Estate Planning When Faced with a Serious Illness

More young and middle-aged workers find themselves in the role of family caregiver.
Everyone needs estate planning documents, but a serious illness makes that need more urgent. 

More than 130 million Americans are living with chronic illness. Forbes’ recent article, “Estate Planning Musts When You Or A Or A Loved One Has A Chronic Illness,” says that if you (or a loved one) are living with a chronic illness, you’ll likely need the same estate planning documents most people should have.

The article discusses these key estate planning documents, along with some suggestions that might help you customize them to your unique challenges because of chronic illness. These documents need to be tailored to your specific needs, so you should consult your estate planning and elder law attorney about what works best for you.  It’s also best to put your estate planning documents in place soon after your diagnosis, so that you can return your focus to your health, family and well-being.

HIPAA Release. The Health Insurance Portability and Accountability Act of 1996 governs the requirements for maintaining the confidentiality of protected or personal health information (PHI). A HIPAA Release lets someone you trust access your protected health information.  This is an important estate planning document because it provides your decision makers with information about your condition so they can best serve your needs.

Living Will. This is a statement of your health care wishes and can address end of life decisions, as well as many other matters. If you’re living with a chronic illness, there are special considerations you might want to make in having a living will prepared. For example, you might explain your specific disease while continuing to address other health issues.  You can address the disease you have, at what stage and with what anticipated disease course, and how if at all these matters should be reflected. It is also critically important to discuss these wishes with your loved ones before the issue arises so they understand what you want.

Medical Power of Attorney. This is sometimes known as a medical proxy. It is an estate planning document in which you designate a trusted person to make medical decisions for you if you’re unable to do so. You can give guidance to your medical agent about your preferences, goals and concerns in your medical care.

Financial Power of Attorney. This estate planning document lets you designate a trusted person to handle your legal, tax, and financial matters if you can’t or if it becomes difficult to do so. There are some unique considerations for those living with chronic illnesses to consider. One is the amount of control that should be given up now or at what stage. Another key issue in a power of attorney is if you should sign a special power that restricts the agent’s authority to certain specified items or sign a general power that provides broad and almost unlimited powers to the agent.  It is especially importantly that your power of attorney include authority to handle Medicaid and other long term care benefits if you are facing a serious illness.

Appointment for the Disposition of Remains.  This is a basic estate planning document by which you choose a person to execute your burial wishes and let them know what those wishes are.

Declaration of Guardians.  This is an estate planning document in which you name a person to serve as a court appointed guardian should you need one.  If you have the other documents in place you’ll likely never need this, but it is important to have as a safety net naming someone you trust to be guardian instead of a court appointed agency or lawyer if the need ever arises.

Will and Revocable Trust. Finally, Wills and  Revocable Trusts are estate planning documents which control the flow of assets at your passing.  You should speak with your attorney about which is right for you, but if you or a family member has a chronic illness, using a revocable trust may be a good way to provide for succession of your financial management.  A revocable trust allows the successor trustee to act quickly to manage the finances if you cannot do so yourself and under the guidelines you create.  This way, the trustee can pay for the care you need.

Everyone should have these estate planning documents as part of a well-crafted legacy plan, but if you or a loved one is facing a serious or chronic illness, you may be facing additional challenges that make this planning more critical.

Reference: Forbes (July 5, 2019) “Estate Planning Musts When You Or A Or A Loved One Has A Chronic Illness”

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Long Term Care: What’s it all About?

Long term care costs have a heavy impact and most people don’t know how to pay them. Long term care insurance and a well crafted estate plan can help.

Many people are scared about the prospect of needing help in a long term care setting, and they are right to be worried. For many people, a spouse or adult children will become the go-to caregivers, but not everyone will have that option, says Market Watch’s article “This is how much long-term care could cost you, and don’t expect Medicare to help.”

