Author: Randy Coleman

Short-Term Care Insurance: An Alternative to the Long-Term Care Variety

cost of long term care from elder law attorney medicaid lawyer in jacksonville, floridaA little-known insurance option can be an answer for some people who might need care but are unable to buy long-term care insurance. Short-term care insurance provides coverage for nursing home or home care for one year or less.

As long-term care premiums rise, short-term care insurance is gaining in popularity. This type of insurance is generally cheaper than its long-term care counterpart because it covers less time. Purchasers can choose the length of coverage they want, up to one year. According to the American Association for Long-Term Care Insurance a typical premium for a 65-year-old is $105 a month.

People who can’t qualify for long-term care insurance because of health reasons may be able to qualify for short-term care coverage. This kind of insurance doesn’t usually require a medical exam and sometimes only has a few medical questions on the application. Another benefit of short-term care insurance is that there usually is not a deductible. The policies begin paying immediately, without the waiting period usually found in long-term care policies.

Short-term care policies are not the answer for everyone. They may not cover all the levels of care that a long-term care policy would cover. As with any insurance product, buyers need to make sure that they understand what coverage they are purchasing.  And these policies are not regulated to the same extent that long-term care insurance policies are, so there are fewer consumer protections.

Short-term care policies may be beneficial for individuals who waited too long to purchase long-term care insurance (short-term care can typically be purchased up to age 89). They can also help fill gaps in Medicare coverage or cover the deductible period before long-term care insurance begins paying. The policies may also be appealing to single women because there is no price difference for women and men, as there is for long-term care insurance.

Finally, the short-term care policy may be part of the answer to the waiting period that impacts many Floridians seeking Medicaid coverage under one of the waiver programs.

For more information about these policies from Forbes, click here.

For more information about planning for long-term care and obtain eligibility for Medicaid benefits to pay for long-term care, give our office a call to schedule a consultation.  With nursing home costs exceeding $8,000 per month in most Florida locations, Medicaid may ultimately be the only possible way to provide for long term care.  We can help.

The Costs of Dementia: For the Patient and the Family

Medicaid planning to cover costs of Alzheimer's and dementiaA recent report from the Alzheimer’s Association states that one in nine Americans age 65 or older currently has Alzheimer’s. With the baby boomer generation aging and people living longer, that number is expected to nearly triple by 2050. Alzheimer’s, of course, is just one cause of dementia—mini-strokes (TIAs) are also to blame—so the number of those with dementia may actually be higher.

Caring for someone with dementia is more expensive—and care is often needed longer—than for someone who does not have dementia. Because the cost of care in a facility is out of reach for many families, caregivers are often family members who risk their own financial security and health to care for a loved one.

In this post, we will explore these issues and steps families can take to alleviate some of these burdens.

Cost of Care for the Patient with Dementia—And How to Pay for It

As the disease progresses, so does the level of care the person requires—and so do the costs of that care. Options range from in-home care (starting at $46,332 per year) to adult daycare (starting at $17,676 per year) to assisted living facilities ($43,536 per year) to nursing homes ($82,128 per year for a semi-private room). These are the national average costs in 2016 as provided by Genworth in its most recent study. Costs have risen steadily over the past 13 years since Genworth began tracking them.

Care for a person with dementia can last years, and there are few outside resources to help pay for this kind of care. Health insurance does not cover assisted living or nursing home facilities, or help with activities of daily living (ADL), which include eating, bathing and dressing. Medicare covers some in-home health care and a limited number of days of skilled nursing home care, but not long-term care. Medicaid, which does cover long-term care, was designed for the indigent; the person’s assets must be spent down to almost nothing to qualify. VA benefits for Aid & Attendance will help pay for some care, including assisted living and nursing home facilities, for veterans and their spouses who qualify.

Those who have significant assets can pay as they go. Home equity and retirement savings can also be a source of funds. Long-term care insurance may also be an option, but many people wait until they are not eligible or the cost is prohibitive. However, for the most part, families are not prepared to pay these extraordinary costs, especially if they go on for years. As a result, family members are often required to provide the care for as long as possible.

Financial Costs for the Family

Women routinely serve as caregivers for spouses, parents, in-laws and friends. While some men do serve as caregivers, women spend approximately 50% more time caregiving than men.

The financial impact on women caregivers is substantial. In another Genworth study, Beyond Dollars 2015, more than 60% of the women surveyed reported they pay for care with their own savings and retirement funds. These expenses include household expenses, personal items, transportation services, informal caregivers and long-term care facilities. Almost half report having to reduce their own quality of living in order to pay for the care.

In addition, absences, reduced hours and chronic tardiness can mean a significant reduction in a caregiver’s pay. 77% of those surveyed missed time from work in order to provide care for a loved one, with an average of seven hours missed per week. About one-third of caregivers provide 30 or more hours of care per week, and half of those estimate they lost around one-third of their income. More than half had to work fewer hours, felt their career was negatively affected and had to leave their job as the result of a long-term care situation.

