Salt Lake City Estate Planning

Aging, Memory Loss, and Money

If your loved ones are getting up there in years, it makes sense to plan ahead for the possibility that one of them could become impaired in his or her thinking.  About half of all persons in the U.S. who reach 85 years of age develop Alzheimer’s Disease.  Because the risk is so high and people are living longer, everyone needs to accept that we could become less than capable of managing our own money in the future.

It is not always obvious, especially at first. Is your elderly loved one having “memory” problems? If yes, what should you do, especially when it comes to financial matters?

A recent article in Forbes considered these question and others. The article, titled “Is Your Aging Loved One "Losing It"? Five Strategies to Help You Prepare For Managing the Money,” also provides some practical pointers, to include:

1. Learn about the assets and financial responsibilities you and your loved one have.
2. Take time to get to know your loved one’s financial advisor, accountant, broker and banker.
3. Do not accept financial illiteracy.
4. Accept the potential responsibility you may have one day as a way of protecting yourself against fraud and financial abuse.
5. Check your legal documents and be sure that you have what is needed to take over financial management if that time comes.

Each of these points is important. However, I will add my own to the mix – don’t ignore the issue.

While it can be hard admitting that a loved one is “losing it” cognitively, matters are made worse when their financial matters crash and burn, too. If you already are at that point, then it may be wise to have a family meeting to coordinate your plan of action together.

Even closer to home, take a good look in the mirror. Do you have your own estate planning in place so your loved ones could take care of your financial matters? If not, now is the time to talk to a competent Estate Planning Attorney. 

Reference: Forbes (February 14, 013) “Is Your Aging Loved One "Losing It"? Five Strategies to Help You Prepare For Managing the Money”

Complications When Elderly Parents Get Remarried

“It gets really blurry. Who’s going to do what?” Grown children [of parents who remarry late in life] don’t have much history with these new spouses; they often feel less responsibility to intervene or help out, and stepparents may be unwilling to ask. Perhaps it’s unclear whether children or new spouses have decision-making authority.

Let’s face it – the modern family structure can get complicated. While “family” can make good material for divorce courts and sitcoms alike, it’s also becoming clear that there is a new family crisis brewing in elder care within blended families. This topic was taken up in a recent article in the New Old Age Blog titled “In Blended Families, Responsibility Blurs.”

When it’s just parents and just the kids born from those parents, caring for elderly parents can be difficult enough. Generally, most families assume that the adult children can work things out to take care of their elderly parents. In a blended family, however, and especially in one where the parents of those adult children have remarried late in life, the boundaries can get blurry. Moral decisions once clear become blurry.

With elderly parents in such situations, there oftentimes are changes in relationships for the worse that can lead to petty angers which further add to complications. Remember, every family requires ongoing communication and shared understandings to make a family run smoothly. Easier said than done. Nevertheless, you owe it to yourself and to your loved ones to come to that point.

The original article has so much more to say on this topic, with a first-hand account that is all too familiar to many. Here is an important takeaway: the coming generations of elderly persons are more likely to be in a blended family, so be prepared now for the challenges that may affect you and those you love.

Reference: The New York Times – The New Old Age Blog (February 5, 2013) “In Blended Families, Responsibility Blurs”

Elderly Parent Care Tax Credit

If you supported one or both of your parents financially last year, Uncle Sam may be willing to share the cost when you file your 2012 tax return.

It’s officially tax time, and if you have been caring for an elderly parent you may find that Uncle Sam can help with some of those costs through favorable tax treatment. Depending upon your circumstances, you may be able to claim your parent as a dependent, take a dependency care tax credit, deduct a portion of their medical expenses or get some combination of these tax breaks.

Forbes offers guidance on whether you might qualify in a recent article “How To Claim Tax Breaks For Supporting Your Parents." If you think you may qualify, consult an accountant or tax professional to maximize your tax savings.

Sadly, caregiving frequently also means managing end-of-life care ... and the attendant expenses. While it may be difficult to focus on financial matters during these stressful times, tax breaks can help extend available resources. Of course, the first step is to determine which expenses qualify and to what extent. Expenses that frequently apply to people with advanced illness include health insurance premiums not paid through work, deductibles, co-pays, medication, alternative care, medical supplies such as bandages, dental care, Medicare B premiums, lodging while traveling for care, and transportation costs. The IRS has a very detailed list of what is and isn’t deductible in Publication 502. You can refer to this publication for details, as well as to another excellent Forbes article, “Save Money On Taxes At The End Of Life -- How And Why It Matters.”

Again, be sure to consult your accountant or tax professional if you think you may have qualifying expenses. The tax savings could be significant, and could help ease an otherwise difficult burden.

