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“Top 10” Elderlaw Mistakes

The Deep Freeze *      When we feel overwhelmed, we tend to “freeze” in place. Unless we understand our situation and our options, we cannot make thoughtful decisions. *      The most common elder care mistake is the notion that the subject itself is just too hard to understand. It is not.   No Documents *      Although most people have Wills to control the distribution of their assets when they die, many of us still do not have documents to mange our assets or to control the future direction of our health care. *       The durable power of attorney and health care proxy enable us to designate others to handle health and financial matters if we ever lose the ability to make our own decisions. The living will enables us to alert the medical professionals in advance about our end-of-life treatment preferences. *       These three “documents” are quite essential and often overlooked. Without them, a spouse, family member or trusted friend must obtain a court order to gain the necessary legal authority to handle our personal affairs.   Outdated Documents  *       Even if we complete the proper documents (see above), they accomplish little if they become outdated. *       Keep these documents up-to-date. Name a successor person to replace the primary person if your first choice is unavailable. Finally, store these documents in a safe but accessible location.   Bad Record Keeping *       If you do not have long term care insurance, you may need government funded home health care or nursing home care through Medicaid. If you apply for Medicaid, they will require the copies of bank and brokerage statements and related financial records for the 5-year period preceding the Medicaid application.     Failing to Gift in Advance of Illness *       Medicaid will not pay for nursing home care if you give away assets on the eve of your relocation. Instead, you will be required to wait for a certain period of time as a penalty for making the last minute gift. In the absence of long term care insurance, it makes sense to reduce excess assets long before Medicaid is required. Medicaid looks back 60 months for gifts and gifts to certain trusts.   Joint Bank Accounts  *       Although joint bank accounts are convenient, they can cause Medicaid problems. If a Medicaid applicant has a joint bank account with a non-spouse, Medicaid will presume that all funds in that account belong to that applicant. Medicaid will not presume that half of the funds belong to the non-applicant. *       Medicaid allows single persons to have approximately $14,250 in assets. Married couples are allowed approximately $20,850 in assets (or up to $113,640 if only one spouse applies for nursing home care). The inclusion of the entire balance of a joint bank account may disqualify the Medicaid applicant from coverage.   I-Love-You Wills  *      When spouses prepare their Wills, they typically leave their individual assets to the surviving spouse. If one spouse ever needs Medicaid-funded nursing home care, the healthy spouse is permitted to retain up to $113,640 in assets. If that at-home spouse passes before the ill spouse, Medicaid allows the surviving “nursing home” spouse to retain only $14,250 in assets. An inheritance from the deceased spouse could disqualify the surviving spouse from further Medicaid coverage.   Overlooking Long-Term Care Insurance *     Many seniors suffer “sticker shock” when they see how high the premium is for long term care insurance, but they forget that nursing homes cost approximately $12,000 per month. *      Out of every 1,000 people, 400 will need long term health care at some point in their lives. If you are healthy enough to qualify and the insurance premium is affordable, you may wish to consider this private option. Many states offer “Partnership programs” to encourage the purchase of policies.     Reverse Mortgages  *       Instead of paying a monthly mortgage payment to the bank, that bank pays a monthly payment to you. The mortgage must be paid to the bank when the house is sold or when you pass away, whichever occurs first. *       According to Consumer Reports, 60% of those with reverse mortgages seek to “buy back” their homes so they can sell them and relocate. Unfortunately, they will owe a substantial amount in fees and interest to the bank. *       If Medicaid is eventually required, the extra monthly income from the reverse mortgage will not disqualify the person from coverage.   Procrastination *      Too many seniors procrastinate until illness strikes. *     EDUCATE YOURSELVES NOW AND TAKE ACTION.