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By Rick Law, Senior Advocate and Estate Planning Attorney at the Estate Planning Center at Law Elder Law in West Suburban Aurora, IL. Just off of the I-88 tollway.
When an individual is in need of long-term healthcare, people often turn to their own assets or savings to pay for such care.
Unfortunately, due to the high cost of care, it won’t take long for assets to be spent down and for funds that were originally earmarked for retirement savings to quickly disappear.
If not properly planned for, the need for long-term healthcare over a period of years can confront a family with three choices of means to pay for it. These choices include:
- The family can provide the necessary care informally (if they are able). However, doing so can come with serious costs to not just finances, but also to emotional and physical health.
- They can pay for care from an income stream. This, however, can come at a cost to both lifestyle and ability to meet continuing financial commitments – especially if there is a healthy spouse still responsible for regular household and other living expenses at home.
- They can pay for it with investments. If the illness or need for care lasts long enough, there could be a need to liquidate assets, potentially creating tax liabilities and jeopardizing the financial viability of the surviving spouse as well as children who may be depending upon an inheritance.
By Rick Law of Law Elder Law. Senior Advocates, Estate Planning, and Elder Law attorneys, in Aurora, Illinois.
Those seniors who do need long-term care can face enormous expenses, unless this is properly planned for. And the cost of receiving care, whether that care takes place in a facility or at home, continues to increase each year.
Overall, the nationwide average daily cost for a private room in a skilled nursing facility in 2010 was $229 per day, with the average daily cost of a semi-private room at $205.
This equates to nearly $75,000 per year.
But the costs don’t stop at that $75,000. For example, when considering a married couple, if one spouse needs care and the other remains at home, the food, shelter, and utility costs don’t stop for the spouse living at home. After all, if only one spouse is living at home, the grocery bill might go down a bit – but almost all the other expenses stay the same.
Therefore, this exorbitant cost of long-term care is tacked on to expenses that the couple already has. For a couple living on social security, a modest income, and their savings, those costs can be staggering.
Even more modest forms of care can take a huge chunk of portfolio assets. The national average monthly base rate for an assisted care living facility in 2010 was nearly $3,300 – equaling an annual rate of almost $40,000.
And even the cost of home healthcare can be daunting. In 2010, the average hourly rate for a home health aide was $21. Depending on how many hours per week they are needed, these costs can add up as well.
The good news is, there are often things that a qualified Elder Law attorney can do to help your hard-earned dollars stretch farther. Often, benefits can help pay for care in a nursing home – or even right at home. Some of these benefits are hidden from the lay person. Contact someone who works in these areas every day to see what might be available to you.
Every person’s situation is different – that’s why you may need a qualified attorney to help you figure out what steps are best for your family to take.
If you’re ready to start getting your estate in order and secure your assets for the “worst-case” scenario, please give our office a call at 800-310-3100. Your first consultation is absolutely free. We’ll let you know what steps you need to take, right now, to protect yourself and your family. Call now.
Sincerely,
Rick L. Law, Attorney, Estate Planner for Retirees.
Rick was named the #1 Illinois elder law estate planning attorney by Leading Lawyer Magazine. He has been quoted in the Wall Street Journal, AARP Magazine, TheStreet.com, and numerous newspapers and articles. Rick is the lead attorney for Law Elder Law, LLP, focusing in Estate Planning, Guardianship, and Nursing Home Solutions. His goal is to give retirees an informed edge when it comes to dealing with an uncertain future. Get flexible retirement strategies that work during good times and bad, plus information on how you can save your home and assets from being used to pay for long term care.
By Attorney Rick Law of the Estate Planning Center at Law Elder Law in Western Chicagoland.
Recent findings in a survey done by the Society of Actuaries (SOA) found that almost 63 percent of older Americans reported that they are not confident that they can save enough to handle the healthcare costs in retirement. In fact, nearly two-thirds of those who were surveyed stated that an annual increase in healthcare costs of only 1 percent to 5 percent could be manageable.