References: Forbes (January 29, 2013) “How To Claim Tax Breaks For Supporting Your Parents”

Forbes (February 4, 2013) “Save Money On Taxes At The End Of Life -- How And Why It Matters”

DSM5 – Changing the Playing Field for Cognitive Diagnosis

When Dr. Frances refers to the DSM5 as “a guide, not a bible,” and urges skepticism about some of its diagnoses, he is advocating an approach that patients and families should probably bring to any medical decision.

Not all of the truly important medical developments come out of the laboratory, and in fact, many of the most noticeable shifts felt by doctors and patients alike spring from committee. For those of us with elderly loved ones, the committee with which you should become most familiar is the American Psychiatric Association and their upcoming best-seller, the DSM5. The book may usher in new ways of approaching elders and depression, and that may not be a good thing according to some.

The concern over the DSM5 has come to a slow boil. The conversation about DSM5 has begun seeping out from the academic literature and into the public square with articles like a recent piece in The New York Times titled “Time to Recognize Mild Cognitive Disorder?” 

The DSM5 will be the sequel to the Diagnostic and Statistical Manual of Mental Disorder IV (DSM-IV), the utterly necessary reference book and dust-gatherer of psychologists, doctors, insurance companies, bureaucrats, and lawyers alike. DSM-IV chronicles known and diagnosable psychological disorders. 

For seniors, the new disorder making the rounds is “mild cognitive disorder.” This diagnosis is an attempt to bring to psychiatry the same awareness to levels of cognitive senility that medical doctors know all too well and yet still understand too little. If the DSM5 is published as is, and becomes the go-to reference, then we’re likely to see many more elderly diagnosed into categories that have only just now been created. 

For families taking care of elderly loved ones, and those getting on in years themselves, it’s useful to understand the basis for any diagnosis made by their doctors. Regardless, the takeaway would be to get your legal ducks-in-a-row before a future diagnosis diminishes the legal capacity to make proper estate planning decisions.

Reference: The New York Times – The New Old Age Blog (January 25, 2013) “Time to Recognize Mild Cognitive Disorder?” 

Health Care Costs

It's no secret that the tab for health care in America is soaring. But did you know that what you pay for health care depends--heavily--on where you live?

A cup of coffee will cost you just a bit more or a bit less depending on where you get it. Interestingly, however, the cost isn’t necessarily dependent on how good the coffee tastes. No, when it comes to geography and what you pay for something, remember the three things that determine real estate prices:  location, location and location. And the effect of location on medical care and old-age expenses can be significant.

Planning for your old-age, or for the needs of an elderly loved one, is partly a test of geography in the health care economy. In fact, it’s more important to understand this fact of life now more than ever.

For some fresh analysis of this familiar topic, you might want to take a look at a recent Morningstar article titled “Health-Care Costs: Why Your Location Really Matters.” The article speaks to the “numbers” and to international comparisons. Regardless, the key for you to note is not the economics or even the politics behind this issue, but rather the very real circumstances you and your loved ones may be facing now or in the future.

So, how will you plan for the geography of medical expenses?

Reference: Morningstar (January 11, 2013) “Health-Care Costs: Why Your Location Really Matters”

When it’s No Longer Safe for an Elderly Loved One to Drive

Stopping a strong-minded elder can be tricky when the elder refuses to listen to family, can’t or won’t accept the concept of being too impaired to drive and is stubborn about the issue. If your loved one is in this situation, enlist the help of the doctor when you can, or law enforcement when possible.  You could be saving your loved one’s life or that of others.

Some life transitions are easier to accept, and some are momentous. Remember the freedom you felt as a teenager when you learned to drive? If yes, then you can appreciate how difficult it is for elderly loved ones to relinquish that sense of freedom.

For so many who have stepped in to oversee or care for an elderly loved one, the most dreaded transition that is so often fought is from driver to passenger: how do you make mom or dad give up the car?

For some guidance on handling this common, but difficult life transition, read a recent Forbes article titled “True Story: The Prominent Dad With Dementia Who Refused to Stop Driving.”

Reference: Forbes (January 7, 2013) “True Story: The Prominent Dad With Dementia Who Refused to Stop Driving”

Should You Retire with a Change of Latitude?

Planning to retire abroad? Ecuador is the top spot for North American retirees, according to InternationalLiving.com’s newly-released Annual Global Retirement Index 2013.

Is 2013 the year you start thinking about retirement, or even making serious plans? If yes, then you may be interested in the recently released list of top international retirement venues.

International Living has compiled its annual listing of the best places to retire abroad in 2013, as outlined in a recent article titled, “The World’s Top Retirement Havens in 2013.”

Maybe it’s been in the back of your mind for a while, and maybe it’s just never even occurred to you to look past the U.S borders, but either way it’s something worth considering. While retiring abroad is simply not the same as retiring in the States, that’s precisely one of its draws. On the other hand, the devil is always in the details and the differences can be significant.

For example, were you living abroad, would there be something or someone of importance to you that would be state-side? Similarly, is there something important to you and your family that couldn’t be taken abroad, or even owned from afar?

