Wisconsin Estate Planning

When the Diagnosis is Alzheimer’s, What Should You Do?

People who receive a diagnosis of Alzheimer’s disease, an incurable type of dementia, are overwhelmed by hopelessness. But two authors want to change that.

The authors of a new book, “Better Living With Dementia,” say it’s time to break the “cycle of despair” that accompanies an Alzheimer’s diagnosis. The Washington Post discussed this new perspective with the well-credentialed authors in a recent article, “Learning To Live Well With Dementia.”

Author Laura Gitlin is dean of the College of Nursing and Health Professions at Drexel University and Chair of the Department of Health and Human Services advisory council on Alzheimer’s Research, Care and Human Services. Her co-author is Nancy Hodgson, the Anthony Buividas endowed term chair in gerontology at the University of Pennsylvania.

These leading experts on care for people with cognitive impairment, say that while there’s no cure for Alzheimer’s, there are many things that can be done to make life better for people with dementia and their caregivers.

At a minimum, people newly diagnosed with dementia should consult with the Alzheimer’s Association, the Lewy Body Dementia Association, the Association for Frontotemporal Degeneration and the government’s website, alzheimers.gov. These are all great sources of information and potential assistance. Individuals and families should also get referrals to elder law attorneys, financial planners, adult day centers, respite services, caregiver support services and other resources.

About 70% of people with Alzheimer’s and other types of dementia live at home. Few professionals ask about patients’ living conditions, even though these environments play a major role in shaping people’s safety and well-being. It’s not uncommon for professionals to fail to let patients know what to expect as dementia progresses. This can fosters isolation, which worsens their sense of despair.

Even small steps could help improve quality of life. For example, give focused attention to the home setting itself. Hire an occupational therapist, ideally with expertise in dementia, to do a home assessment and recommend modifications. It’s also important to know what to expect. Individuals with dementia and their caregivers will find their needs changing as their illness progresses.

Initially, the most critical need may be getting a reliable diagnosis and understanding more about the type of dementia identified by your physician. A new study by Johns Hopkins University reports that 60% of people with dementia haven’t been diagnosed or aren’t aware of their diagnosis.

Further, depression and anxiety may need to be addressed, because people can struggle with the reality of a diagnosis, withdraw from work or social activities and worry about the future. Looking for ways to keep people engaged with meaningful activities can become a challenge.

In the final stage, severe dementia, people need sensory stimulation, like enjoyable music or a fragrant bouquet of flowers. Addressing distress, discomfort and pain are the big care challenges.

The challenge for family members and caregivers is to let dementia patients know that they belong and are surrounded with warmth and affection, at every stage of the disease. Even if they cannot acknowledge the presence of family and friends, their company is important.

Reference: The Washington Post (August 9, 2018) “Learning To Live Well With Dementia”

Need Something Else to Worry About? Try Long-Term Care

The statistics aren’t encouraging. About three quarters of Americans are likely to need long-term care, but very few are ready for the costs.

A recent article from Think Advisor paints a dismal picture of Americans who are just not preparing themselves for the inevitable facts of aging. The article, “Now You Can Add Long-Term Care to Death and Taxes,” says this may be one of the biggest disconnects in the USA: the gap between how many Americans will need long-term care versus what people actually think they’ll need.

Just 46% think they’ll need it, according to a new study that surveyed 2,000 people to see how prepared Americans were for the realities of long-term care.

Another misconception is the out-of-pocket cost of long-term care. The study found that the actual out-of-pocket cost of long-term care is more than $47,000.  However, many Americans think it’s about half that, $25,350.

In addition, $47,000 is the low end of the scale for the yearly cost per stay. While some assisted living costs may be $45,000, semi-private nursing homes are closer to $85,000. Private nursing home care is $97,455, according to the study, which was conducted by Digital Third Coast. The study was made up of 57.7% males and 42.3% females, while 56% were age 35 and younger, 33% were 36 to 55 years old and 11% were 56 and older.

Can you believe that 64% have nothing saved for long-term care, and 67% can’t contribute to a parent’s long-term care? The study found that Americans intend to save about $657 per month for long-term care.