However, findings from the U.S. Department of Health and Human Services found in October 2010, that healthcare costs are actually expected to increase, on average, by 6.3 percent annually until the year 2019. And that could make healthcare costs even more difficult for senior Americans – enough to affect their ability to maintain their current standard of living in retirement.
In addition to that, seniors received no cost of living increases in their Social Security checks in 2010 or 2011, even though many costs are still rising – especially costs that can affect seniors.
Healthcare, nursing home, and assisted living costs are just a few of these expenses. Others include daily necessities like food and utility bills, which are actually rising faster than the moderate rate of general inflation. This could put many seniors in a financial bind.
Topping things off are those seniors who have stock accounts, IRAs and 401(k)s who have seen their income drop due to market losses – some for over a decade now. Seniors who depend on interest payments from their savings are suffering from historically low interest rates.
There’s no denying that seniors’ purchasing power will decline if they are living on a fixed income – especially in light of the fact that their healthcare costs will rise, and even more so if the need for long-term care arises. On average, once an individual reaches the age of 65, their chances of needing long-term care at some point are nearly one in two, with the average length of care being two and a half to three years.
If an individual be diagnosed with certain conditions, there is a good chance of an even longer need for care. For example, on average, an individual with Alzheimer’s disease could need long-term care for eight years. At an average cost of over $70,000 a year – and rising – it doesn’t take long to see that healthcare costs could wipe out even a large investment portfolio in a very short amount of time.
If you’re ready to start getting your estate in order and secure your assets for the “worst-case” scenario, please give our office a call at 800-310-3100. Your first consultation is absolutely free. We’ll let you know what steps you need to take, right now, to protect yourself and your family. Call now.
Sincerely,
Rick L. Law, Attorney, Estate Planner for Retirees.
Rick was named the #1 Illinois elder law estate planning attorney by Leading Lawyer Magazine. He has been quoted in the Wall Street Journal, AARP Magazine, TheStreet.com, and numerous newspapers and articles. Rick is the lead attorney for Law Elder Law, LLP, focusing in Estate Planning, Guardianship, and Nursing Home Solutions. His goal is to give retirees an informed edge when it comes to dealing with an uncertain future. Get flexible retirement strategies that work during good times and bad, plus information on how you can save your home and assets from being used to pay for long term care.
By Rick Law of Law Elder Law. Serving Seniors, Boomers, and Their Families in West Suburban Aurora, IL Just off the I-88 tollway.
The “Elder Care Journey” is a continuum of possible care needs that get more intense as the journey progresses. Typically, the journey progresses as follows:
- Healthy, vigorous senior – Most of today’s seniors are active, much more so than in years gone by. Several decades ago, you were not apt to see seniors playing tennis, running in races or skydiving! But with today’s medical technology and more resources for exercise for health-conscious seniors, more people in their sixties, seventies and even eighties are living full and active lifestyles… at least for a while.
- Medications and acute health problems – At some point, it is likely that even a healthy and vigorous senior will begin to experience some type of health issues. These issues may start small, with arthritis or high blood pressure. But over time, most seniors will begin to exhibit more serious signs of physical aging and the onset of more serious issues, possibly resulting in hospitalization to recover from injuries or for the purpose of various surgeries. It is at this stage in the journey that these issues – and the corresponding medications that are prescribed – will most likely be covered from a cost standpoint either by Medicare (which covers acute care) or private insurance. Although the senior may be responsible for paying an insurance deductible, these costs are often capped at an annual rate, so the senior can plan and anticipate their healthcare financial responsibilities. In addition, those who are covered by Medicare may also have a Medicare supplemental insurance policy that covers many of the copayments and deductibles that Medicare does not cover.
- Declining senior with memory or mobility issues – As the senior progresses on the journey, memory and/ or mobility will begin to decline. Regardless of how active or healthy one was in the past, at some point the body and the mind will begin to slow down. These issues may start small, such as frequent forgetfulness or walking at a slower pace, until eventually the senior may need some type of in-home assistance to help with basic daily needs.