Caregivers who lose income also lose retirement benefits and social security benefits. They may be sacrificing their children’s college funds and their own retirement. Other family members who contribute to the costs of care may also see their standard of living and savings reduced.

Emotional and Physical Costs to Caregivers

In addition to the financial costs, caregivers report increased stress, anxiety and depression. The Genworth study found that while a high percentage of caregivers have some positive feelings about providing care for their loved one, almost half also experienced depression, mood swings and resentment, and admitted the event negatively affected their personal health and well-being. About a third reported an extremely high level of stress and said their relationships with their family and spouse were affected. More than half did not feel qualified to provide physical care and worried about the lack of time for themselves and their families.

Providing care to someone with dementia increases the levels of distress and depression higher than caring for someone without dementia. People with dementia may wander, become aggressive and often no longer recognize family members, even those caring for them. Caregivers can become exhausted physically and emotionally, and the patient may simply become too much for them to handle, especially when the caregiver is an older person providing care for his/her ill spouse. This can lead to feelings of failure and guilt. In addition, these caregivers often have high blood pressure, an increased risk of developing hypertension, spend less time on preventative care and have a higher risk of developing coronary heart disease.

What can be done?

Planning is important. Challenges that caregivers face include finding relief from the emotional stress associated with providing care for a loved one, planning to cover the responsibilities that could jeopardize the caregiver’s job or career, and easing financial pressures that strain a family’s budget. Having options—additional caregivers, alternate sources of funds, respite care for the caregiver—can help relieve many of these stresses. In addition, there are a number of legal options to help families protect hard-earned assets from the rising costs of long term care, and to access funds to help pay for that care.

The best way to have those options when they are needed is to plan ahead, but most people don’t. According to the Genworth survey, the top reasons people fail to plan are they didn’t want to admit care was needed; the timing of the long-term care need was unforeseen or unexpected; they didn’t want to talk about it; they thought they had more time; and they hoped the issue would resolve itself.

Waiting too late to plan for the need for long-term care, especially for dementia, can throw a family into confusion about what Mom or Dad would want, what options are available, what resources can help pay for care and who is best-suited to help provide hands-on care, if needed. Having the courage to discuss the possibility of incapacity and/or dementia before it happens can go a long way toward being prepared should that time come.

Watch for early signs of dementia. The Alzheimer’s Association (www.alz.org) has prepared a list of signs and symptoms that can help individuals and family members recognize the beginnings of dementia. Early diagnosis provides the best opportunities for treatment, support and planning for the future. Some medications can slow the progress of the disease, and new discoveries are being made every year.

Take good care of the caregiver. Caregivers need support and time off to take care of themselves. Arrange for relief from outside caregivers or other family members. All will benefit from joining a caregiver support group to share questions and frustrations, and learn how other caregivers are coping. Caregivers need to determine what they need to maintain their stamina, energy and positive outlook. That may include regular exercise (a yoga class, golf, walk or run), a weekly Bible study, an outing with friends, or time to read or simply watch TV.

If the main caregiver currently works outside the home, they can inquire about resources that might be available. Depending on how long they expect to be caring for the person, they may be able to work on a flex time schedule or from home. Consider whether other family members can provide compensation to the one who will be the main caregiver.

Seek assistance. Find out what resources might be available. A local Elder Law attorney can prepare necessary legal documents, help maximize income, retirement savings and long-time care insurance, and apply for VA or Medicaid benefits. He or she will also be familiar with various living communities in the area and in-home care agencies.

Conclusion

Caring for a loved one with dementia is more demanding and more expensive for a longer time than caring for a loved one without dementia. It requires the entire family to come together to discuss and explore all options so that the burden of providing care is shared by all.

We help families who may need long term care by creating an asset protection plan that will provide peace of mind to all. If we can be of assistance, please don’t hesitate to call.

Not Just Death and Taxes: 5 Essential Legal Documents You Need for Incapacity Planning

Comprehensive estate planning is more than your legacy after death, avoiding probate, and saving on taxes. Good estate planning includes a plan in place to manage your affairs if you become incapacitated during your life and can no longer make decisions for yourself.

What happens without an incapacity plan?

Without a comprehensive incapacity plan in place, your family will have to go to court to get a judge to appoint a guardian or conservator to take control of your assets and health care decisions. This guardian or conservator will make all personal and medical decisions on your behalf as part of a court-supervised guardianship or conservatorship. Until you regain capacity or die, you and your loved ones will be faced with an expensive and time-consuming guardianship or conservatorship proceeding. There are two dimensions to decision making that need to be considered when considering incapacity planning: financial decisions and healthcare decisions.  If you are a young couple with small children, an even more important reason for incapacity planning is for you to designate the person or persons you want to provide care and make decisions for your children’s benefit if both you and your spouse are unable to provide care for your children.