Another issue between reality and perception, is the age that people think they’ll be when they need any sort of long-term care. Most study participants say it’s 79 years old.  However, it’s actually 73 years old, according to the study. Women will require long-term care on average for 3.7 years, and men will need it for about 2.2 years.

People in our country also have worries about putting relatives in long-term care, the study found. For example, 73% are concerned about physical/sexual mental abuse. About 41% said the cost was more than anticipated, and 48% hadn’t expected to put loved ones in long-term care. Only 33% actually have had discussions with family about when care is necessary.

One thing we do know is what we want when it comes to long-term care. We want quality of care, but we also want low costs, and we want facilities that are not too far from family members.

We just don’t want to think about how that’s going to be paid for.

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

How to Help Parents Get Estate Planning Done

Unless you’ve been the one to clean up after an inheritance disaster, it’s hard to comprehend how important estate planning is. Once you’ve been through the wringer, you don’t want to do it again.

There are families who understand the importance of estate planning.  There are even some who use it as a tool to facilitate discussions with their adult children about what they would want to happen if they were to become incapacitated and get their children on the same page about family values and legacies.

However, as reported in The Napa Valley Register’s “Estate planning for your parents,” not all parents are open to this. Some are insecure about their lack of knowledge, and there can be fear of the cost or undue influence. In some instances, parents just don’t want to come to terms with their mortality. Whatever it is, if a parent delays or doesn’t make an estate plan, the children will potentially have stress and conflict—and have to clean up the mess.

Probate is a tiresome, slow moving and bureaucratic headache. There are delays and hard feelings. Probate can also wind up with the wrong people inheriting wealth and family treasures. If you’re not certain if your parents have a proper estate plan designed by a knowledgeable attorney, there are several ways to approach this before a crisis.

The easiest way to see if your parents have a solid estate plan is to ask, “Hey Mom, do you and Dad have a will and a trust?” In addition, see if they have disability planning and other medical documents in place.

If a subtler approach is required, you can try asking for advice from your parents. Tell them you’re trying to get your personal affairs in order and need their help. You can ask them what estate planning they’ve done and what attorney they used. This may get them to open up about their situation, in order to help you with yours.  Another way to ease into this conversation is with an anecdote. You may know a person who had an easier time with proper planning, or maybe you know someone whose life was troubled by avoiding it.

If your parents simply don’t want to talk about this type of planning, you may seek the help of another sibling. They may respond better to your brother or sister.  You can also ask a relative or a trusted friend to broach the subject.   This may sound a little extreme, but there is another option to consider. If your parents are worried about their finances, you can offer to pay for an estate plan to be created. You may end up spending more after they pass, if there’s no estate plan in place. The amount of time, money and stress you avoid, makes this well worth it. Think of it as an investment in your emotional well-being.

Reference: Napa Valley Register (March 26, 2017) “Estate planning for your parents”

Understanding the Basics about Medicare

Even if you are still working, once you turn 65, you have to navigate your way through an entirely new and complex health care system. While there’s no HR department, there are resources.

It starts the day you turn 65, and it’s a bit of a challenge. Seniors need to get up to speed fast on the many requirements of Medicare. A Kiplinger post, “FAQs About Medicare,” warns that mistakes can be extremely costly and difficult to fix. You’ll want to study up on this in advance.

For starters, if you signed up for Social Security before age 65, you’ll automatically be enrolled in Medicare parts A and B and receive your card three months before your 65th birthday. Part A covers hospitalization and is generally premium-free. Part B covers outpatient care, such as doctors’ visits, x-rays and tests.

Here are more Medicare basics:

Sign-up for others. Everyone who is not part of the group above, must take action to enroll or face a lifetime late-enrollment penalty (unless you’re still working and have employer coverage). Go to www.socialsecurity.gov to sign up anytime from three months before, until three months after you turn 65, your “initial enrollment period”. This is true, even if you’re waiting to file for Social Security benefits.

If you (or your spouse if you’re covered by your spouse’s insurance) are still working for a company with 20 or more employees, the employer’s insurance is your primary coverage. Medicare is secondary and can fill any gaps in coverage. You don’t have to sign up for Medicare at 65, and you won’t have a late-enrollment penalty, provided that you sign up within eight months of leaving your job and losing work-based coverage (or losing coverage under your spouse’s insurance).