- In-home assistance – When a senior is unable to perform basic daily living activities – either physically or because they cognitively are unable to remember to do so – then some form of in-home care is needed. This could entail hiring a homemaker aide to help with household chores or bill paying, or more extensive assistance might be needed on a more regular basis. Regardless of the need, at an average cost of $17 to $22 per hour (eight hours per day x 365 days per year = $49,000 to $64,000 per year), the expenses can begin to add up. It is now that the senior and their family may begin to realize that regular health insurance, as well as Medicare and Medicaid, are not constructed to pay for these types of care costs. In fact, it is often only personal assets or long-term care insurance that will cover these types of expenses. And, unless the senior is suffering from a very serious condition, the situation could go on for years.
- Assisted living facility – A time comes when the senior is unable – or unsafe – to live at home without assistance throughout the day and night. At this time, even though the senior may not need medical or skilled nursing care, the family will need to consider an assisted living facility. Here the senior will still maintain a great deal of independence, yet will have access to care and assistance whenever needed. Here again, these costs are not covered by Medicare or regular health insurance policies. Payment for this type of care requires paying out-of-pocket or using long-term care insurance. (In Illinois, we do have “supportive living facilities” that take Medicaid, but you must meet the financial requirements and pass a screening that shows you require a certain level of care. All “assisted” living facilities are not “supportive” living facilities; and therefore, Medicaid is not an option in the traditional independent or assisted living facility.) With an average monthly cost of $3,000 to $6,000 and an average length of need of two and a half to three years, the annual cost for an assisted living facility is $36,000 to $72,000 per year. Here again, the potential to quickly deplete personal assets is high without some form of pre-planning for this need.
- The fragile senior at a nursing home resident – Once the senior’s health deteriorates to a certain level, they will have no choice but to enter a nursing home where they can receive around-the-clock skilled care. Skilled nursing facilities are equipped to handle most conditions, and many even have a special section for patients with Alzheimer’s disease. The average monthly cost of care in a skilled nursing home facility is $4,000 to $9,000, with an average length of stay two to five years, with the only real option for payment coverage being out-of-pocket, Medicaid – but only if the senior is considered to be at the state’s poverty level – or a long-term care insurance policy.
- Death – When the senior has passed away, a whole host of other issues will come into play. This can include survivor care, if the senior was married and is leaving behind a spouse, as well as estate administration. Pre-planning in this area is also essential, as the senior’s estate could be subject to hefty estate taxes, and his/her heirs could end up with nothing to show for a lifetime of work and saving by the senior.
By Rick Law, Senior Partner, Law Elder Law LLP
The distinctive benefit of elder law estate planning compared with traditional death-tax-centered estate planning is this: elder law estate planning deals with the biggest threat to seniors’ wealth and healthcare while they are still alive.
This threat is staggeringly expensive, unreimbursed medical expenses. Every day at our firm we are seeing the unraveling of more and more governmental-benefit medical coverage for seniors—not just nursing home Medicaid, but also Medicare. Every month, the clients and their families who come to see us keep us quite aware of the sheer, raw reality of this ever-widening gap between medical costs and payment of medical benefits.
At the same time, attorneys are our number one referral source. We are very grateful that lawyers refer their clients, friends, and family members who are struggling with Alzheimer’s disease, Parkinson’s disease, and other long-term care diagnoses to us for help.
As soon as you learn that a senior who you care about has received a long-term care diagnosis, it is time to call us for your free initial consultation. The sooner that families come to see us, the sooner we can get to work helping them find better solutions. These days, many long-term diseases have multiple-year trajectories, and the sooner we see clients, the better we can do for them in the areas of asset protection and healthcare. Unfortunately, many people continue to be in denial of their diagnoses and don’t call us even when there is “smoke in the kitchen.”
