Q. WHAT IS DISABILITY PLANNING?
A. With improved medical technology comes the possibility that at some time in the future we might need long term care. Disability planning can include: giving thought to how to pay for long term care (such as private pay, Medicaid or long term care insurance), the execution of advance directives such as a Health Care Proxy or Living Will to assure that health care wishes will be respected, and a plan to provide for someone to make and implement financial decisions upon incapacity. Once an individual requires long term care and wishes to apply for the Medicaid program to pay for the long term care, it may be necessary to engage in significant planning to reach that objective and be ready to apply for the Medicaid benefits. The preparation of the Medicaid application usually requires detailed knowledge of the process and the eligibility rules to achieve the best results.
Q. WHAT CAN I EXPECT THE COST OF LONG TERM CARE TO BE?
A. Nursing homes in the metropolitan area range from $90,000 to well over $130,000, per year. Full time or live-in home care can cost even more. This does not include the cost of maintaining the family home while the ill person is in the nursing home or the financial support required for a spouse who remains at home.
Q. WILL I BE ABLE TO RELY ON MEDICARE TO PAY FOR LONG TERM CARE COSTS?
A. No. Medicare pays for long term care only in very limited circumstances for a short period of time.
Q. WHAT ABOUT LONG TERM CARE INSURANCE?
A. Long term care insurance can be purchased to cover care at home or care in a nursing home and should be considered by those who can afford it and who qualify medically. There are a number of different types of policies offered to the consumer with a choice of benefits. In choosing a policy, an individual should seek coverage which includes both nursing home and home care, inflation protection, guaranteed renewability and reliability of coverage. Also very important is an understanding of what events or physical conditions will trigger coverage. You might want to confer with an elder law attorney who can help you to choose the best policy for you.
Q. WILL MEDICAID PAY FOR MY LONG TERM CARE?
A. In order to have Medicaid pay your long term care costs, you must meet certain eligibility standards regarding resources and income. With careful planning, you may become eligible for Medicaid without spending down all assets. This is a complicated topic which requires an individualized consultation with an elder law attorney.
Q. SUPPOSE I GET SICK. HOW CAN I BE SURE MY HEALTH CARE WISHES WILL BE RESPECTED?
A. You can execute a health care proxy, a document which appoints a health care agent chosen by you to make health care decisions for you according to your wishes. This document is governed by the New York State Health Care Proxy law. The instrument becomes effective only in the event that you become incapacitated and unable to make your own medical decisions. A health care agent has the power to make medical decisions for you, such as which doctor will treat you, where you will receive treatment and what types of treatment you will receive. The heath care agent may also have the authority to make end of life decisions for you based on your known wishes.
Q. WHAT IS A LIVING WILL?
A. A living will is an advance directive in which you write out specific wishes in advance of your inability to make medical decisions. In the document, you try to anticipate future medical circumstances and set forth what medical treatments you would wish administered or withdrawn under those circumstances.
Q. WHAT IS A DURABLE POWER OF ATTORNEY?
A. A power of attorney allows an individual (the principal) to designate another person (the attorney-in-fact or agent) to act on behalf of the principal in specified financial matters. A durable power of attorney allows the agent to continue to act for the principal after the principal has become incapacitated. All powers of attorney end on the death of the principal. It is often helpful to customize the power of attorney for estate planning or Medicaid planning. This customization requires thought as to your individual and unique circumstances.
Q. ARE THERE ANY ALTERNATIVES TO A POWER OF ATTORNEY TO PROVIDE SUBSTITUTE FINANCIAL MANAGEMENT?
A. A revocable trust may be used for financial management. A revocable trust gives the trustees legal title to the assets held by the trust. The trustees can make all decisions regarding assets held by the trust for the benefit of the creator of the trust. In most cases a power of attorney should supplement the powers of the Trustee where appropriate.
Q. SUPPOSE I DO NOT EXECUTE A DURABLE POWER OF ATTORNEY OR A REVOCABLE TRUST AND I BECOME INCAPACITATED. WHAT HAPPENS THEN?
A. If you become incapacitated and have no plan in place for management of your finances, your family or some other concerned person can make an application to a court to have a guardian appointed for you. This is called a guardianship proceeding. The guardianship proceeding can be expensive and take much time to accomplish. In addition, your finances and personal life become part of the public court record and court determinations may not be what you would have wanted. Guardianships however, are sometimes necessary to accomplish estate and disability planning when people fail to do effective planning. When needed, the court can appoint someone to access an incapacitated person’s assets and take charge of property management and personal needs of the incapacitated person.
Q. I JUST READ IN THE PAPER THAT THE LAW MAY CHANGE.
A. Laws regulations and policies change and can affect the intended implementation of your plans. It is for this reason you should update your estate and disability planning periodically.
Q. WHAT DO I DO NOW?
A. Talk to your family, then make an appointment at Makofsky & Associates, P.C. to discuss your own unique concerns with us. Together we will craft a solution that you feel comfortable with.