No thirty or forty year old looks forward to aging or to the thought of being in either assisted living or a nursing home, or to the problems, aches and pains that come with growing older.  However, you should do some early legal planning and goal-setting to avoid being broke and living off minimal government assistance or ending up in a nursing home, wishing you had been wiser years earlier. Start your retirement planning now, especially on legal issues.

Everyone ages, but not all age well.  More than 10% of people over the age of 65 and 50% over the age of 85 will be face issues including being totally dependent on care by others for their own needs.  Will those costs be covered by health insurance or Medicare?  At best, only a small fraction will be covered.  The result is that their life’s savings could be eliminated in almost no time by the incredible costs of health care.

Work to stay healthy

Staying healthy is a life-long goal.  Many of the major health issues facing the “Boomers” and which will inevitably face the next retiring groups of people are what can best be referred to as poor choice conditions.  Type II diabetes, poor sleep and many other conditions are worsened by weight gain and poor eating choices. Smoking, lack of exercise and eating wrong can increase the risk of heart disease, cancer, and many other conditions.  Even if you are already in your 50’s or older, start now to improve your future and not ruin your retirement

But there are other steps that can help you avoid spending your retirement life and your hard-earned money on avoidable medical care or a nursing home. Start with your estate plan and best practices. Learn what may look good but be inadequate. Better late than never.

Traditional estate planning – Why it may be inadequate

Good estate planning is a lot more than minimizing or avoiding the expense of probate or estate taxes.  It is even more than reducing the distress and the potential for fighting among family members. 

Right now, the estate tax thresholds are so high that very few Americans have to be concerned about that issue.  Without a doubt you do want to make the handling of your estate easier and less stressful for your family and loved ones and you certainly do not want money going to attorneys to litigate over your true wishes.  A good estate plan will accomplish those things – but should do a lot more.

Estate planning involves preparation of wills or trusts, advance directives, durable powers of attorney, living wills, perhaps deeds, among other documents.  That is a good start, but good estate planning does more than attempt to help your family and loved ones quickly and effectively carry out your wishes when you die.

What else is there?

Traditional estate planning solutions often do not address long-term care issues. A great threat today is unanticipated long-term care costs which many will face before death.  Just as an illustration, dementia and Alzheimer’s Disease, which neither Medicare nor any health insurance covers, create extremely costly long-term care needs, and can also place an incredible burden on a family’s emotional and spiritual condition.  An estate can easily be drained of a lifetime of savings in a just few months, leaving someone who worked hard dependent on overwhelmed family members and Medicaid. retirement savings can be decimated in only almost no time.

There are types of trusts and actions that can be taken to allow a person to receive Medicaid without totally draining all assets. Not all assets and types of assets must be liquidated before a person is eligible for Medicaid. Taking steps to protect your retirement and your future should start now!

What should you look for?

Medicare has at best very limited coverage for long-term care needs.  Medicare will cover those bills that come from conditions for which there is a medical cure.  Medicare will cover treatment costs for many conditions and their treatment.  But Medicare will generally have no coverage for conditions such as Alzheimers, Parkinsons, dementia, or just the frailty of old age.  Yes, you can get Medicare to pay for a walker, but Medicare can’t give you any place to walk to. Yes, Medicare can get you a wheel chair, but not someone to push it. 

These conditions and many others require you to seek other assistance, assuming it is available.  You may find some assistance through the Medicaid or, if you are a veteran, through a VA program, but neither Medicaid nor the VA will help much, if any, if you have significant assets or money.

So if all you have done is plan to leave your estate to your spouse or to another, you have an estate plan that likely does not address your most probable future.

Quality of life and the nursing home issue 

Take an all-too-common future as an illustration: a person becomes incapacitated by memory and mental ability failings resulting from Alzheimer’s Disease or dementia.  The trustee or guardian appointee will likely turn to the family or doctor for advice on how to address the future issues.  They are often ill-equipped to deal with the questions and issues that are inevitable.  Does the person stay at home?  If so, who cares for the incapacitated person?  Who does transportation, meals, scheduling appointments, dealing with medical dressings, bowel movements, medications, bathing, etc.?  Who will pay the bills if and when assisted living, memory care, a nursing home and hospice care become necessary? What happens when the money runs out?

A better estate plan

There are a few documents and some contents of those documents that are necessary to a good estate plan.  They include:

A Last Will and Testament

One important issue to be considered is your financial future through your passing and the handling what is left. Don’t rely on Medicaid! The qualification for Medicaid benefits in Florida requires the applicant to have no more than $2,000 in his/her name (this does not include the home). 

A trust should also be considered. A trust is a legal relationship in which one person (or a qualified trust company), known as the trustee, holds property for the benefit of another, known as the beneficiary.  A trust can, among other benefits, provide a legal means for management of assets when the person to whom you leave an inheritance can’t or shouldn’t receive or manage the assets themselves or to limit how the inheritance is used.  There are different types or trusts and different purposes and potential benefits (as well as costs) that are beyond the scope of this brief article.  Assets can be given to a Special Needs Trust for the exclusive benefit of a surviving spouse.  There are different types of Special Needs Trusts.  Assets that placed in such a trust will normally not be counted as owned by a surviving spouse and therefore will not need to be spent down to qualify for Medicaid to pay for your long-term care services.

Durable Powers of Attorney 

A Power of Attorney (POA) is a legal document granting authority from one person to another.  The maker of the POA (the “principal”) grants the right to act on the maker’s behalf as the maker’s legal agent. What authority is granted depends on the specific language of the Power of Attorney.  A POA should be “durable” because an ordinary POA terminates when the principal becomes incapacitated.  A properly drafted Durable POA will allow the financial and business affairs of an incapacitated person to be carried out by a trusted person. 

Advance Directives, Health Care Surrogate Designations and Living Wills

Finally, in light of the case involving Michael and Terri Schiavo case in Pinellas County, Florida, most Floridians (and many people everywhere because of the level of publicity of the case) know at least a small amount about the need for advance directives.  Terri Schiavo was in a persistent vegetative state for years while her husband and her parents fought in court over whether or not her husband should be allowed to have her feeding tube removed.  Advance directives should take this case and the universal desire to avoid being a national spectacle into account. 

A Living Will is a written statement detailing a person’s desires regarding their end stage medical treatment in circumstances in which they are no longer able to give informed consent.  Simply put, a Living Will is a way to state your wishes for end-of-life medical care.  Requirements vary by state and it is wise to have a Living Will be prepared by a knowledgeable attorney; documents from Internet sites of stationary stores may not meet legal requirements.

Hand–in-hand with a Living Will is a Healthcare Surrogate designation where a person designates another trusted person to make healthcare decisions for a person who becomes unable to make them for himself.  This is useful because many circumstances may arise that are not explicitly covered in a living will.

In conclusion, a good estate plan is a quality of life plan designed to help you and your loved ones though your later years and then to help your family with the loss. Do you need some help getting started with protecting your hard-earned retirement?  Call The Idlewild Foundation at (813) 264-8713.

About the Author

John Campbell

John Campbell has retired from a 40 year legal practice as a trial attorney in Tampa. He has served in multiple volunteer roles at Idlewild Baptist Church in Lutz, Florida where he met Jesus.  He began serving as the Executive Director of the Idlewild Foundation in 2016.  He has been married to the love of his life, Mona Puckett Campbell, since 1972.