We constantly try to remind seniors that the State of Illinois is becoming less and less reliable for long-term care coverage. Ever since 2012 the State of Illinois has created obstacles and barriers that stand between seniors and qualification for nursing home Medicaid benefits. In fact, without professional elder law guidance, many frugal, hard-working seniors wind up being reduced to having a mere $30 per month as their sole spending money for personal needs; all of their monthly income above $30 is allocated to nursing home care. On top of that, by the time an unmarried or widowed senior qualifies for nursing home Medicaid, he or she will need to have depleted all assets down to no more than $2,000. Two thousand dollars doesn’t go very far when that senior needs to replace lost hearing aids or get new dentures.
There is no one alive who wants to wind up old, frail, out of money, and out of options. Elder law estate planning is designed to help families to work together to preserve dignity and options for their elderly loved ones.
So when the specter of long-term illness raises its ugly head towards seniors you care about, call us at 800-310-3100 or 630-585-5200 to find out what we might be able to do for them. We welcome your questions!
Sincerely,
Rick L. Law, Attorney, Estate Planner for Retirees.
Rick was named the #1 Illinois elder law estate planning attorney for the past 3 years in a row by Leading Lawyer Magazine. He is co-author of “Alzheimer’s and The Law”, published by the American Bar Association, and has been quoted in the Wall Street Journal, AARP Magazine, TheStreet.com, and numerous newspapers and articles. Rick is the lead attorney for Law Elder Law, LLP, focusing in Estate Planning, Guardianship, and Nursing Home Solutions. His goal is to give retirees an informed edge when it comes to dealing with an uncertain future. Get flexible retirement strategies that work during good times and bad, plus information on how you can save your home and assets from being used to pay for long term care.
By Rick L. Law, lead attorney, Law Elder Law estate planners.
Law Elder Law, LLP is dedicated to serving seniors and those who love them in the Chicagoland area. We are your trustworthy guides for the elder care journey. We deal daily with the complicated maze of Medicaid, estate planning, taxation, long term care planning, special needs trusts, and veteran’s benefits for their clients.
There are many outstanding professionals on our team at Law Elder Law. I, Rick Law, am the lead attorney and co-author of “Alzheimer’s and the Law”, published by the American Bar Association in 2013.
My daughter Diana Law, Esq., litigation partner, plays an integral role within the firm by focusing on guardianships and probate advocacy. She has been recognized for excellence at both the county and state levels. Diana also serves as the Kane County Public Guardian and Administrator.
Partner Zach Hesselbaum, J.D., L.L.M. in Taxation, leads the estate planning group. Team members Gina Salamone, Faviola Carmona, and Brandon Ayers are associates who are highly respected practitioners.
The Law Elder Law team strives to provide not only for the legal needs of clients, but also to address their pain, confusion, and the sense of loss caused by the burden of long term care. Law Elder Law embraces hurting clients and provides wise and experienced counsel. Clients need guidance through difficult family situations as well as help in understanding complicated estate planning and long term care issues. The legal team endeavors to provide clarity and direction in navigating the byzantine Medicaid, veteran’s benefits, and long term care health systems. We also strive to make sure that clients are aware of the many community resources that are available to them.
At Law Elder Law, team members help clients to age in place with dignity, safety, and peace of mind. We know our clients hope is to never be out of money or quality health care options, and we work to help our clients achieve that goal. There are many landmines along the elder care journey. Seniors need passionate advocates to achieve compassionate outcomes.
Too many families needlessly lose everything they have. Don’t let that be you. If you need help building a fortress around your estate to protect it from creditors, predators, and the cost of chronic disease, give our office a call at 800-310-3100. Your first consultation is absolutely free. We’ll let you know what steps you need to take, right now, to protect yourself and your family. Call now, because when you’re out of money, you’re out of options!
Sincerely,
Rick L. Law, Attorney, Estate Planner for Retirees.
Rick was named the #1 Illinois elder law estate planning attorney for the past 3 years in a row by Leading Lawyer Magazine. He has been quoted in the Wall Street Journal, AARP Magazine, TheStreet.com, and numerous newspapers and articles. Rick is the lead attorney for Law Elder Law, LLP, focusing in Estate Planning, Guardianship, and Nursing Home Solutions. His goal is to give retirees an informed edge when it comes to dealing with an uncertain future. Get flexible retirement strategies that work during good times and bad, plus information on how you can save your home and assets from being used to pay for long term care.