  • Finances during incapacity

If you are incapacitated, you are legally unable to make financial, investment, or tax decisions for yourself. Of course, bills still need to be paid, tax returns still need to be filed, and investments still need to be managed.  If you own and operate a small business, you should designate someone to preside over the company’s operations if you have become incapacitated.

  • Healthcare during incapacity

If you become legally incapacitated, you won’t be able to make healthcare decisions for yourself. Because of patient privacy laws, your loved ones may even be denied access to medical information during a crisis and end up in court fighting over what medical treatment you should, or should not, receive (like Terri Schiavo’s husband and parents did, for 15 years).

You must have these five essential legal documents in place before becoming incapacitated so that your family is empowered to make decisions for you:

  1. Financial power of attorney: This legal document gives your agent the authority to pay bills, make financial decisions, manage investments, file tax returns, mortgage and sell real estate, and address other financial matters that are described in the document.

Financial Powers of Attorney come in two forms: “durable” and “springing.” A durable power of attorney goes into effect as soon as it is signed, while a springing power of attorney only goes into effect after you have been declared mentally incapacitated. There are advantages and disadvantages to each type, and we can help you decide which is best for your situation.

  1. Revocable living trust: This legal document has three parties to it: the person who creates the trust (you might see this written as “trustmaker,” “grantor,” or “settlor” — they all mean the same thing); the person who legally owns and manages the assets transferred into the trust (the “trustee”); and the person who benefits from the assets transferred into the trust (the “beneficiary”). In the typical situation, you will be the trustmaker, the trustee, and the beneficiary of your own revocable living trust. But if you ever become incapacitated, your designated successor trustee will step in to manage the trust assets for your benefit. Since the trust controls how your property is used, you can specify how your assets are to be used if you become incapacitated (for example, you can authorize the trustee to continue to make gifts or pay tuition for your grandchildren).
  1. Medical power of attorney: This legal document, also called a medical or health care proxy, gives your agent the authority to make healthcare decisions if you become incapacitated and are unable to communicate with your healthcare providers.
  1. Living will: This legal document shares your wishes regarding end of life care if you become incapacitated. Although a living will isn’t necessarily enforceable in all states, it can provide meaningful information about your desires even if it isn’t strictly enforceable.
  1. HIPAA authorization: This legal document gives your doctor authority to disclose medical information to an agent selected by you. This is important because health privacy laws may make it very difficult for your agents or family to learn about your condition without this release, even for your spouse.

Is your incapacity plan up to date?

Once you get all of these legal documents for your incapacity plan in place, you cannot simply stick them in a drawer and forget about them. Instead, your incapacity plan must be reviewed and updated periodically and when certain life events occur such as moving to a new state or going through a divorce. If you keep your incapacity plan up to date and make the documents available to your loved ones and trusted helpers, it should work the way you expect it to if needed.

 

Four Provisions People Forget to Include in Their Estate Plan

Even if you’ve created an estate plan, are you sure you included everything you need to? There are certain provisions that people often forget to put in in a will or estate plan that can have a big impact on your family.

1. Alternate Beneficiaries

One of the most important things your estate plan should include is at least one alternative beneficiary in case the named beneficiary does not outlive you or is unable to claim under the will. If a will names a beneficiary who isn’t able to take possession of the property, your assets may pass as though you didn’t have a will at all. This means state law will determine who gets your property, not you. By providing an alternative beneficiary, you can make sure that the property goes where you want it to go.

It’s also a good idea to name a “remote contingent beneficiary.”  A remote contingent beneficiary is the persons or organizations you designate to receive your assets if all of the beneficiaries named in your will or trust do not survive you.  Though in most cases that won’t happen, it is not a total impossibility.  By naming remote contingent beneficiaries to take in the event none of the other named beneficiaries survive you, you can choose which persons or organizations receive your assets rather than the assets going to remote relatives you never knew existed, or worse, going to the state where you live at the time of your death.

When naming alternate beneficiaries, be sure to take into account the alternate beneficiary’s age and condition, so that protective trusts can be used for minor children or grandchildren, or those with any form of incapacity.

2. Personal Possessions and Family Heirlooms

Not all heirlooms are worth a lot of money, but they may contain sentimental value. It is a good idea to be clear about which family members should get which items. You can write a list directly into your will, but this makes it difficult if you want to add items or delete items. A personal property memorandum is a separate document that details which friends and family members get what personal property. In some states, if the document is referenced in the will, it is legally binding. Even if the document is not legally binding, it is helpful to leave instructions for your heirs to avoid confusion and bickering. Often, it is the tangible personal property items that causes the greatest disagreements when an estate settles and is distributed to the beneficiaries.

3. Digital Assets

More and more we conduct business online. What happens to these online assets and accounts after you die? There are some steps you can take to help your family deal with your digital property. You should make a list of all of your online accounts, including e-mail, financial accounts, Facebook, Mint, and anywhere else you conduct business online. Include your username and password for each account.  Also, include access information for your digital devices, including smartphones and computers. And then you need to make sure the agent under your durable power of attorney and the personal representative named in your will have authority to deal with your online accounts.