If that’s not worrisome enough, here are facts to consider:

  • More than a third of people will spend some time in a nursing home, where the median annual cost of a private room is well over $100,000, says Genworth’s 2018 Cost of Care Survey. Don’t expect those numbers to go down.
  • Four of ten people will opt for paid care at home, and the median annual cost of a home health aide is more than $50,000.
  • Half of people over 65 will eventually need some kind of long term care costs, and about 15% of those will incur more than $250,000 in costs, according to a joint study conducted by Vanguard Research and Mercer Health and Benefits.

Medicare and even private health insurance don’t cover what are considered “custodial” expenses. That’s going to quickly wipe out the median retirement savings of most people: $126,000. With savings completely exhausted, people will find themselves qualifying for Medicaid, a government health program for the indigent that pays for about half of all nursing home and custodial care.  See our website for more information https://galligan-law.com/practice-areas/elder-law/.

Those who live alone, have a chronic condition or are in poor health have a greater chance of needing long term care. Women in particular are at risk, as they tend to outlive their husbands, may not have anyone available to provide them with unpaid care and the burden of caring for their spouses affects their own health. If a husband’s illness wipes out the couple’s savings, the surviving spouse is at even greater risk with fewer options.

The best hedge against long term care costs is to purchase a long term care insurance policy, if you are eligible to purchase one and it is cost effective. Wait too long, and you may not be able. One woman persuaded her parents to purchase a long term insurance policy when her father was 68 and her mother was 54. Five years into the policy, her father was diagnosed with Parkinson’s disease. The policy covered almost the entire cost of his 24-hour care in the final months of his life. Her mother lived to 94, so the investment in the policy was well worth it.

Everyone approaching retirement needs a plan for long term care costs. That may be purchasing long term care insurance or purchasing a hybrid life insurance product with long term care benefits.  If such products aren’t available, we can craft an estate plan which facilitates using government benefits in the future, like Medicaid, so that you and your loved ones get appropriate care while preserving as much of your legacy as possible.

Reference: Market Watch (July 19, 2019) “This is how much long-term care could cost you, and don’t expect Medicare to help.”

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Elder Law Community Follows Proposed New Alzheimer’s Legislation

Assistance may be on the way for those with younger onset Alzheimer's disease.
Assistance may be on the way for those with younger-onset Alzheimer’s disease.

Elder law issues can also affect those under 65. About 200,000 individuals aged less than 65 have younger-onset Alzheimer’s disease, according to Clay Jacobs, executive director of the Greater Pennsylvania Chapter of the Alzheimer’s Association.

“The need to reach everyone affected will grow significantly in the coming years,” he said.

A bipartisan effort in Congress to make these elder care services available to younger people affected by Alzheimer’s disease recently resulted in the introduction of new proposed legislation known as the “Younger-Onset Alzheimer’s Disease Act.”

Nutritional programs, supportive services, transportation, legal services, elder-abuse prevention and caregiver support have been available through the “Older Americans Act” since 1965. However, under the current law, only individuals over 60 are eligible for these kind of elder care services.

“These programs would make a huge difference in the lives of individuals living with younger-onset Alzheimer’s disease, who don’t have support services available to them,” said a Congressional hearing witness Mary Dysart Hartt of Hampden, ME, a caregiver to her husband, Mike, who has young-onset Alzheimer’s.

Another bipartisan effort in Congress affecting elder law involves the proposed “Lifespan Respite Care Act” to help communities and states provide respite care for families. This legislation would earmark $20 million for fiscal year 2020, with funding increasing by $10 million annually to reach $60 million for fiscal year 2024. The program lets full-time caregivers take a temporary break from their responsibilities of caring for aging or disabled family members.

Elder law attorneys are following this legislation in hopes that the new laws, if passed, will provide additional ways to help those afflicted with early onset Alzheimer’s disease and to ease the burdens on full-time caregivers.

Reference: McKnight’s Senior Living (April 3, 2019) “Bill would aid those with younger-onset Alzheimer’s disease”

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