By Rick Law of the Estate Planning Center at Law Elder Law. Conveniently located Just west of the Chicago Premium Outlet Mall.
Law Elder Law is pleased to announce our new partner, Zach Hesselbaum, J.D., LL.M. Taxation.
Zach’s favorite things, mentioned here according to their priority, include spending time with his wife, Kelly, who works as a school social worker in Bloomingdale, Illinois. Together, Kelly and Zach have an adorable toddler named Rockne.
Zach is also a sports enthusiast, and specifically a fan of the Chicago White Sox and Dallas Cowboys. In addition, he loves getting to know people and conversing with them. He says, “I love talking to people and getting to know them! I like to be a ‘connector’ — I search out ways to help people through connecting them to others I have met.” The only thing that really bugs Zach is losing, because he is a naturally competitive person.
Zach’s other pastimes include attending sports events of any kind, collecting sports memorabilia, and spending time with friends. Zach and Kelly recently moved to Wheaton, Illinois from Chicago. While they often still go “downtown,” Zach and Kelly are getting to know the rest of the Chicago Metro area as well.
Zach is a person of integrity, perseverance, and goodwill. He has been nurtured by three very important people: his mother Judi, his stepfather Phil, and his grandfather Jim.
He says, “My mother, Judi, my life professor, has instilled in me an incredible work ethic with a drive towards helping people. Since a young age I can remember being taught that hard work will pay off if you are dedicated. Yet this was always conditioned by the warning that you cannot be selfish — you must consider others as you try to reach your goals. She taught this not only through practicing what she preached while working countless hours at Copley Hospital in Aurora, aiding her patients, but additionally, through creating an environment for me that would create success without having things handed to me. It amazes me to talk with my mom now and have her point out little things she did to shape me when I was younger that have become habit today. This is particularly true when we discuss my life goals and the drive I have to be successful in helping others. The best part about all of this is she continually expressed her love and desire for me to succeed while teaching me the correct way to do things.
A lesson I have learned from my stepfather, Phil, that has paid off greatly for me, is that you can be a tremendous leader without losing your gentle nature. Through watching the way he deals with people, I have gained a great deal of “social intelligence.” I enjoy being in situations where I am the leader, because I like to rationally sort out situations and reach the desired goal without disregarding others’ feelings along the way. I believe this talent has been honed by watching my stepfather deal with tense situations in his profession as an oncologist — with a kind, gentle, yet decisive hand that he uses to create success in situations that look extremely bleak.
My grandfather, James, has done a great deal to shape who I am. Since a young age my grandfather wanted me to be his protégé. I recall his teaching me the lessons he learned as a World War II pilot, and how he worked through his education on the G.I. Bill, and how he climbed the corporate ladder at Caterpillar to be a highly successful vice president. Even though he has now been diagnosed with Alzheimer’s Disease, to this day I can hear his life lessons in my mind. When I find myself in a tough situation, I remember his words of wisdom, and they always head me in the right direction.
Lastly, I have a great group of friends. I am constantly amazed by how loyal we have been to each other, staying in contact since we were so young. We are extremely dedicated to one another, and this is something I am constantly learning from as well.”
Zach is a highly respected member of the Estate Planning Center at Law Elder Law and especially appreciated by all for his servant’s heart. He always seems to be looking for ways to help those around him.
Education:
- DePaul University College of Law: Masters of Law in Taxation candidate 2011
- Valparaiso University School of Law: Juris Doctor
- Valparaiso University: Bachelor of Arts, cum laude — double majoring in Political Science and Philosophy
- Admitted to practice in the State of Illinois
- Professional Affiliations
- Kane County Bar Association
- DuPage County Bar Association
- Chicago Bar Association
- Past presenter to the National Academy of Elder Law Attorneys (NAELA) on veterans benefits
By Rick Law, Senior Advocate and Estate Planning Attorney of Law Elder Law in Aurora, IL.