Florida has specifically provided for access to digital assets by fiduciaries, including agents pursuant to a durable power of attorney, personal representatives of probate estates, and trustees of trust estates, in Chapter 740, Florida Statutes.

4. Pets

pet trusts, animal trusts, trust for pets, pet trust lawyerPets are beloved members of the family, but they can’t take care of themselves after you are gone. While you can’t leave property directly to a pet, you can name a caretaker in your will and leave that person money to care for the pet. Don’t forget to name an alternative beneficiary as well. If you want more security, in some states, you can set up a pet trust. With a pet trust, the trustee makes payments on a regular basis to your pet’s caregiver and pays for your pet’s needs as they come up.

We have a special interests in pets and pet trusts, and have provided continuing legal education programs to other Florida Bar members regarding the proper structuring of pet trusts.

Contact us to make sure your will, trust, or other estate planning takes care of all your needs, and your pets.

Who Pays the Nursing Home While Waiting for Medicaid Approval?

Can a person apply for Medicaid before assets are spent down to below $2,000?

Once assets are down to $2,000, who is responsible for paying the nursing home costs while waiting for Medicaid approval — the wife, the children – and how much must be paid to the nursing home?

Medicaid attorney in jacksonville florida for medicaid benefits to pay for nursing home costsIn Florida, an individual can apply for Medicaid benefits to pay nursing home costs before they are actually eligible.  The approval will take effect upon the date the application is approved. While the nursing home resident’s application for Medicaid benefits is pending, the nursing home resident is considered “Medicaid pending.”  When someone has the status “Medicaid pending,” generally the resident will pay all of the resident’s income to the nursing home facility.  If the nursing home resident’s income is greater than what is allowed to qualify for Medicaid benefits, then a qualified income trust wil become necessary.

In some cases, a healthy spouse of the nursing home resident is entitled to a share of the nursing home resident’s income. In other cases, the spouse of the nursing home resident is entitled to a share of the nursing home resident’s assets. In those cases, the nursing home resident can transfer savings to the spouse rather than spending down assets to less than $2,000. As elder law attorneys, we can help you determine how these different scenarios will work in your situation.

For more on Medicaid’s protections for the healthy spouse so that the healthy spouse is not rendered indigent and can remain in the home after the nursing home resident is living in the nursing home (the “community spouse”), click here.

For more on shifting income to the healthy spouse from the spouse in the nursing home, without interfering with receiving the Medicaid benefits to pay the nursing home, click here.

For more on transferring assets to the healthy spouse to bring the nursing home resident’s assets below $2,000, click here.

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Better to Play it Safe: Proactive Estate Planning and Cognitive Impairment

Elder law attorneys can help plan your estate to include cognitive impairment or Alzheimer's diseaseMost financially savvy individuals begin planning their estate when they’re in peak mental shape. The idea that this might change at some point in the distant future is an unpleasant one, and they would rather go about their estate planning as if they’ll be as sharp as a tack late into their golden years. Unfortunately, this common approach of ignoring a potential problem and hoping it simply won’t happen can leave a giant hole in your estate plan. Read on to find out that this common hole can be more easily filled than you might think.

Expect the best, but plan for the worst

The reality is that an individual’s chances of experiencing some form of cognitive impairment rise with age. While it’s never certain whether cognitive impairment will occur, smart estate planning means factoring it in as a very real possibility.

As the huge baby boomer generation transitions from the workforce and begins to make their way into retirement, cases of Alzheimer’s are expected to spike from the current 5.1 million to 13.2 million as soon as 2050. Alzheimer’s is just one of several cognitive impairment conditions along with dementia and the much more common mild cognitive impairment, or MCI, which is often a precursor to those more serious ailments.

As U.S. life expectancies increase, the chances of living with cognitive impairment increase as well — with at least 9.5 percent of Americans over 70 experiencing it in one form or another.

No matter your age or family history, cognitive impairment can affect anyone although it’s widely accepted to affect mostly older adults. As you implement or revise your estate plan, it is well worth the effort to plan for this potential. Luckily, estate planning attorneys have developed good solutions to handle this circumstance and can help guide you on the best way to protect yourself and your family.

An easily-avoidable estate planning mistake

Consider Ashley’s story. A successful real estate agent with a stellar career in her hometown of Kalamazoo, MI, Ashley begins planning her estate in her mid-thirties.

She partners with an estate planning attorney, and together they draft a revocable living trust with Ashley’s preferred beneficiaries and charities in mind, figure out guardianship for her two sons in case she and her husband pass suddenly, and settle on an appropriate beneficiary for her life insurance policy. Now that she knows where her assets will go after her death, Ashley rests easy assuming there’s nothing more that needs doing in her estate plan.

Save your family from obstacles and conundrums

But forty years down the road, Ashley’s children realize her MCI is developing into Alzheimer’s. Although she’s occasionally visited with her attorney to make adjustments to her plan,  she never added any provisions for how she wanted her children and other guardians to handle a situation like this. Here’s where things get complicated.

