When you are planning ahead for the eventualities of aging, you should certainly understand some facts about long-term care. This is the type of care that you would receive in a nursing home or assisted living community.
If you work during your life and pay taxes, you will qualify for Medicare when you reach the age of 65. To become eligible you must gain 40 retirement credits throughout your working years. The maximum annual accrual is four credits per year.
Once you recognize the fact that you will be eligible for Medicare, you may breathe a sigh of relief. All of your needs will be met when you become a senior citizen, right?
Actually, this is not the case. Medicare will not pay for long-term care. This type of care is considered to be custodial care rather than medical or convalescent care. Medicare would pay for up to 100 days of convalescent care after surgery, but that’s the extent of it.
It is not easy to reach into your pocket to pay for long-term care. Our firm practices law in Los Angeles. According to a Genworth Financial study, the median annual cost for a private room in a nursing home in our area in 2015 was over $97,000. The median cost for a year in an assisted living community was around $45,600.
Some people who need assistance with their activities of daily living can receive help within their homes. Home health aides are expensive as well. In 2015, the median annual charge for a home health aide in L.A. was actually slightly higher than the cost for full-time residence in an assisted living community.
Elder law attorneys will educate clients about these expenses. They will also point out the fact that the majority of senior citizens will eventually need living assistance.
Though Medicare won’t pay for long-term care, Medi-Cal is a government health insurance program that is set up to assist with these costs. However, eligibility determinations for Medi-Cal are based on financial need. If your countable assets exceed program parameters, you cannot qualify. In our state, the countable asset limit for an individual is just $2000.
In spite of the stringent asset limits, a very significant percentage of the long-term care that people receive in California is paid for by the Medi-Cal program. Some people spend all of their resources paying for long-term care, and they can then qualify for Medi-Cal.
Others take a more measured approach. They anticipate the need for Medi-Cal coverage in the future, and they divest themselves of assets in advance of applying for the program. This is what Medi-Cal planning is all about.
It is possible to engage in a Medi-Cal spend down to keep a maximum store of assets in your family as you aim toward Medi-Cal eligibility in the future. Retirement planning attorneys understand Medi-Cal rules and regulations thoroughly. They advise clients who would like to gain Medi-Cal eligibility in the future without losing everything in the process.
Retirement planning attorneys also help clients prepare for incapacity. If you were to become unable to make your own decisions, interested parties could petition the court to appoint a guardian to act on your behalf.
You can prevent a guardianship proceeding and choose your own hand-picked decision-makers if you act in advance. This is typically done through the execution of legally binding devices called durable powers of attorney.
A living will is also something that should be part of your incapacity plan. With a living will you state your preferences regarding the utilization of life-sustaining measures.
Elder Financial Abuse
Elder financial abuse is another pressing elder law issue. Billions of dollars are lost each year due to instances of elder financial abuse. There are steps that can be taken to mitigate your exposure. Your elder law attorney can explain your options to you and make the appropriate recommendations.
Retirement Planning Consultation
In this blog post, we have looked at some of the eventualities that you may face after your active retirement years. These are important things to consider, but you can also enjoy the golden years that precede your twilight years if you are financially prepared.
We can help if you would like to create a retirement plan that leads to a comfortable and secure future.
To Schedule a Free Consultation
If you are interested in the possibility of working with our firm after learning these facts, please select our “Workshops” tab to RSVP for a free estate planning workshop. At that workshop you will be offered a free one-hour consultation with an attorney: https://collinslawgroup.comseminars/