Dec
31
2014
0

Mom Is Showing Some Dementia – Can we still create a long term care plan for her?

In my workshops, we talk about the Elder Care Journey. Along this journey, which I show on a chart, is an area called “Declining Senior With Memory or Mobility Issues.”  I reference this step along the Elder Care Journey as a DANGER ZONE. We know that mobility issues and falling oftentimes is the beginning of a downward slope for our older loved ones. A person with mobility issues but who still has good mental capacity can of course enter into a long term care estate plan. She can agree in the plan that if she loses capacity, her loved ones can proceed with asset preservation, possible gifting, transfer of her home for asset protection, and getting her ducks in a row for qualification for Medi-Cal, etc.

If she has lost mental capacity by the time she sees her elder law attorney, she will not be able to enter into such a plan. If there is a formal diagnosis for instance of advanced dementia, we of course will not be able to proceed. In that case, if she has the plain vanilla type of estate plan, which is more suitable for a younger person, the plan will most likely not have the powers to allow her fiduciary to complete gift transfers or to transfer the home to her spouse or her children for asset protection. In that event, we may need to go to court to obtain an order to reform her existing estate planning documents.

If Mom has some dementia, such as short term memory loss, she may still have sufficient mental capacity to enter into a long term care plan. We can usually tell through our interview and conversation with her if she understands what the plan is about. If we are not certain, we can ask her medical doctor whether he would be willing to confirm in a letter that she has sufficient mental capacity to create the estate plan.

The sooner the older client sees the elder law attorney, the better. It is never too late to do long term care planning, but it is much more expensive if we need to go to court to complete the planning.

For additional information, you can contact your elder law attorney Michael J. Young. This information is not to be taken as legal advice, and you are encouraged to see your elder law attorney. At the law offices of Michael J. Young, 1931 San Miguel Dr., Ste. 220, Walnut Creek, CA http://www.WalnutCreekElderLaw.com, 925-256-0298,lawyoung1@gmail.com, we practice elder law and we help Baby Boomers, Seniors and families through their Elder Care Journey. We help families with Sustainable Estate Planning, long term care planning, asset protection plans, special needs trusts, comprehensive estate planning, wills, trusts and powers of attorney. We also help Baby Boomers and families get their “Ducks in a Row” in order to help them qualify for Medi-Cal and the VA Aid & Attendance Improved Pension Benefit.

Dec
15
2014
0

Final Expense Trust For No Fee

As part of your long term care planning, you can also plan ahead for payment of funeral costs. You can put an amount you decide on into an “irrevocable final expense trust” which will pay for funeral and related costs at the time of your passing. The money you put into the final expense trust earns interest until the time the trust is used. If you pass away, your surviving loved ones do not start writing checks to the funeral home. They instead will take the final expense trust to any funeral home, and present it for payment for funeral and related services.

This part of pre-planning makes it much easier on your loved ones when you are gone, in that an amount for your funeral costs has been established, and the check has already been written and the funds are in the trust. There is no longer a need for your loved ones to scramble for funds for payment to the funeral home. The funds placed into the trust are protected by National Guarding Life (NGL), which uses a life insurance policy to fund the trust. With the use of the policy, the funds are not taxable upon your passing. The trust is also not subject to creditors’ claims because it is irrevocable. In addition, there is no legal fee for the creation of the trust, in that the trust is prepared by NGL.

The use of this type of trust can also be useful as part of Medi-Cal planning. When funded  properly, the money in the trust will not be counted for Medi-Cal eligibility, and will not be available for recoupment from the state. There is a wide range of related services that the fund in the trust can also be used for, such as clergy honorarium, death certificates, musicians, flowers, memoriam celebration, transportation equipment and driver. Any funds that are not used will go to your named beneficiary.

For additional information, you can contact your elder law attorney Michael J. Young. This information is not to be taken as legal advice, and you are encouraged to see your elder law attorney. At the law offices of Michael J. Young, 1931 San Miguel Dr., Ste. 220, Walnut Creek, CA http://www.WalnutCreekElderLaw.com, 925-256-0298,lawyoung1@gmail.com, we practice elder law and we help Baby Boomers, Seniors and families through their Elder Care Journey. We help families with long term care planning, asset protection plans, special needs trusts, comprehensive estate planning, wills, trusts and powers of attorney. We also help Baby Boomers and families get their “Ducks in a Row” in order to help them qualify for Medi-Cal and the VA Aid & Attendance Improved Pension Benefit.

Dec
01
2014
0

More On Alternative Long Term Care Insurance Options for Baby Boomers

In our last post we discussed how many of our Baby Boomer clients have looked into buying long term care insurance, but have decided against the purchase because of various reasons. Some feel that the cost is too high, or they don’t like the idea that if you don’t use it, you lose most of it. Also, some of our clients have been denied coverage because of their age, health issues, or both. Fortunately, there are alternatives to consider for our older clients.

Many of our clients have several hundred thousand dollars in various investments, including savings accounts, mutual funds, annuities and IRAs, in addition to their home. This would appear to be a nice nest egg, but would be depleted quickly if they were in need of 24/7 care. For a single person, the cost of care could conservatively be $90,000 or more per year and twice that for a couple.

One option is to purchase a type of annuity which provides payments for long term care. The initial premium payment for the annuity could create 2 to 3 times the amount of the premium in long term care payments. For example, if you re-position $50,000 into the annuity, then $100,000 to $150,000 could be available for long term care expenses. The underwriting for this type of product is much simpler than applying for long term care insurance, but the age and health of the client is still taken into account.

In addition, under the “Pension Protection Act”, you could withdraw the $50,000 tax free from an existing annuity to purchase an annuity with the long term care payment option. You could also fund the purchase of this new product using IRA money through an income tax free “trustee to trustee transfer.”

When you visit our office, ask us to help you explore the possibility of repositioning a portion of your assets for payment of your long term care should you need it in the future. These options should be explored as part of your long term care asset protection and estate planning.

For additional information, you can contact your elder law attorney Michael J. Young. This information is not to be taken as legal advice, and you are encouraged to see your elder law attorney. At the law offices of Michael J. Young, 1931 San Miguel Dr., Ste. 220, Walnut Creek, CA http://www.WalnutCreekElderLaw.com, 925-256-0298,lawyoung1@gmail.com, we practice elder law and we help Baby Boomers, Seniors and families through their Elder Care Journey. We help families with long term care planning, asset protection plans, special needs trusts, comprehensive estate planning, wills, trusts and powers of attorney. We also help Baby Boomers and families get their “Ducks in a Row” in order to help them qualify for Medi-Cal and the VA Aid & Attendance Improved Pension Benefit.

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