If you work for a large employer and like the coverage, you can delay signing up for Part B. However, the rules are different if you work for a company with fewer than 20 employees: Medicare generally becomes your primary coverage at age 65, and you must sign up for Part A and Part B while you’re still working. You can’t delay signing up for Part A, if you’re already receiving Social Security benefits and were automatically enrolled in Medicare, despite the fact you’re still working.

Health savings account. You can still contribute to a health savings account after you turn 65, provided you haven’t enrolled in Medicare. If you’re able to delay signing up for Medicare Parts A and B, you can continue contributing to an HSA. Before you do, see about the HSA’s tax breaks, any employer contributions and other benefits that would be more valuable than the premium-free Part A coverage.

Retiree health insurance. At age 65, unless you (or your spouse) are still working and have current employer coverage, you should sign up for both Medicare Part A and Part B. Retiree coverage can fill gaps in Medicare (which would otherwise require Medigap and Part D policies or a Medicare Advantage plan), but it’s secondary to Medicare after age 65. It may also not kick in at all, if you don’t sign up for Medicare. Federal retiree coverage is an exception. It remains your primary coverage if you don’t sign up for Medicare, but you’ll pay a penalty if you decide to sign up for Part B down the road.

The late-enrollment penalty is 10% of the Part B premium for every year you should have had coverage. The penalty applies as long as you receive Medicare benefits.

Medigap. You may need Medigap insurance to pay deductibles and co-payments. Most folks buy a Medicare supplement (Medigap) policy to pay those costs, plus Part D prescription-drug coverage since Medicare generally doesn’t cover drugs. Another option is to sign up for a private Medicare Advantage plan, which provides both medical and drug coverage. These policies are sold by private insurers and come in ten standardized versions. You get to go to any doctor or facility that is covered by Medicare. Private insurers sell part D prescription-drug plans. Medicare Advantage plans combine medical and drug coverage and may also provide coverage that isn’t available through Medicare, like dental and vision care.

Expensive drugs with high out of pocket costs, even with Part D coverage. Start by asking your physician if there is a generic version that costs less, or if you can use a preferred pharmacy. Then start shopping for a new plan during open enrollment in the fall.

Reference: Kiplinger (May 2017) “FAQs About Medicare”

Home Health Care Services: Funding Sources

How do people manage to find and pay for home health care services? One part of the problem is explored here: funding support.

It can be overwhelming to learn that a loved one needs to receive in-home healthcare services. Will the person ever regain their ability to care for themselves? What kind of person should be taking care of your loved one? What is the best source for care? How will the care be paid for?

Miami's Community Newspapers’ article, “How to Pay for Home Healthcare without Going Broke,” says that many funding resources for in-home services may cost very little or nothing. There are some funding resources for seniors who don’t qualify for government programs. However, bear in mind that some carry financial risks. An experienced Elder Law attorney can help you find the best options for your circumstances.

There are also several different types of caregivers for senior caregiving. You should learn about various roles, since their funding is from different sources.

Personal Care. There are many names for personal care assistants like home care aides, custodial care aides, personal care assistants and companionship aides. They help seniors with hygiene and grooming activities. These caregivers are self-employed and aren’t required to have any certification, licensing or insurance. They typically charge 20-30% less than workers from home health care agencies. Medicare doesn’t cover funding for personal caregiving alone. As a result, most families use personal savings for this service.

Home Healthcare. Home healthcare aides (HHA) or certified nurse aides (CNA), personal care aides (PCA) and geriatric workers are considered skilled care. They perform duties like taking a pulse or monitoring blood pressure and personal care. They help with medication management and medical equipment, and provide a higher level of care. HHAs usually work with home health care agencies that have state certification to bill under Medicare and are bonded, licensed and insured.

Seniors who need these types of care, should look for funding for home healthcare in several areas:

Medicare and Veteran’s Administration. Two primary sources of funding for skilled senior care are Medicare and the Veteran’s Administration. Home health agencies take care of the billing.

Medicaid. Some in-home healthcare services may not be covered under the Medicare or Veteran’s Administration plans, so seniors with Medicaid may need to bill for some medical services separately.