Ashley did not work with her estate planning attorney to put disability provisions into her trust and never worked with an insurance professional to purchase adequate income insurance or long-term care insurance. The care she requires to live her best life possible with cognitive impairment doesn’t come cheap. Those mounting care costs will likely quickly erode Ashley’s estate. As a result, her estate plan may no longer work as intended, since it no longer lines up with her actual asset portfolio.

But since Ashley does not have the ability to rework her estate plan in her current mental state, her family is left with the burden of figuring out what to do while navigating a complex and bureaucratic legal system in the guardianship or conservatorship court. No one in the family really knows what Ashley’s wishes are regarding both serious medical decisions and financial changes. All Ashley’s family wants is to see her enjoying her remaining years in peace and security, but they are now tasked with using guesswork to make difficult choices on her behalf while a guardianship or conservatorship court watches every move.

There are several alternatives to a court-supervised guardianship or conservatorship, but they involve advanced planning – either when you complete your estate plan, or later before the onset of such impairments.  After Alzheimer’s has made it impossible for you to have legal capacity to sign documents, it is unlikely you’re circumstances will ever improve so that you parents will find you old.

Give us a call today

Factoring the potential for cognitive impairment into your estate plan doesn’t have to be a headache. In fact, a little effort now by legally designating who you want to be in charge and what you want them to do can have a wonderful impact on you and your family later on. We can work together to ensure your estate plan is ready for whatever life throws your way. Give us a call today to find out how painless and cost-effective this process can be.

Avoid Living Probate: How to Keep Guardians and Conservators Out of Your Estate

While most long term care and estate planning to avoid guardianship - elder law attorney or estate planning attorneyproactive individuals know the importance of having a well-rounded estate plan, it is typically considered as something that will take effect
after they have passed away. But there are in fact many ways in which comprehensive estate planning can have a positive impact on your life while you are still around to reap the benefits.

Planning for Incapacity

Most people who reach old age come to a point at which they are no longer in a position to handle all of their affairs on their own. In many cases this incapacity is due to dementia or other cognitive impairments associated with the elderly. At that point, the decisions they’ve made with their estate planning attorney can have major repercussions on their lifestyle and the handling of their wealth.

Take Alex for example. Long before Alex retired from his long and successful career as an IT manager at a large corporation, he put a cursory estate plan in place with a will detailing who would get which of his assets upon his death. But, Alex didn’t update his plan as he aged. In his late seventies, he developed Alzheimer’s and it became unclear to his family how to proceed with his medical care and wealth management. Since Alex did not formally choose an individual to be in control of his affairs in the event of incapacity, it falls upon the court to appoint a guardian or conservator. Unfortunately, that’s where things get complicated.

What is guardianship?

Guardianship goes by a few other names, so it’s important to get familiar with various terms used to indicate similar and somewhat overlapping concepts. The other terms you may hear include “conservatorship,” “plenary guardianship,” and “living probate.”

It’s important to note that these terms are used in slightly different manners from state-to-state, with some states using “guardian” and “conservator” interchangeably. Others maintain the distinction of a guardian being a person who makes decisions about medical care and living arrangements, whereas a conservator makes decisions about property and assets. In either case, the guardian or conservator is essentially a substitute decision maker that’s authorized by the court to make decisions on behalf of the incapacitated person.

3 Reasons You Should Avoid It

In the process of living probate, the court tries to settle on solutions that will fit the incapacitated individual’s best interests. That being said, there is a much better way. Here are just a few of the reasons guardianship and conservatorship are not ideal fallbacks:

  1. Cost: To put it simply, living probate is expensive. The legal fees associated with court-appointed attorneys representing incapacitated individuals can chip away at their estates very quickly. Living probate also brings your affairs into the public sector.
  1. Privacy: Alex may not have wanted his family to have to experience the financial and emotional costs of his living probate court proceedings, but he may also have felt less than enthusiastic about his personal affairs being discussed in a public forum.
  1. Clarity: In addition to it being costly and a compromise of privacy, living probate is also full of guesswork. If Alex had assigned powers of attorney and established long-term care provisions in his estate plan, his affairs would be handled exactly as he wished in the event of his incapacity. When the court is involved, they usually apply default rules of state law, which means the legislature is essentially making some choices for you and your family.

How to Structure Your Estate Plan

So what does an individual like Alex need to do in order to avoid the chance of his family having to go through living probate? There are a few specific steps we can take to make in planning your estate to ensure your affairs never end up in a court-appointed guardian’s hands:

  • Powers of attorney: A complete estate plan includes named powers of attorney who will fulfill the roles of guardians and conservators in the event of your incapacity. The difference is that these individuals will be chosen by you rather than by the court. There are a number of different types of powers of attorney for specific purposes, such as a healthcare power of attorney or a general durable power of attorney, the latter of which controls the management of your finances.
  • Long-term care planning: Although you may never need long-term care, building a strategy for it into your estate plan will allow you to relax knowing that you’ll receive long-term care according to your wishes if that becomes necessary. This type of planning also helps protect the assets in your estate plan from being used up on medical expenses before going to your beneficiaries.