Retiring abroad can represent an opportunity to finally go back out into the world, make some new discoveries, and maybe have a few adventures. Either way, when it comes to retirement, now is the time to plan for your time later. As always, you should consult with an elder law attorney if you are considering retiring abroad. 

Reference: International Living (December 14, 2012) “The World’s Top Retirement Havens in 2013”

The Fiscal Cliff: A Slippery Slope for Your Health

If President Barack Obama and Congress cannot reach an agreement on the fiscal cliff, economic experts agree it would be devastating ... The part of the government that handles health-related programs -- Medicare, medical research, food safety inspectors -- all would be automatically cut starting January 2 if there is no agreement on the Budget Control Act.

The fiscal cliff not only affects your financial health, but it can also affect your physical health. Changes to Medicare and other health-related programs can impact these aspects of your wellbeing tremendously if decisions are not made in Congress soon.

This issue was recently taken up in a CNN article titled, “10 ways falling off the fiscal cliff could hurt your health.”

According to the Congressional Budget Office, if the fiscal cliff is not avoided, the scheduled reduction in Medicare’s payment rates for physicians will lower Medicare spending by $11 billion. This overall spending reduction results in a 2% cut in existing Medicare budgets. Consequently, these reductions will mean a decrease of available Medicare funds to help pay for essential healthcare needs.

In many instances, Medicare funds are used to pay for vital services like nursing home and hospice care, which are crucial to the wellbeing of our elderly population. Reduced Medicare funds mean reduced payments to health care providers which, in turn, may cause hospitals and care providers to stop accepting Medicare patients.

In preparation for the impending fiscal cliff, a consultation with an experienced elder law attorney can ensure that your access to healthcare is protected.

Reference: CNN (November 30, 2012) “10 ways falling off the fiscal cliff could hurt your health”

Congressional Budget Office (May 30, 2012) “Economic Effects of Reducing the Fiscal Restraint That Is Scheduled to Occur in 2013”

Extreme Home Makeover in Retirement

Richard Hayman, 67, and his wife Carolyn are shelling out $110,000 to complete a strategic part of their retirement plan. They aren’t purchasing a fixed annuity. They're making their 1978 Rockville, Maryland, tract house a place where they can age gracefully.

When we plan for retirement, we typically plan for financial stability, adequate health insurance, and safeguarding our estate. We may even plan for assisted living costs on down the road. But that doesn’t always mean planning for a move to an assisted living community. Some would rather stay in their own home. Enter a new retirement plan – home renovation.

As a recent article in Bloomberg highlights, assisted living costs are on the rise. Consequently, many individuals nearing retirement are opting to renovate their homes to avoid increased assisted-care costs. If you are heading towards retirement, it is vital to your financial health and the stability of your estate that you consider “Remodeling as Retirement Planning.” Substantially remodeling your home to further accommodate an aging body may cost a pretty-penny up front, but it may pale in comparison to the yearly cost of a nursing home.

According to a MetLife Mature Market Institute study, the US National Average for yearly nursing home costs is just over $75,000. Accordingly, a relatively simple $10,000 renovation to your home might provide you with extra years of independent living, and save you thousands in assisted living costs along the way.

Think remodeling your whole home could cost too much? Consider simple changes like removing area rugs to reduce the risk of tripping. Or even simply rearranging your kitchen can help you avoid falls due to grabbing items from hard-to-reach areas. Whether you are looking to do a complete renovation or basic changes, consult the aforementioned article for more renovation tips and tricks.

Reference: Bloomberg (November 29, 2012) “Remodeling as Retirement Planning”

Managing Care Arrangements for Elderly Loved Ones

When hospice services are brought into assisted living facilities for older residents with terminal illnesses, problems can arise … Good communication between families, hospice staff, assisted living staff and paid caregivers (if they’re part of the picture) can make all the difference and minimize the potential for conflict. How can you make sure this happens?

Finding the right late-in-life and, often more important, the right end-of-life care for an elderly loved one can be a something of a maze. It’s actually often made more difficult because so many care facilities promise overlapping care.

How do you untangle the red tape and understand what’s actually being offered when assisted-living facilities bring in hospice services? Answer: It takes some due diligence and a proactive approach.

Such mixed-care arrangements are increasingly common these days when end-of-life is recognized more as a gradient rather than a definable stage. For some help in navigating this topic, consider reading a recent article titled “Managing the Assisted Living vs. Hospice Dilemma” from The New York Times –The New Old Age Blog.

Essentially, this article confirms that you have to do some digging and open up communication channels with the facility and its caretakers. This can help you learn how they actually work and what to expect. Moreover, it’s important for you to ensure they fully understand what you and your family expect.

Reference: The New York Times – The New Old Age Blog (November 19, 2012) “Managing the Assisted Living vs. Hospice Dilemma”