Elder law is an intriguing highly specialized area of law that affects seniors, baby boomers, millennials, and everyone in between. It refers to a legal framework for dealing with issues related to growing up and growing older. The shift is away from one’s death and onto the Golden Years. The priority is preservation of your hard-earned assets while retaining government benefits eligibility in case you need them.
Elder law includes topics such as Medicaid Planning and Medicaid Eligibility Strategies, long term care planning, nursing home issues, Guardianship, Personal Services Contracts, and other retirement issues. Whether you are personally experiencing one of these issues or assisting an elderly family member in navigating their affairs, the earlier you get educated, the better. Below is a “hotlist” of elder care issues we see in our practice all the time. Read on to learn the 5 basics of Elder Law (including misconceptions) that everyone should know.
- Medicare and Social Security Will NOT Provide You with Everything You Need.
Many people do not plan for retirement or the possibility of incurring long-term care costs because they think that government programs will provide them with affordable health care and a comfortable retirement. Unfortunately, that is not the case.
The reality of health care is that Medicare does not pay for long-term care, such as a nursing home, which is something that many senior citizens will eventually need. Medicare or your Medicare supplement plan will pay for approximately 100 days stay in a nursing home and that’s it. What happens after the 100 days when you or your family realizes you need to remain in an assisted living facility or a nursing home?
The numbers for 2019 are staggering. Florida’s average cost of home care is $275 per day. Florida’s average cost of skilled nursing is $100,375 per year. Meanwhile the average Social Security retirement income is $1,461. You don’t have to be a math whiz to realize that your assets and any inheritance you planned to leave to your family can be eaten up by long term care.
Proactive Medicaid Planning may be a solution. It is a very useful tool for seniors who may be faced with the need for nursing home care. This type of sophisticated financial planning should only be done with an elder law attorney. We employ legal and ethical methods that will transfer your assets so that you may qualify for Medicaid later in life.
- Gifting Away Money or Adding Children onto Your Financial Accounts is a BAD Idea.
This is generally a bad idea for 2 mains reasons: 1.) you are setting yourself up to get denied for Medicaid and 2) you are adding your children’s present and possible future life problems onto your own finances.
First let’s tackle Medicaid. Giving your assets to your children “to hold for you” means you no longer have any control over this money. Additionally, if you give any money away within five years of needing to apply for Medicaid, there is a very harsh penalty that will be applied. Prior to filing your Medicaid application, these “gifts” will need to be corrected, paid back to you, or otherwise fully dealt with according to Medicaid eligibility guidelines.
Regarding adding your children onto bank accounts, title to real estate, and other assets, beware that you are exposing your finances to any problems, past present of future, that you children may incur. An example would be if your child has creditor issues or a car accident and is sued, because their name is on your money, your money could be at risk. Likewise, if your child goes through a divorce, whatever assets their name is on now becomes part of the divorce proceedings. It is rarely recommended to add anyone onto title of an asset unless they are the true owner.
- It Is Not Just About Dying – Elder Law vs. Estate Planning
Elder law isn’t necessarily the same thing as estate planning. Your estate is what you leave to your loved ones when you pass away. But what happens if you become mentally or physically incapacitated before then? Incapacity means that a person has a disabling medical condition that prevents them from managing their basic needs and financial affairs. Who will continue to pay your bills, file your income taxes, and make decisions about your medical treatment? Here is where a Durable Power of Attorney and Health Care Surrogate become “lifesaver” instruments.
The fact is everyone over the age of 18 needs to have:
- Durable Power of Attorney is a legal document that allows you to designate someone (the “agent”) to handle your financial and legal affairs in the event of your incapacity. You can recover in peace knowing that a trusted individual is keeping up with your financial responsibilities.
- Health Care Surrogate is a legal document that allows you to designate someone to make health care decisions on your behalf in the event of an illness or accident. This is crucial because it prevents disagreements within the family as to who should make these critical decisions. Such decisions include consenting to certain medical procedures, seeking a second opinion, obtaining medical records, or transferring you to a different medical facility. If you don’t prepare a Health Care Surrogate document, and you fall ill and cannot make your own medical decisions, then the healthcare facility will follow Florida law to determine who is responsible for your healthcare decisions.
- A Living Will allows you to state your wishes about your end-of-life medical care. This allows your health care surrogate (person you nominate to make medical decisions for you) to best carry out your health care wishes regarding life sustaining procedures. Living Wills include a set of legal instructions about the treatment you wish to receive if you are unable to make decisions for yourself. You can revoke or revise a valid Living Will at any time.
- “Buyer Beware” Most Definitely Applies Here.
That old Latin saying, “caveat emptor” or “buyer beware” certainly applies to elder law if you’re thinking of handling matters yourself with a little online assistance. You may cut attorney’s costs by filling out a Medicaid application yourself or using forms found on the internet, but you may get an unpleasant surprise when you don’t qualify, and your application gets denied.
Likewise for estate planning templates you can download or purchase online. If you attempt to create them yourself or with a generic, one-size-fits-all software, part or all of your Last Will and Testament, Trust, Durable Power of Attorney or Medical Power of Attorney might not be legally valid or won’t work as anticipated. This is mainly because laws vary from state to state as well as the legal terminology and you might not understand what the question is asking. You and your family could end up spending an exorbitant amount more (after the fact) to correct unnecessary mistakes that an experienced elder law attorney would have detected.
- Do Not Wait Until You are “Old” to Consult an Elder Law Attorney.
Another common misconception is that you can wait until you get older and sicker to address some of the key issues elder law attorneys help with. Unfortunately, no one has a crystal ball as to when they will become sick, have an accident, or pass away. If you don’t have plans in place before this happens, it could be too late for you to use tools to protect yourself and your family. There are many steps that you should take while you still have full capacity. This includes making an incapacity plan in case of a medical emergency. You also want to make a Medicaid plan long before you need medical care in a nursing home because Medicaid may be the only source of payment for nursing home services and you may be ineligible to qualify for Medicaid if you did not do advanced planning.
You are never too old to get prepared. If you are over 18 years of age and travel, own a home, a bank account, have children, take care of an aging parent, etc. then you need the services of an elder law attorney. Contact OC Estate & Elder Law at (954) 251-0332 or info@ocestatelawyers.com for a free consultation to be truly prepared for all the eventualities of aging. Our attorneys are fluent in English, Spanish and Russian.
