As elder law attorneys, we keep a finger on the pulse of trends that can have an impact on our clients. At this time, Alzheimer’s disease is one of the most significant sources of concern. Everyone has heard of the disease, but you may be surprised when you know all the facts.
The Alzheimer’s Association is a fantastic source of information about this disease, and they also provide resources for families that are directly impacted. According to research that they cite, about one third of elders that are 85 years of age and older have contracted the disease. The figure is 10 percent for senior citizens of all ages.
There are those that assume that it is unlikely that they will live into their mid-80s and beyond. In fact, the statistics tell a different tale.
There is a life expectancy calculator on the Social Security Administration website. If you use this tool to plug in the expected lifespan of a person that is turning 67 today, will find that it is 85 years for a man, and 87 years for a woman.
Most people expect to live long enough to collect Social Security when they are 66 or 67, and if you are one of them, you have to accept the fact that you may ultimately be quite vulnerable to Alzheimer’s disease.
Now that you can see why the need is there, there are steps you can take to brace yourself for this eventuality. People with dementia find it difficult to handle their own affairs at some point in time. It is worthwhile to point out the fact that Alzheimer’s is not the only cause of dementia.
To account for decision-making, you can execute legally binding documents called durable powers of attorney. The “durable” designation is operative, because a standard power of attorney that is not durable would no longer be in effect upon the incapacity of the grantor.
A typical incapacity plan will include two durable powers of attorney. One of them would be used to select a financial representative, and you should add a durable power of attorney for health care decision-making.
In order for your health care agent to be able to speak freely with your doctors, you have to include a HIPAA release form. Another document that should be part of the plan is a living will. With this type of will, you state your preferences with regard to the utilization of life support.
If you use a living trust as the centerpiece of your estate plan, you would act as the trustee while you are alive. To account for potential incapacity, you can name a disability trustee that would assume the role if it ever becomes necessary.
Long-Term Care Costs
A significant percentage of elders ultimately reside in nursing homes. According to the United States Department of Health and Human Services, the figure is 35 percent. The average stay is 12 months, and most of these people suffer from some form of cognitive impairment.
In our practice areas, the median annual cost for a private room in a nursing home is over $175,000. Costs have been rising year-by-year, so the figure may be considerably higher if you need long-term care in a decade or two.
Medicare does not cover the custodial care that you would receive in a nursing home, so this gap is a big deal. Medicaid will cover nursing home costs, but since it is a need-based program, you cannot qualify if you have significant assets in your own name.
That’s the bad news, but the good news is that there are steps that you can take to reposition your assets effectively with future Medicaid eligibility in mind.
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We are here to help if you would like to develop a pragmatic plan for aging. You can send us a message to request a consultation appointment, and we can be reached by phone at 860-548-1000.