Assisting Your Parents with Planning For Long Term Care
Assisting Your Parents with Planning For Long Term Care
It isn’t easy to discuss financial planning and long term care with aging parents. Parents may be resistant to admitting that finances are less than rock-solid or that they have not thoroughly planned for their own futures.
Parents of a certain generation, moreover, may simply consider such topics to be verboten and not the subject of polite conversation—even with their own, well-meaning children.
Nevertheless, it is a conversation worth having if you are unclear where your parents stand. The US social safety net system does not provide much in the way of assistance to the aging and infirm, after all.
Hardship for parents in their Golden Years is very likely to mean hardship for their adult children.
Thus, a little advance planning can go a long way toward making things easier for all of you as time goes by.
How to do that, exactly, may be a conversation worth having along with a Florida attorney with the experience and empathy required to fully explain your parents’ options for elder care.
Step One: Reviewing Your Parents’ Finances
No matter how uncomfortable this conversation may be, the starting point is to gain an accurate understanding of your parents’ finances.
The creation of a present monthly budget is a worthwhile initial exercise, even before scheduling an appointment with a Florida elder care attorney.
A good, average monthly budget will be a tool that you can bring to your consultation appointment that will save time during the meeting and allow your prospective attorney to make more accurate recommendations.
On the income side of the balance sheet, you will want to itemize monthly average income from all sources.
Your parents may yet be working, so, first, include monthly average wages. You’ll want to note the gross, pre-deduction wage amount, then sub-itemize all paycheck and other deductions so that you can examine retirement account contributions, tax deductions, and other variable deductions to ensure that your parents are neither over- nor under-deducting in important areas.
Other monthly income sources—Social Security age or disability benefits, pension or other retirement benefits, investment, or portfolio income, etcetera—should then next be itemized.
Along the way, you’ll learn what financial assets your parents actually have, if this has not been previously discussed.
On the expense side of the budget, simply have your parents list out what they spend money on regularly, each month, on average.
This is more difficult than it sounds for many people. How much money do you spend on clothing each month? The typical twenty-something male will answer, “Nothing,” and yet he does not walk around naked.
For expenses that are “regular” but not necessarily “monthly,” ask your parents how much they spend on, say, clothing in a full year, and then divide that number by 12 (months) for inclusion in the budget worksheet you are creating.
Be sure to ask about charitable contributions, including money sent to televangelists and other religious contributions. Such individuals are in the business of convincing the elderly over television to send them money—and they are good at it.
Subtracting the total average monthly expense amount you arrive at from the net, post-deduction total average monthly income will provide you a great deal of insight into your parents’ finances and their behavior.
Step Two: Exploring Medicare/Medicaid Options
Understanding what your parents’ income actually may be important in exploring what their options for long term care insurance coverage under Medicare and Medicaid may be.
Why is income important in the exploration of Medicare and Medicaid options?
Medicare is a governmental benefits program designed for people aged 65 and older to help with the cost of short-term visits to nursing facilities.
It does not assist with long term care.
Medicaid, alternatively, is available for families below certain income levels. As of this writing, a household of two must have a combined income no higher than $23,169 to qualify.
The application process for either program is complicated. A Florida attorney can be very helpful in deciphering the eligibility requirements for your parents.
Other governmental benefits, such as Social Security Disability benefits, may be available if one or both of your parents are unable to work or earn an income due to an injury or medical condition.
A Florida disability attorney will also be able to advise as to the availability of these benefits.
Step Three: Discussing Other Long Term Care Options
If your parents are not eligible for governmental benefits, that does not mean that there are no other options for long term care cost assistance.
Long-term disability insurance is another option if your parents’ budget can support the further expense of monthly or annual premiums.
While you may not require the assistance of an Orlando disability lawyer to obtain an LTD insurance policy, it is an unfortunate fact that a great many claims are denied when filed.
A long-term disability claim can be denied for lack of sufficient documentation, erroneous documentation provided, or with the excuse that the medical condition in question is simply not covered by the policy your parents purchased.
An insurer may also dispute the severity of the claim and deny that long term care is required.