State Programs. The Older Americans Act offers funding to states for Meals on Wheels and meals served in senior centers. It also funds programs for health promotion and family caregiving support.

Personal Funding. Maximize federal and state funding before you use your personal finances. There are several ways to finance uncovered costs like your personal savings, annuities, long term care insurance, a reverse mortgage, life insurance policy conversion, home care loans and a home equity line of credit.

Ask a Professional for Advice. There are a number of professionals who can help you figure out the best way to pay for the care, if you need to tap into personal funds. An Elder Lawyer or an estate planning attorney will be able to make recommendations for geriatric care managers or eldercare resource planners. An estate planning attorney will be able to help you understand payment options and how paying from personal funds will impact the person’s financial health and estate plan.

Reference: Miami's Community Newspapers (March 21, 2017) “How to Pay for Home Healthcare without Going Broke”

Planning in Advance: How to Help Your Aging Parents

A longer lifespan is a wonderful blessing for many, but for others a longer lifespan doesn’t always translate into an enjoyable quality of life. Lengthy chronic illnesses lead to exponentially increased healthcare costs. This requires advanced planning.

It rarely comes the way that you expect it. One second your parents are planning their next trip in the RV, and then you mom breaks her hip in a serious fall and your dad is diagnosed with congestive heart failure.

How the devil did this happen? This is the basic question asked by Chicago Now in its article, “Getting Old Sucks: Why To Start Estate Planning With Your Parents.” As the article puts it: “you are officially on the rollercoaster ride to elder hell.”

Fortunately, there are things you can do on this bumpy ride to make it easier on you and your parents. While it’s uncomfortable at first discussing the topic of death with your parents, it’s necessary and important.

Talk to them about estate planning and make sure that they have wills, durable healthcare and financial powers of attorney (POA). If your parents don’t have these documents, you should make an appointment with a qualified estate-planning attorney and get this completed as soon as possible.

For example, what if your father has a debilitating stroke, doesn’t regain consciousness, and needs 24/7 medical support indefinitely? Without a health care directive, the hospital will keep him alive, even in a vegetative state, until he passes naturally.

You’ll be unable to have him removed from life support, unless you can show the physician and hospital administrators his legally valid health care directive and his medical POA that details his wishes. Without these estate planning documents, you and your mother will have limited control on how he should be treated.

From a financial standpoint, it is important to remember that the hospitals will continue to bill you even when your father is on life support and technically brain dead. After 100 days of Medicare coverage, your mom will be fully responsible for these care and treatment expenses, if there’s no supplemental insurance.

Your best and only defense: start talking with your parents about how they want to live, age and what kind of end-of-care life they want. Don’t hope that it resolves itself. This usually leads to emotional, legal and financial disaster.

Once you have your parent’s estate plan in place, start on your own. Estate planning is necessary at every stage of life.

Reference: Chicago Now (March 7, 2017) “Getting Old Sucks: Why To Start Estate Planning With Your Parents”

How to Help a Victim of Elder Financial Exploitation

Shame and fear of family relationships, are often the reasons why elderly people, who have been victims of elder financial abuse, are afraid to seek recourse against their abusers.

Many seniors who are exploited and abused, are the victims of people they know, often family members, caregivers or other people who they thought were looking out for their best interests. Fear of repercussions, including repeat abuse, and worries about bringing shame to themselves and their families, are two reasons why these crimes are often not reported.

As Yahoo Finance posted in “What to Do If You or Someone You Love Has Been Financially Exploited,” betrayal by a family member or another trusted person is especially hard on those who are financially abused. Seniors who've been financially exploited, may feel shame and guilt. Consequently, they do not feel entitled to help or support, let alone to feel victimized.

The widespread nature of financial exploitation shows that it can happen to almost anybody. There are many states that are trying to find ways to legally address financial exploitation and to better address and deter this abuse, as the population ages and an increasing number of seniors are vulnerable.   Most states criminalize financial elder abuse.   This means that, in addition to laws already in effect to prosecute theft, there are added penalties which can be filed in financial exploitation cases involving seniors or vulnerable adults, increasing the jail time for perpetrators.

If someone you love has been the victim of financial abuse, it is not just a financial loss. There is a strong sense of shame and remorse. They will need counseling to work through these intense feelings, and it may take some time for their emotional health and ability to trust other people to return. They will also need patience and understanding from family members.

