments and bank accounts, among others, vary slightly by state. However, they can be as low as $2,000. An experienced elder law attorney helps to navigate this process.

For a married couple, in some states, the healthy spouse may have up to $137,400 in total assets. Anything above that is considered available to use for long-term care. Some states have limits on income, while other states do not count the healthy spouse’s income.

If a couple has $100,000 above the state’s asset cap, they can purchase an annuity payable to the well spouse, based on their own life expectancy. For the annuity to be Medicaid compliant, it must meet several requirements. The state has to be named the remainder beneficiary for at least the amount Medicaid paid for the sick spouse’s nursing home care. The annuity must be an immediate annuity, meaning the income stream begins immediately, and it must be irrevocable.

Medicaid programs are run by the state, so each state has its own rules, asset limits, etc. A detailed conversation with a local elder law attorney with experience with Medicaid will be helpful in deciding of a Medicaid annuity might be an option for you. There are some states that do not allow the use of annuities for Medicaid planning. If you would like to learn more about Medicaid planning, please visit our previous posts.

Reference: CNBC (Jan. 26, 2022) “A ‘Medicaid annuity’ may be a useful option when your spouse needs nursing home care”

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Debt doesn’t Disappear when Someone Dies

March 4, 2022

There are two common myths about what happens when parents die in debt, says a recent article “How your parents’ debt could outlive them” from the Greenfield Reporter. One is the adult child will be liable for the debt. The second is that the adult child won’t. Debt doesn’t disappear when someone dies.

If your parents have significant debts and you are concerned about what the future may bring, talk with an estate planning attorney for guidance. Here’s some of what you need to know.

Creditors file claims against the estate, and in most instances, those debts must be paid before assets are distributed to heirs. Surprisingly to heirs, creditors are allowed to contact relatives about the debts, even if those family members don’t have any legal obligation to pay the debts. Collection agencies in many states are required to affirmatively state that the family members are not obligated to pay the debt, but they may not always comply.

Some family members feel they need to dig into their own pockets and pay the debt. Speak with an estate planning lawyer before taking this action, because the estate may not have any obligation to reimburse you.

For the most part, family members don’t have to use their own money to pay a loved one’s debts, unless they co-signed a loan, are a joint-account holder or agreed to be held responsible for the debt. Other reasons someone may be obligated include living in a state requiring surviving spouses to pay medical bills or other outstanding debts. If you live in a community property state, a spouse may be liable for a spouse’s debts.

Executors are required to distribute money to creditors first. Therefore, if you distributed all the assets and then planned on “getting around” to paying creditors and ran out of funds, you could be sued for the outstanding debts.

More than half of the states still have “filial responsibility” laws to require adult children to pay parents’ bills. These are old laws left over from when America had debtors’ prisons. They are rarely enforced, but there was a case in 2012 when a nursing home used Pennsylvania’s law and successfully sued a son for his mother’s $93,0000 nursing home bill. An estate planning attorney practicing in the state of your parents’ residence is your best source of the state’s law and enforcement.

If a person dies with more debts than assets, their estate is considered insolvent. The state’s law determines the order of bill payment. Legal and estate administration fees are paid first, followed by funeral and burial expenses. If there are dependent children or spouses, there may be a temporary living allowance left for them. Secured debt, like a home mortgage or car loan, must be repaid or refinanced. Otherwise, the lender may reclaim the property. Federal taxes and any federal debts get top priority for repayment, followed by any debts owed to state taxes.

If the person was receiving Medicaid for nursing home care, the state may file a claim against the estate or file a lien against the home. These laws and procedures all vary from state to state, so you’ll need to talk with an elder law attorney.

Many creditors won’t bother filing a claim against an insolvent estate, but they may go after family members. Debt collection agencies are legally permitted to contact a surviving spouse or executor, or to contact relatives to ask how to reach the spouse or executor.

Debt doesn’t disappear when someone dies. Planning in advance is the best route. However, if parents are resistant to talking about money, or incapacitated, speak with an estate planning attorney to learn how to protect your parents and yourself. If you would like to learn more about managing debt and property after a loved one passes, please visit our previous posts.