A family friend once told me about the trouble he was having with his mother-in-law’s funeral and subsequent burial expenses. Though the couple had long ago purchased a burial plot, and the husband had been laid to rest there years earlier, the mother-in-law had been personally and financially drained by the whole process.
When a family experiences the loss of a loved one, the worst thing that can happen is to be burdened by unforeseen costs and red tape that went unprepared for. I know that most of my clients want their family to have the easiest transition possible when they pass away, and remove any additional burdens that they possibly can from their surviving spouse and/or children.
The couple I mentioned above had been a typical, frugal couple, and had planned accordingly.
Very often, people have traditional life insurance policies that they are planning to use to provide funds for their funeral.
Some clients will even tell us that they have a small savings account that they have set aside for funeral expenses. So what happens if an unforeseen illness causes almost all of your savings to be spent on your care?
At least 75% of seniors living today will spend at least some time in a nursing home. At $5,000-$9,000 per month, how long would your savings last?
Unfortunately, Medicaid does not allow for either a savings or traditional life insurance policies, unless they’re valued at no more than $1,500. The problem with the traditional life insurance is that it has “cash value” and therefore, Medicaid would require that it be cashed in and spent on care.
You can, however, have a prepaid funeral plan at a local funeral home or a prepaid burial trust that funded by a life insurance policy. The prepaid funeral policy goes to the funeral home at the time of the person’s death and is used to cover all final expenses. If a client has a life insurance policy with a large cash value, this can be converted to a burial trust – and the money is now protected for final expenses.
Too many families needlessly lose everything they have. Don’t let that be you. If you need help paying the overwhelming cost of long term care, give our office a call at 800-310-3100. Your first consultation is absolutely free. We’ll let you know what steps you need to take, right now, to protect yourself and your family. Call now, because when you’re out of money, you’re out of options!
Sincerely,
Rick L. Law, Attorney, Estate Planner for Retirees
By Rick Law, Estate Planning Attorney for Seniors and Boomers in Chicagoland.
One common mistake we see is when the home of the senior is transferred to an adult child or children. This occurs sometimes when the parent suddenly becomes ill and the children panic. They transfer the home in an attempt to protect the home from the high cost of healthcare. We hear statements like, “Dad didn’t want the nursing home to take the house.”
This results in several problems. First, the senior parent is no longer the homeowner, and therefore this may affect the real estate taxes. The senior can lose their senior exemption, homestead exemption, and even a senior freeze if they have one.
And, the transfer of the home is a huge problem if the family needs to file for Medicaid assistance for Mom or Dad’s long-term care. If the home is worth $150,000, the senior can be ineligible for Medicaid assistance for nearly 3 years.
Finally, if the home is sold, the adult child could be facing capital gains tax.
Even though he/she received the home as a “gift,” taxes will have to be paid on any amount over the price that the senior originally paid for the home. In many cases, we are looking at homes that the parent has owned for 50 years and paid about $15,000 for – and now it is worth 10 times that. The children would pay federal and state capital gains taxes on $135,000 in this scenario.
We generally have to “undo” what has been done in haste and without much forethought and little or no knowledge of Medicaid.
Too many families needlessly lose everything they have. Don’t let that be you. If you need help paying the overwhelming cost of long term care, give our office a call at 800-310-3100. Your first consultation is absolutely free. We’ll let you know what steps you need to take, right now, to protect yourself and your family. Call now, because when you’re out of money, you’re out of options!
Sincerely,
Rick L. Law, Attorney, Estate Planner for Retirees.
Rick was named the #1 Illinois elder law estate planning attorney for the past 3 years by Leading Lawyer Magazine. He has been quoted in the Wall Street Journal, AARP Magazine, TheStreet.com, and numerous newspapers and articles. Rick is the lead attorney for Law Elder Law, LLP, focusing in Estate Planning, Guardianship, and Nursing Home Solutions. His goal is to give retirees an informed edge when it comes to dealing with an uncertain future. Get flexible retirement strategies that work during good times and bad, plus information on how you can save your home and assets from being used to pay for long term care.