Avoiding guardianship and conservatorship through living probate is a relatively pain-free process if handled well ahead of time. Get in touch with us today to go over the parts of your estate plan that may need amending to give you and your family the best possible outcomes. We are here to help and can quickly get your estate plan in optimal shape.

New Medicare Rule Encourages Doctors to Test for Alzheimer’s Disease and Offer Care Planning

long term care planning for Medicaid eligibility to pay nursing home costsA new Medicare rule will promote earlier diagnosis of Alzheimer’s disease. Medicare will now reimburse primary care doctors who conduct an Alzheimer’s evaluation and offer information about care planning to elderly patients with cognitive impairment.

According to the Alzheimer’s Association, more than 5 million Americans have the disease. In addition, more than 85 percent of Alzheimer’s patients also have another chronic condition. But many are unaware that they have Alzheimer’s disease because they haven’t been diagnosed.

Under the new rule, primary care doctors who test patients for cognitive impairment can bill Medicare for their services. Testing for Alzheimer’s disease can involve taking a thorough medical history, testing a patient’s mental status, doing a comprehensive physical and neurological exam, and conducting blood tests and brain imaging. Previously, there was no specific Medicare reimbursement for dementia testing, so many doctors did not take the time to do it.

In addition, doctors can bill Medicare if they offer help to Alzheimer’s patients with care planning by providing information on treatments and services. Receiving early diagnosis and proper care planning can be critical for Alzheimer’s patients. According to Robert Egge, Alzheimer’s Association Chief Public Policy Officer, “Proper care planning results in fewer hospitalizations, fewer emergency room visits and better management of medication — all of which improves the quality of life for both patients and caregivers, and helps manage overall care costs.”

While Medicare will now pay for dementia testing and care planning, Medicare does not pay for long-term custodial care services for Alzheimer’s patients. Medicare’s nursing home coverage is limited to skilled care provided by a physical therapist, registered nurse, or licensed practical nurse.

Often families can preserve substantial assets by following legally allowable procedures to protect assets from spend down prior to qualifying for Medicaid, which does provide substantial support for long term care planning and custodial care services.  If you have a family member who may need long term care financial support, you should contact to help you determine if long term care planning or Medicaid planning may be beneficial for your family.

 

florida durable power of attorney, elder law attorney and lawyer

Sign a Power of Attorney Before It’s Too Late

durable power of attorney by elder law attorney and lawyerIn my last post to this blog, I explained why it is so important to put in place a durable power of attorney.  In this post, I want to emphasize why it is important to get that power of attorney in place before you need it.  If you wait until you need it, you’ll be too late.

Why Do I Need A Durable Power of Attorney?

As we discussed in that prior post, a durable power of attorney is an extremely important estate planning tool, even more important than a will in many cases.  This crucial document allows a person you appoint — your “attorney-in-fact” or “agent” — to act in place of you — the “principal” — for financial, business and legal, purposes when and if you ever become incapacitated due to dementia or some other reason, such as a stroke, heart attack, automobile accident, or other reasons that might arise.  The agent under the durable power of attorney can quickly step in and take care of your affairs.

To properly execute a power of attorney and name an agent to stand in your shoes, you need to have legal capacity.  Regrettably, many people delay completing this vital estate planning step until it’s too late and they no longer legally have the capacity for signing the document and giving it full legal effect.  Won’t wait until its too late!

What Happens If You Do Not Have A Durable Power of Attorney?

What happens then? Without a properly executed durable power of attorney, no one can represent you unless a court appoints a conservator or guardian. That court process takes lots of time, costs lots of money, and the judge may not choose the person you would prefer. In addition, under a guardianship or conservatorship, the representative may have to seek court permission to take planning steps, make long term care decisions, engage in basic financial transactions, that your agent could implement immediately with a properly executed simple durable power of attorney.  In effect, the judge, or the person appointed by the judge as your guardian, will be “in charge” of determining what issues are brought to the probate judge’s attention.  Either the judge or the guardian will be making decisions that may have a profound effect on you and your family.  No one really wants to be the subject of a guardianship.

This is why it’s so important that you have a durable power of attorney in place before the capacity to sign the document becomes an issue.  The standard for legal capacity with respect to durable powers of attorney varies from state to state. Some courts and lawyers argue that this threshold can be quite low: that you need only know that you trust the agent to manage your financial affairs. Others argue that since the agent generally has the right to enter into contracts on behalf of the principal, the principal should have the capacity to enter into contracts as well, and the threshold for entering into contracts is fairly high.  In Florida, you must show that the person signing the durable power of attorney has the capacity, and does in fact understand, who are the natural objects of his or her estate (the identity of children, grandchildren, etc.), and the nature, approximate value, and the extent of the estate assets.