Reference: Greenfield Reporter (Feb. 3, 2022) “How your parents’ debt could outlive them”

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Naming Power of Attorney is extremely important

March 3, 2022

Naming a person to serve as your Power of Attorney is an extremely important part of your estate plan, although it is often treated like an afterthought once the will and trust documents are completed. Naming a POA needs to be given the same serious consideration as creating a will, as discussed in this recent article “Avoid powers of attorney mistakes” from Medical Economics.

Choosing the wrong person to act on your behalf as your Power of Attorney (POA) could lead to a host of unintended consequences, leading to financial disaster. If the same person has been named your POA for healthcare, you and your family could be looking at a double-disaster. What’s more, if the same person is also a beneficiary, the potential for conflict and self-dealing gets even worse.

The Power of Attorney is a fiduciary, meaning they are required to put your interests and the interest of the estate ahead of their own. To select a POA to manage your financial life, it should be someone who you trust will always put your interests first, is good at managing money and has a track record of being responsible. Spouses are typically chosen for POAs, but if your spouse is poor at money management, or if your marriage is new or on shaky ground, it may be better to consider an alternate person.

If the wrong person is named a POA, a self-dealing agent could change beneficiaries, redirect portfolio income to themselves, or completely undo your investment portfolio.

The person you name as a healthcare POA could protect the quality of your life and ensure that your remaining years are spent with good care and in comfort. However, the opposite could also occur. Your healthcare POA is responsible for arranging for your healthcare. If the healthcare POA is a beneficiary, could they hasten your demise by choosing a substandard nursing facility or failing to take you to medical appointments to get their inheritance? It has happened.

Most POAs, both healthcare and financial, are not evil characters like we see in the movies, but often incompetence alone can lead to a negative outcome.

How can you protect yourself? First, know what you are empowering your POAs to do. A boilerplate POA limits your ability to make decisions about who may do what tasks on your behalf. Work with your estate planning attorney to create a POA for your needs. Do you want one person to manage your day-to-day personal finances, while another is in charge of your investment portfolio? Perhaps you want a third person to be in charge of selling your home and distributing your personal possessions, if you have to move into a nursing home.

If someone, a family member, or a spouse, simply presents you with POA documents and demands you sign them, be suspicious. Your POA should be created by you and your estate planning attorney to achieve your wishes for care in case of incapacity.

Different grown children might do better with different tasks. If your trusted, beloved daughter is a nurse, she may be in a better position to manage your healthcare than another sibling. If you have two adult children who work together well and are respected and trusted, you might want to make them co-agents to take care of you.

Naming a Power of Attorney is an extremely important part of your estate plan. Your estate planning attorney has seen all kinds of family situations concerning POAs for finances and healthcare. Ask their advice and don’t hesitate to share your concerns. They will be able to help you come up with a solution to protect you, your estate and your family. If you would like to read more about how powers of attorney work, please visit our previous posts.

Reference: Medical Economics (Feb. 3, 2022) “Avoid powers of attorney mistakes”

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Preventing Long-Term Care Abuse

January 26, 2022

Elder financial abuse is always upsetting, but it’s even worse when a parent is in a long-term care facility and adult children aren’t there to prevent it or stop it. This is especially true during the pandemic, when restrictions meant to keep residents safe from COVID make them more vulnerable to scammers. Preventing long-term care abuse should be top of mind for adult children.

The federal Consumer Financial Protection Bureau recently released a guide to prevent this very same problem, as reported in the article “Preventing Elder Financial Abuse When Your Parent Is In Long-Term Care” from next avenue.

The goal is to help professionals who work with the facilities to recognize red flags, develop policies and protocols and use technology to prevent residents from becoming victims. There’s also a lot of good information in the guide for the children of residents.

One reason elder financial abuse occurs so easily in long-term care facilities is because members of care teams can easily get access to financial records as well as medical records. Putting protections in place before financial abuse happens is the best strategy.

Banking and credit card accounts should be monitored regularly, and fraud alerts should be set up to be sent to the individual and a designated, trusted contact. An outside professional may also be hired to watch over the person’s finances.

Experts recommend listening to their loved ones during visits, online or in person. When a senior complains about money or personal belongings going missing, don’t assume these are part of cognitive issues. Take steps to investigate and document findings.