Reference: Yahoo Finance (March 14, 2017) “What to Do If You or Someone You Love Has Been Financially Exploited”

When Caring for an Elderly Parent Becomes a Second Job

More than 45 million Americans take care of an elderly family member, usually an aging parent. This can have negative impact on their own family, from finances to strained relationships.

It only seems fair: your parents took care of you when you were young, and now they need your help. Aging parents often need adult children to handle medical care and finances, when they can no longer manage on their own. When the level of care spills over into the adult child’s own finances and impacts their careers, it can become a hardship.

MarketWatch’s article, “Read this before becoming your parents’ caregiver,” reports that, in many instances, the adult child caregiver is still able to maintain a full career and family life. However, in certain situations, the family member who’s assumed the role of a full-time caregiver must reduce his or her work hours or forego a promotion because of the time commitment. In the majority of situations, we see adult children answer the call of caregiving in a crisis when there’s an imminent need. A short-term assignment can be doable for a professional with his or her other family and personal responsibilities, but when the duties last longer, he or she will realize there isn’t enough time or resources to do it all.

A caregiver needs to take the actions necessary to help without putting his or her own family’s financial future at issue. When there are siblings and other family members involved, it is necessary to communicate realistic expectations of what areas of care are needed, responsibilities, time commitments and whether there will be any financial compensation.

A Personal Care Agreement can be a good guideline.  It will help to detail which individuals are responsible for various aspects of care, the amount of time required and any compensation. The biggest question that people have about this agreement, is how to get paid to be a family caregiver.

A Personal Care Agreement can give an adult child caregiver the peace of mind and security that he or she won’t suffer undue financial consequences, as well as provide clear details for other family members as to the expectations when assuming these important caregiving responsibilities.

This agreement can help avoid some of the misunderstandings that can occur when many siblings and loved ones are trying to help (or fail to pitch in). It also can protect a family member who is losing his or her own income and time to provide caregiving. This is because reduced hours or an exit from the workforce to care for a loved one, can have a major personal financial impact. In addition, the time for a personal and immediate family life with one’s own spouse and children can nearly evaporate with caregiving demands.

An Elder Law attorney can help create a Personal Care Agreement that will protect you from any accusations of financial elder abuse and clarify the responsibilities and role that you have taken on as the parent’s primary caregiver. This will also protect you from any charges that care payments were a way of hiding assets from Medicaid.  It is also suggested that you hold a family meeting, with the Elder Law attorney, if necessary, so that all family members understand the situation.

Reference: MarketWatch (February 22, 2017) “Read this before becoming your parents’ caregiver”

Passing Down the Family Home: Joint Tenancy vs. Trust

There are two ways to give the family home to your children without having the property go through probate, but how do you know which one is better?

Being in the position to give your children or child ownership of the family home, keeps the house in the family and is a financial blessing for the family member. However, it’s important to note that this kind of a transaction needs the guidance of an estate planning attorney in order to make sure that it goes right, because every situation is different. These are general guidelines that can help get you started.

If you add another person, i.e., an adult child, as a joint tenant on your home, then you each have an equal ownership interest in the house. When one of you passes, the other owns the entire property and there is no need for probate. But there are some risks, according to an article, “Is It Better to Use Joint Ownership or a Trust to Pass Down a Home? in elderlawanswers.com.

One disadvantage of joint tenancy is that creditors can attach the tenant's property to satisfy a debt. In such a case, if a co-tenant defaults on his or her debts, the creditors can sue in a partition proceeding to have the property interests uncoupled so the property can be sold, even over the objections of the non-debtor owner(s). What’s more, without a creditor issue, one co-owner of the property can sue to partition the property and can force another owner to move out.

Joint tenancy can also impact the capital gains treatment of the property. When you give property to a child, the tax basis for the property is the same price for which you purchased the property.  However, inherited property receives a step up in basis. This means that the basis would be the current value of the property. When you pass, your child inherits your half of the property—one half of the property will receive a step up in basis.  However, the tax basis of the gifted half of the property will be the same as the original purchase price. If your child sells the home after the parent dies, he or she would have to pay capital gains taxes on the difference between the tax basis and the selling price. To avoid this tax, the child must live in the house for at least two years before selling it. When that happens, he or she can exclude up to $250,000 ($500,000 for a couple) of capital gains from taxes.