How Do I Choose An Agent to Act on My Behalf?

If you do not have someone you trust to appoint as your agent, it may be more appropriate to have the probate court looking over the shoulder of the person who is handling your affairs through a guardianship or conservatorship. In that case, you may want to sign a limited durable power of attorney that simply nominates the person you want to serve as your conservator or guardian. Most states require the court to respect your nomination “except for good cause or disqualification.”

Because you need a third party to assess capacity and because you need to be certain that the formal legal requirements are followed, it can be risky to prepare and execute legal documents on your own without representation by an attorney. To sign a durable power of attorney before it’s too late, contact a local experienced elder law attorney.

Can I Prepare My Own Power of Attorney?

If you insist on preparing your own Florida durable power of attorney, without the assistance of a Florida attorney because you don’t want to meet with one or pay for one, we actually offer a power of attorney for you to prepare online that complies with all of the changes in the Florida power of attorney statute that was completely rewritten in 2011.  We review your input for that power of attorney so that you can know that it will be enforceable in Florida.

Durable power of attorney in Florida by experienced elder law lawyer

Top Reasons Everyone Needs a Comprehensive Power of Attorney

Florida durable power of attorney formThe benefits of a highly detailed, comprehensive durable power of attorney are numerous. Unfortunately, many powers of attorney are more general in nature and can actually cause more problems than they solve, especially for seniors. This post highlights the benefits of a comprehensive, detailed durable power of attorney, including some of the provisions that should be included. A proper starting point is to emphasize that the proper use of a durable power of attorney as an estate planning and elder law document depends on the reliability and honesty of the appointed agent.

The agent under a power of attorney has traditionally been called an “attorney-in-fact” or sometimes just “attorney.” However, confusion over these terms has encouraged the terminology to change so more recent state statutes tend to use the label “agent” for the person receiving power by the document.

The “law of agency” governs the agent under a durable power of attorney. The law of agency is the body of statutes and common law court decisions built up over centuries that dictate how and to what degree an agent is authorized to act on behalf of the “principal”—in other words, the individual who has appointed the agent to represent him or her.

Powers of attorney are a species of agency-creating document. In most states, powers of attorney can be and most often are unilateral contracts – that is, signed only by the principal, but accepted by the agent by the act of performance.

Much has been written about financial exploitation of individuals, particularly seniors and other vulnerable people, by people who take advantage of them through undue influence, hidden transactions, identity theft and the like.

Many articles in the legal arena have addressed guardianships and conservatorships in Florida and discussed the benefits of court supervision of care of vulnerable people in such contexts. Even though exploitation risks exist, there are great benefits to one individual (the principal) privately empowering another person (the agent) to act on the principal’s behalf to perform certain financial functions.

A comprehensive durable power of attorney may include a grant of power for the agent to represent and advocate for the principal in regard to health care decisions. Such health care powers are more commonly addressed in a separate “health care power of attorney,” which may be a distinct document or combined with other health topics in an “advance health care directive.”

Another important preliminary consideration about powers of attorney is “durability.”  “Durability” or a “durable” power of attorney is one that does not lose its legal effectiveness in the event the principal becomes incapacitated.

Powers of attorney are voluntary delegations of authority by the principal to the agent. The principal has not given up his or her own power to do these same functions but has granted legal authority to the agent to perform various tasks on the principal’s behalf. All states have adopted a “durability” statute that allows principals to include in their powers of attorney a simple declaration that no power granted by the principal in this document will become invalid upon the subsequent mental incapacity of the principal. The result is a “durable power of attorney” – a document that continues to be valid until a stated termination date or event occurs, or the principal dies. Absent durability provisions, the power of attorney terminates upon the principal’s death or incapacity.

Having covered the explanation of what a durable power of attorney is, let us look at the top benefits of having a comprehensive durable power of attorney.

1. Provides the ability to choose who will make decisions for you (rather than a court).

If someone has signed a durable power of attorney and later becomes incapacitated and unable to make decisions, the agent named can step into the shoes of the incapacitated person and make important financial decisions. Without a durable power of attorney, a guardianship or conservatorship may need to be established, and can be very expensive and intrusive.  It also removes from the family the final authority over the incapacitated party’s family members and shifts it to the guardianship judge.

2. Avoids the necessity of a guardianship or conservatorship.

Someone who does not have a comprehensive durable power of attorney at the time they become incapacitated would have no alternative than to have someone else petition the court to appoint a guardian or conservator. The court will choose who is appointed to manage the financial and/or health affairs of the incapacitated person, and the court will continue to monitor the situation as long as the incapacitated person is alive. While not only a costly process, another detriment is the fact that the incapacitated person has no input on who will be appointed to serve.