If an aging parent mentions a strange phone call or an unusual request by a staff member, immediately check their accounts, even if they insist no personal information was shared. Scammers are very good at what they do and can easily convince a victim nothing wrong has occurred. Even if something didn’t occur this time, a single phone call or conversation may be a warning of the parent being on someone’s radar as a possible victim.

Pay attention if small amounts of cash are missing from accounts. Scammers typically begin small, testing the waters to see if the person, their family, or the financial institution is paying attention. Banks cannot discuss your parent’s finances with their investment advisor, due to privacy rules, so the designated family member needs to be in touch with any institutions handling their money.

One of the most common ways of preventing long-term care abuse is a durable Power of Attorney. If no family member has been given Power of Attorney over financial accounts, this is a must-do, as long as the parent has legal capacity to grant this power. The POA gives the person the legal ability to manage financial accounts. If the person is incapacitated, it may be necessary for the child to be named guardian. An estate planning attorney will be able to discuss the situation and recommend the best way forward for the individual and their family. If you would like to learn more about elder financial abuse, or long-term care abuse, please visit our previous posts.

Reference: next avenue (Dec. 17, 2021) “Preventing Elder Financial Abuse When Your Parent Is In Long-Term Care”

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Restructure Assets to Qualify for Medicaid

December 29, 2021

Some people believe that Medicaid is only for poor and low-income seniors. However, with proper and thoughtful estate planning and the help of an attorney who specializes in Medicaid planning, all but the very wealthiest people can often qualify for program benefits. There are ways to restructure assets to qualify for Medicaid.

Kiplinger’s recent article entitled “How to Qualify for Medicaid” says that unlike Medicare, Medicaid isn’t a federally run program. Operating within broad federal guidelines, each state determines its own Medicaid eligibility criteria, eligible coverage groups, services covered, administrative and operating procedures and payment levels.

The Medicaid program covers long-term nursing home care costs and many home health care costs, which are not covered by Medicare. If your income exceeds your state’s Medicaid eligibility threshold, there are two commonly used trusts that can be used to divert excess income to maintain your program eligibility.

Qualified Income Trusts (QITs): Also known as a “Miller trust,” this is an irrevocable trust into which your income is placed and then controlled by a trustee. The restrictions are tight on what the income placed in the trust can be used for (e.g., both a personal and if applicable a spousal “needs allowance,” as well as any medical care costs, including the cost of private health insurance premiums). However, due to the fact that the funds are legally owned by the trust (not you individually), they no longer count against your Medicaid income eligibility.

Pooled Income Trusts: Like a QIT, these are irrevocable trusts into which your “surplus income” can be placed to maintain Medicaid eligibility. To take advantage of this type of trust, you must qualify as disabled. Your income is pooled together with the income of others and managed by a non-profit charitable organization that acts as trustee and makes monthly disbursements to pay expenses on behalf of the individuals for whom the trust was made. Any funds remaining in the trust at your death are used to help other disabled individuals in the trust.

These income trusts are designed to create a legal pathway to Medicaid eligibility for those with too much income to qualify for assistance, but not enough wealth to pay for the rising cost of much-needed care. Like income limitations, the Medicaid “asset test” is complicated and varies from state to state. Generally, your home’s value (up to a maximum amount) is exempt, provided you still live there or intend to return. Otherwise, most states require you to spend down other assets to around $2,000/person ($4,000/married couple) to qualify.

Sit down with an experienced elder law attorney and your estate planning attorney. Together they can help restructure your assets to qualify for Medicaid. If you would like to learn more about Medicaid, please visit our previous posts.

Reference: Kiplinger (Nov. 7, 2021) “How to Qualify for Medicaid”

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When to have Healthcare conversation with Parents?

December 23, 2021

You have been noticing that your mother or father appears to be in cognitive decline. But you wonder when to have a healthcare conversation with your parents? Waiting until a senior’s decline is apparent may already be too late, says CNBC’s recent article entitled “Waiting to talk finance with an aging parent in cognitive decline is a mistake, experts say.”

Adult children should be talking to their elderly parents about this while they’re still working because they’re still competent and still able to fund long-term care and pay the premiums from income.