Revocable Trust

If you place the property in a revocable trust and name yourself as the beneficiary and your child as the beneficiary after you die, the property will go to your child without going through probate when you pass away. A trust will also be able to guarantee you the right to live in the house and take into account changes in circumstances, like if your child passes away before you do.

One other important benefit of a trust pertains to capital gains taxes. The tax basis of property in a revocable trust is stepped up when you die. This means the basis in the home would be the date of death value of the property. Therefore, if your child sells the property immediately after inheriting it, the value of the property would not see much change. As a result, the capital gains taxes would be little or nothing.

Trusts can be structured to offer more flexibility and protection for all concerned. An estate planning attorney will be able to help you choose the best option for your family and prepare all of the necessary legal documents.

Reference: elderlawanswers.com (February 27, 2017) “Is It Better to Use Joint Ownership or a Trust to Pass Down a Home?

Mid-Life Marriages, Money and Myths

Getting married after you’ve put a few miles on, is very different than when you are fresh out of the gate. Resolving legal issues before the wedding, can alleviate many common marital issues.

There are admittedly challenges when people decide to get married after fifty. There are also many myths, as reported by Forbes in “6 Money Myths About Marrying After 50.” If you or your intended has children from a prior marriage, there are added complications that need to be addressed.

1: Prenups Are Just for The Rich and Famous. This is not true. If you’ve been married before and have children from a previous relationship, a prenuptial agreement is important to ensure that your assets will pass to your children from the prior marriage. What about a first-time marriage? There still might be a need for a prenup, especially if you own significant assets. Don’t think of a prenup as preparing for divorce, but rather more like writing your will. If you don’t have your affairs in order, the state will decide for you—just like dying without a will. After age 50, the focus of a prenup should be on protecting your children and grandchildren. For instance, some states allow a surviving spouse to claim his or her “elective share”, instead of what’s in the decedent's will. A prenup allows your spouse to waive the elective share. That means the odds are that your estate plan won’t be challenged by your surviving spouse.

2: Don’t Talk Estate Planning with Your Stepfamily. Estate planning is critical when you have children from an earlier marriage.  Otherwise, your entire estate could pass to your new spouse and not to your own children. Have a candid discussion about your estate planning and prenup with your adult children and your new spouse. This will alleviate some of the concerns adult kids may have about how it will affect their inheritance, when their parent gets remarried.

3: Holding Assets Jointly Is Always Preferable. Long before getting married, couples should decide on whether they want to have separate or joint accounts and if one will sell his or her current home. If one of you sells their home, will the deed to the house you live in be changed to reflect joint ownership? It is best to have these discussions before the wedding ceremony.

4: Your New Spouse’s Debt Won’t Impact You. This is a big one. Marrying a person with a large amount of debt, whether it’s college loans or credit card debt, can be a major issue in second marriages. Therefore, spouses should be upfront and candid about their debts before marrying. That way they can plan how to address the debt.

5: It Always Makes Financial Sense to Get Married. This is not always true. It depends on your personal and financial circumstances. Tying the knot may reduce your Social Security benefits, especially if you didn’t work while you were married the first time and can claim spousal benefits that are much higher than your own Social Security benefits. If you have an ill or disabled partner on Medicaid, then you might want to stay unmarried so he or she can to continue to qualify for benefits. The combined marital income might make your partner ineligible for Medicaid.

6: Being Married Means Your Spouse May Automatically Make Medical Decisions on Your Behalf. This is one of the things you really want to take care of before you need it. The only way to be sure that your new spouse can make medical decisions for you, is by having a Health Directive drafted and executed that details your wishes regarding end-of-life care. This is something to address when you don’t need it, and both of you should have this. It’s part of a number of documents that you should have prepared by an experienced estate planning attorney when you sit down to update your wills and other legal documents.

One final note: blended families do better when there is a lot of communication between parents, step-parents, kids and step-kids, whether the kids are in elementary school or grown adults with kids of their own.

Reference: Forbes (February 13, 2017) “6 Money Myths About Marrying After 50”