Elder Law

What you need to know...

A benefit of our continuously evolving society with revolutionary medical and technological advancements is increased longevity.  Along with the increased longevity, however, we must plan for periods of incapacity and disability during which time we or our loved ones may need assistance with finances or making medical decisions due to diminished health or mental status.  The importance of planning for your later years is to ensure you are cared for in such circumstances, to preserve your retirement in the face of ever-increasing costs of long-term care, reducing the imposition of care responsibilities upon families or friends, or to put a plan in place if you do not have family or friends nearby to assist.

Often, planning for our later years involves multiple aspects of estate planning, including disability and special needs planning, which may involve the use of asset protection strategies.  The first step is always to review your existing estate plan, and to understand the importance of beneficiary designations, durable powers of attorney, medical directives, living wills, durable powers of attorney for healthcare, HIPAA releases, pay-on-death or transfer-on-death designations, lifetime gifts, charitable gifts, life insurance, long-term care insurance, and joint ownership of assets. It is important to remember that certain “non-probate transfers,” such as beneficiary designations, payable on death or transfer on death designations, and joint ownership of assets will result in a different plan of distribution than that designated in your will or trust.

It is important to know that if you become disabled or incapacitated and you have not instituted a comprehensive estate plan, others may not be able to assist you in managing your finances, making medical decisions, or authorizing medical treatment for you without petitioning a court of law requesting the appointment of a guardian and/or conservator; often an expensive, long, and burdensome process that is associated with heavily court-monitored fiduciary responsibilities.  A guardianship/conservatorship proceeding is an adversarial proceeding by which the court appoints a guardian ad litem for the individual who is alleged to be disabled or incapacitated, and the individuals who are seeking the guardianship/conservatorship, who are often loved ones, must testify (often in the presence of the individual needing assistance) and explain why their loved one is unable to manage his or her own affairs or is unable to take care of himself or herself.

Asset protection planning is often the next step to consider after reviewing your estate plan. Such planning should not be limited to the question of what happens to your assets when you pass away, but rather, it should encompass what happens to your assets if you live long enough such that your assets could be severely diminished.  It is important to review the different approaches to protecting your future with an attorney so that you may develop a plan that is best suited for you.  Different approaches to such planning include self-funding of long-term care needs, long-term care insurance, and qualification for needs-based governmental benefits such as Veterans Administration benefits and Medicaid.  When considering private pay options, you must take into account the kind of planning that has already been completed, how soon funds may be required, investment experience, income needs, estimated expenses, and your individual risk tolerance.  Long-term care insurance, which covers more expansive services that Medicare does not pay, helps to cover the costs of a nursing home, assisted living facility, or home health services, if needed, for assistance with the activities of daily living.  This option is continuously developing and may include hybrid options such as bundling long-term care coverage with a universal life insurance policy or fixed annuity, or even using tax-deferred assets, such as IRAs, to fund long-term care policies.

Medicaid, which pays for a significant share of long-term care services, is often planning of a last resort.  The State of Missouri has very strict eligibility requirements, and applying for Medicaid benefits can be difficult and overwhelming.  If this is the appropriate option for our clients, we counsel them on the Medicaid eligibility rules and do our utmost to relieve the burden of filing applications for benefits and appealing denials.

The bottom line is that protecting yourself and your loved ones by planning in advance is necessary for everyone.