3. Provides family members a good opportunity to discuss wishes and desires.

durable power of attorney for childThere is much thought and consideration that goes into the creation of a comprehensive durable power of attorney. One of the most important decisions is who will serve as the agent. When a parent or loved one makes the decision to sign a power of attorney, it is a good opportunity for the parent to discuss wishes and expectations with the family and, in particular, the person named as agent in the power of attorney.



4. The more comprehensive the durable power of attorney, the better.

As people age, their needs change and their power of attorney should reflect that. Seniors have concerns about long-term care, applying for government benefits to pay for care, as well as choosing the proper care providers. Without allowing, the agent to perform these tasks and more, precious time and money may be wasted.

5. Prevents questions about principal’s intent.

Many of us have read about court battles over a person’s intent once that person has become incapacitated. A well-drafted durable power of attorney, along with other health care directives, can eliminate the need for family members to argue or disagree over a loved one’s wishes. Once written down, this document is excellent evidence of their intent and is difficult to dispute.


6. Prevents delays in asset protection planning.

A comprehensive durable power of attorney should include all of the powers required to do effective asset protection planning in the event of incapacity. If the power of attorney does not include a specific power, it can greatly dampen the agent’s ability to complete the planning and could result in thousands of dollars lost. While some powers of attorney seem long, it is necessary to include all of the powers necessary to carry out proper planning.  Importantly, if the durable power of attorney does not have certain specific provisions involving “special” powers, as defined by the Florida durable power of attorney statute, it may result in the denial of Medicaid benefits to pay for long term care.  Thus it is critical that the durable power of attorney, especially in Florida, be prepared in accordance with the Florida power of attorney statute.

7. Protects the agent from claims of financial abuse.

Comprehensive durable powers of attorney often allow the agent to make substantial gifts to self or others in order to carry out asset protection planning objectives. Without the power of attorney authorizing this, the agent (often a family member) could be at risk for financial abuse allegations.  In Florida, without specifically providing in the durable power of attorney for the special power of gifting to the agent, or other family members, the agent will not have the authority to engage in gifting – with potential tax and long term care consequences.

8. Allows agents to talk to other agencies.

An agent under a power of attorney is often in the position of trying to reconcile bank charges, make arrangements for health care, engage professionals for services to be provided to the principal, and much more. Without a comprehensive durable power of attorney giving authority to the agent, many companies will refuse to disclose any information or provide services to the incapacitated person. This can result in a great deal of frustration on the part of the family, as well as lost time and money – and the specter of establishing a court supervised guardianship.

9. Allows an agent to perform planning and transactions to make the principal eligible for public benefits.

One could argue that transferring assets from the principal to others in order to make the principal eligible for public benefits–Medicaid and/or non-service-connected Veterans Administration benefits–is not in the best interests of the principal, but rather in the best interests of the transferees. In fact, one reason that a comprehensive durable power of attorney is essential in elder law is that a Judge may not be willing to authorize a guardian to protect assets for others while enhancing the ward/protected person’s eligibility for public benefits. However, that may have been the wish of the incapacitated person and one that would remain unfulfilled if a durable power of attorney were not in place.



10. Provides immediate access to critical assets.

A well-crafted durable power of attorney includes provisions that allow the agent to access critical assets, such as the principal’s digital assets or safety deposit box, to continue to pay bills, access funds, etc. in a timely manner. Absent these provisions, court approval will be required before anyone can access these assets. Digital assets are also important because older powers of attorney did not address digital assets, yet more and more individuals have digital accounts.  The statutes and case law surrounding durable powers of attorney is ever changing.  Consequently, durable powers of attorney should be reviewed regularly to determine whether changes in the law might adversely affect the usability of the power of attorney.

11. Provides peace of mind for everyone involved.

Taking the time to sign a power of attorney lessens the burden on family members who would otherwise have to go to court to get authority for performing basic tasks, like writing a check or arranging for home health services. Knowing this has been taken care of in advance is of great comfort to families and loved ones.

Conclusion

Florida Durable Power of Attorney Helps the ElderlyThis discussion of the Reasons Why Everyone Needs a Comprehensive Power of Attorney could be expanded by many more. Which benefits are most important depends on the situation of the principal and their loved ones. This is why a comprehensive durable power of attorney is so essential: Nobody can predict exactly which powers will be needed in the future. The planning goal is to have a power of attorney in place that empowers a succession of trustworthy agents to do whatever needs to be done in the future. Please call us if we can be of assistance in any way or if you have any questions about durable powers of attorney.  You can obtain a durable power of attorney that contains the basic requirements for compliance online through this website by going to this page.  If you would like to develop a durable power of attorney that is specifically tailored for your needs, and the needs of your family, call and schedule a consultation, either office, telephonically or through email, and we’ll help you get one that fits your specific needs.

To comply with the U.S. Treasury regulations, we must inform you that (i) any U.S. federal tax advice contained in this newsletter was not intended or written to be used, and cannot be used, by any person for the purpose of avoiding U.S. federal tax penalties that may be imposed on such person and (ii) each taxpayer should seek advice from their tax advisor based on the taxpayer’s particular circumstances.