Some incidents that could trigger these conversations include a parent thinking about downsizing, claiming Social Security, going on an extended trip, or finding out one of their friends is going into long-term care.

Adult children should ask questions to get a clear sense of their parents’ financial situation. However, they should understand that getting this information may take several discussions.

Here are questions to ask your parents in stages, over a period of time (from least uncomfortable to most):

Where do you keep your financial and estate planning documents?
What assets do you have and what are your debts?
Is it possible to meet with your advisors to have a good understanding in the event of a crisis?
Who are your healthcare professionals?
What medications do you take and where’s your pharmacy?
Do you have long-term care insurance or other plans for long-term care?
What are your wishes as to end-of-life care and funeral plans and expenses?
If you have a medical crisis, what kind of treatment do you want?

Evaluate your parents’ responses with the help of an elder law attorney to these basic questions and plan the next steps.

There’s some paperwork that should be done at this point, if it hasn’t already. This includes a power of attorney, healthcare directive and a living will. Do not wait to have a healthcare conversation with your parents. Discuss your options and seek advice from an experienced Elder Law attorney. If you are interested in learning more about Elder Law, please visit our previous posts.

Reference: CNBC (Nov. 30, 2021) “Waiting to talk finance with an aging parent in cognitive decline is a mistake, experts say”

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Ways to reduce Financial Elder Abuse

December 17, 2021

The numbers are chilling. One in ten Americans age 60+ has experienced elder abuse. One of the most common forms of elder abuse is financial, says a recent article from Forbes titled “What Is Elder Financial Abuse—And How Do We Prevent It?” There are ways to reduce financial elder abuse.

Financial elder abuse is defined as when someone illegally or improperly uses an elderly person’s money for their own use. Elderly people are easy victims for obvious reasons. They may be mentally vulnerable, suffering from Alzheimer’s or other form of dementia. They may also be lonely and find the company of a new “friend” is so delightful that it impairs their judgement.

Financial elder abuse occurs most often from adult children, but also in nursing homes and assisted living facilities. Be on the watch for those new friends who enter senior’s lives, especially if they seek to limit contact with family members.

Caregivers or nursing staff have access to resident’s possessions, including checkbooks, ATM cards and credit cards. Monitoring an elderly parent’s bank accounts on a regular basis should be part of caregiving by adult children. Unusual transactions, large withdrawals or unlikely purchases by credit card should immediately be reported to their bank or credit card company.

Less obvious and harder to track, is when someone forces a nursing home resident to sign legal documents transferring ownership of homes, cars, bank accounts and even investment accounts. They may also be pressured into creating a new will.

Here are some red flags to watch for:

New names being added to bank accounts or on credit cards.
Finding unpaid bills, letters from collection agencies or past due notices from creditors, especially when the person has sufficient funds.
Relatives who suddenly show up and want to be involved with an aging senior, including estranged children.
The unexpected transfer of any kind of asset to someone who is not a family member.
Any change in habits concerning money, including someone who was never worried about money suddenly being concerned about paying bills.

The elderly are often scared to report being victimized. They may fear further loss of control over their lives or be embarrassed to have been scammed. If a caregiver is stealing, they may also be physically threatened, or frightened of losing their familiar care provider.

There are ways to reduce financial elder abuse. Talk to your estate planning attorney, speak with the local Adult Protective Services office, or contact the National Elder Fraud Hotline, if you are concerned about a loved one being financially exploited. If you believe a loved one is in physical danger, contact the local police. Don’t hesitate to ask for help. If you are interested in learning more about elder abuse, please visit our previous posts.

Reference: Forbes (Nov. 9, 2021) “What Is Elder Financial Abuse—And How Do We Prevent It?”

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Category: Nursing Home Care

Avoid Family Disagreements over Caregiving

Caring for sick Parent can be Challenging

Advance Care Planning a Benefit to Seniors

Medicaid Annuity might be an Option

Debt doesn’t Disappear when Someone Dies

Naming Power of Attorney is extremely important

Preventing Long-Term Care Abuse

Restructure Assets to Qualify for Medicaid

When to have Healthcare conversation with Parents?

Ways to reduce Financial Elder Abuse

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