In any of these instances, the assistance of a Florida elder care attorney will be highly useful to your parents.
An attorney will ensure, during the claims filing process, that all documentation is properly, fully, and accurately submitted, along with all necessary evidence.
Step Four: Drafting Durable Powers of Attorney
The creation of a durable power of attorney for your mother or father is another service best provided by a Florida elder care or estate planning attorney.
What is a durable power of attorney?
It is not a power of attorney that conveys your legal authority to another for the management of your affairs under normal circumstances.
A durable power of attorney is a document that is drafted for a person with full capacity intact (i.e., not yet incapacitated) that will convey authority to govern his or her affairs.
Florida law provides that a durable power of attorney survives the incapacity of a person. In the case of such incapacity, it transfers the authority of another, known as an “Agent,” to make decisions for the person with regard to a wide array of financial, legal, and other such decisions.
A durable power of attorney can even authorize an Agent to provide for beneficiaries and to create or modify trusts, should the worst happen.
It is a cost-effective and less governmentally intrusive means of providing such authority to another than a court-ordered and -supervised guardianship or conservatorship.
The durable power of attorney will give your parents the right, while able, to choose the Agent to whom they would like to grant this authority.
A warning to the interested and caring adult-child reading this article: it may be the case that you are not your parents’ preferred Agent for this purpose.
Be prepared to accede to your parents’ wishes in this matter and, potentially, to have that conversation in the presence of a licensed Florida attorney obligated by a legal duty to your parents.
A durable power of attorney forms downloaded from the internet are highly suspect and may not be legally enforceable under Florida state law.
A Florida elder care attorney or estate planning attorney should always be consulted for the drafting of such legal documents.
Step Five: Helping Parents to Avoid Scams, Including Reverse Mortgages
Being involved with your parents’ financial and other decisions as they age is a good way, in and of itself, to help them to sidestep a variety of perils.
An entire industry of scammers and con artists exists for the sole purpose of preying upon the elderly.
From phony tax return filers to phone-callers pretending to be grandparents and other relations, to Medicare and Medicaid scams, robocalls, televangelism, email phishing, fake charities, and more, there are enormous dangers for unsophisticated elderly simply in answering the phone or opening an email.
Is it fair to lump reverse mortgages in with scams?
Largely yes.
Reverse mortgage brokers utilize sophisticated marketing techniques to convince elderly homeowners to leverage what may be their only sizeable asset, their home equity, to offset the struggles posed by fixed income daily living.
With the promise of a lump sum of cash, your parents may sign a mortgage entitling the mortgage originator or its subsequent assignee to foreclose upon the home immediately upon your parents’ death.
The terms of these “reverse mortgages” are often unfavorable. Worse, if the home is owned in title by only one of your parents, who engages in a reverse mortgage transaction, the non-owning parent may be in quick need of relocation should he or she survive the owning spouse.
Open communication between you and both of your parents, as applicable, may go a long way toward protecting them or, at least, ensuring that everyone is making financial decisions together.
Step Six: Asset Protection
This article has identified a few ways in which you can assist your parents in protecting their assets.
Gaining an understanding of what assets they possess—both physical and financial—is the first and most necessary step.
Once you know that, helping them to avoid being scammed out of their assets is the next step.
Beyond that, retaining a Florida attorney to ensure that wills, trusts, and other estate planning documents are properly drafted to ensure the protection and later conveyance of assets according to your parents’ wishes and with maximum tax favorability is the more necessary step you can take.
Again, forms downloaded from the internet are generally to be avoided.
Instead, consult an experienced Florida elder care and estate planning attorney to ensure that all such documents are drafted in compliance with Florida law and with Federal tax law.
Hiring the Right Florida Elder Long Term Care Attorney
Hiring the right Florida elder care attorney is the final and best step you can take to ensure that your parents are protected and care for as they age.
Attorney Shea Fugate has successfully represented Florida elder law clients for over 20 years.
The Law Offices of Shea A. Fugate, P.A. offers free initial consultations. Contact us now at 407-539-0123 to schedule your appointment.
