Elder Law and Long-Term Care Insurance
Elder Law Elements
Are you a mature American (i.e., age 65 or older), do you care about someone who is, or do you anticipate becoming a mature American yourself one day? If so, then, according to the U.S. Census Bureau, you are in good company. In 1960, there were nearly 17 million mature Americans. Today, there are some 40 million mature Americans.
Due to the graying of the Baby-Boom generation, we will witness that figure jump to 53 million in 2020, and to 70 million in 2030! As this mature population increases, so will the need for Elder Law services.
What is Elder Law?
Generally speaking, Elder Law can be defined as the holistic application of general legal principles to the specific emotional, logistical and financial needs of mature Americans. Many mature Americans are concerned with two fundamental threats to their dignity: (1) becoming incapacitated, and thereby losing control to the court system over their personal, health care and financial decision; and then (2) running out of money due to the catastrophic costs of long-term care, and ending up on welfare. Fortunately, these threats may be minimized, or even avoided, through properly coordinated legal and financial planning.
As the number of birthday candles increases on your birthday cake, so do the odds that you will become incapacitated due to an injury or illness. Whether incapacity strikes suddenly, as with an accident or acute illness, or gradually, as with Alzheimer’s, the consequences are the same. Either you will have appointed the back-up decision-makers of your own selection through proper legal plans or, by default, the court system must step in to appoint them for you ... under the ongoing supervision of the court. Note: This default approach will employ at least three lawyers and can be rather expensive and invasive of your privacy. Accordingly, consider this default the lawyer full-employment program.
According to commonly cited statistics, if you are single, odds are about 50 percent that you will need long-term care. If you are age 65 and married, odds are about 75 percent that you or your spouse will need long-term care. The average nursing home stay is 2.5 years.
Long-term care is expensive. Nationally speaking, a year in a nursing home is estimated to cost an average of $90,000. Is it any wonder that 50 percent of mature couples become impoverished within a year after either spouse enters a nursing home? The number jumps to 70 percent for widowed or single persons.
By the way, forget about Medicare paying for your chronic long-term care needs. Medicare only pays for acute nursing home care for up to 100 days, and even then your eligibility and payments are subject to very strict requirements. Remember, too, Medigap (i.e., Medicare Supplement) policies typically will not pay for your chronic long-term care needs either.
What about giving away your assets to your loved ones to qualify for Medicaid (i.e., welfare)? Legally speaking, any transfer of assets for less than fair market value (i.e., a gift) may subject you to a lengthy period of ineligibility under the complex and confusing web of Medicaid Regulations. And transferring assets can be hazardous for other reasons. Consider this: What would happen if your transfer of assets to loved ones rendered you ineligible for Medicaid assistance, AND then those loved ones subsequently lost the assets through squandering, divorces, lawsuits or bankruptcies? Not good.
The key to proper long-term care planning is to plan now rather than to react later. There are numerous legitimate strategies to preserve more of your assets, but only if do not procrastinate until it is too late.
One of the best strategies may be to insure your financial security through proper Long-Term Care Insurance. Again, don’t wait too late to apply, because your health actually purchases Long-Term Care Insurance, your money just pays the premiums.