Nobody would buy a home without being represented by a real estate attorney.

So, why is it that most seniors are signing nursing home contracts in the Chicago metropolitan  that require them to pay $6,000-$10,000 a month, for the rest of their lives, and never give them to an elder law attorney to review until after they’ve signed them and moved in?

Nursing homes in Chicago and Chicago suburbs can cost anywhere between $6,000 and  $10,000 a month. That means that a nursing home contract can cost you between $72,000 and $120,000 a year! How can you enter into a contract of this magnitude without the advice of elder care counsel?

Here are the risks you run in signing these contracts:

1) Losing access to the court system if something goes wrong in the nursing home.

2) Asking the senior’s children to sign as guarantors. Now the kids are liable!

3) Dictating to a senior what the senior may do with his/her own money while they are living in that particular facility and paying privately.

4) Requiring large deposits before one may apply for Medicaid.

5) Making legal and ethical asset protection planning by a senior  breach of contract. Remember: some nursing homes want you to believe that a single person must be down to $2,000 of assets before Medicaid becomes available. This is far from the truth. Medicaid allows for the legal and ethical repositioning of assets so that you can be at the eligible Medicaid level and still have a “rainy day fund” with which to buy hearing aids, have infected teeth extracted, buy eyeglasses, buy a TV for your room, etc.

You wouldn’t buy a home without having a competent real estate attorney representing you, right?

So, why would you buy into your nursing home without a competent elder care lawyer representing you before you sign the nursing home contract?

Stay tuned, more to come.

Anthony Ferraro

ATRA is generally classified as tax legislation, but has built into it numerous provisions affecting public benefits, elder care, Elder Law and our seniors and boomers in general.

What does this mean for seniors and boomers? Consider the following:

1. Tax rate changes – The bill permanently extended current tax rates for individuals earning less than $400,000 and couples earning less than $450,000. Wealthy taxpayers (those making more than $400,000) will revert back to a 39.6% (up from 35%) tax rate. Taxpayers in this wealthy category will also see an increase in their capital gains tax rate and dividend tax rate from 15% to 20%. Also, married couples that earn more than $300,000 and individuals that earn more than $250,000 will face a phaseout of the personal tax

2. Estate Tax Changes – The estate tax is alive and well. The federal estate tax exemption for 2013 will be $5.25 million per person and be indexed for inflation in future years. Effective January 1, 2013, the top federal estate tax rate will increase from 35% to 40%. Portability of the unused exemption will remain in place for spouses. And the gift tax exemption will remain at $5 million. The Illinois estate tax exemption will increase to $4 million per person for 2013.

3. Payroll tax – Since 2011, the payroll tax rate, which funds Social Security, was kept at 4.2%. Starting January 1, 2013, the payroll tax rate will now revert back to 6.2% for those earning wages.

4. Good news for doctors (and all of us) – For another year, doctors will not suffer the previously scheduled 27% reimbursement cuts to Medicare patients’ fees.

5. Older Americans Act funding – There is additional increased funding for important aging programs. For fiscal year 2013, Area Agencies on Aging will receive an additional $7.5 million in additional funds. The Aging and Disability Resource Centers received an additional $5 million. The National Center for Benefits and Outreach Enrollment will also see an increase of $5 million in funding. Also, Medicare State Health Insurance Programs (SHIP) will receive an additional $7.5 million in additional funding for 2013.

6. Sequestration- The scheduled automatic spending cuts are delayed by a few months. Half of the cuts would come from defense spending and the other half would come from non-defense spending.

7. Class Act is repealed – This was to be an attempt at a national long-term care insurance program. It was scrapped in exchange for the establishment of the Commission on Long-Term Care.

8. Commission on Long-Term Care- This commission will develop a plan for the establishment, implementation and financing of a comprehensive system that ensures availability of long-term services and support. The commission will look into the coordination of Medicare, Medicaid and private long-term care insurance. The commission will have 15 members, including the President. The various members will represent the interests of consumers, older adults, family caregivers, healthcare workers, private long-term care insurance, state insurance departments, and state Medicaid agencies.

Let’s hope they come up with an affordable long-term care model for our boomers and seniors.

Remember, the most painful financial crisis affecting seniors and boomers today is the devastating cost of long-term care ($6,000 to $10,000 per month, per person in the Chicagoland area!).

. Other items – The bill extended Medicare programs for older Americans including the payment for outpatient therapy services and specialized Medicare advantage plans for special needs individuals. The bill also extended the qualifying individual program (QI program).

10. Note: This is complicated stuff. But don’t let it stop you. Keep reading in the months ahead to understand more of the changes and how they might impact you. Also note that this bill still doesn’t solve the problems regarding sequester and the debt limit debate. That heavy lifting is still coming.

Things will certainly heat up in trying to resolve those issues.

We will be writing about the impact of “sequestration” soon.

The Takeaway:

Stay tuned in. Start your ” Senior Estate Planning” now.

Anthony B. Ferraro

Attorney- MsTax- CPA

For years,  clients of our office have  been very concerned about the Estate tax. I have reassured many clients over the last couple of  years that the Estate tax will not impact you unless you have more than $5,000,000 ($10,000,000 if you are married).

Now contrast that to the cost of what I call the “Medicaid tax”. The “Medicaid tax” is  the government’s  requirement that you  spend your assets down to $2,000 (as a single person) before you get any Medicaid  help for your  custodial care or long- term care, either in a Supportive Living Facility (similar to an assisted living facility) or an Intermediate or Skilled Nursing Facility.

This terrible governmental  requirement to spend down to $2000 is what I refer to as a 100% Medicaid tax. Because, effectively you have to be down to zero assets before you get any assistance with maladies that require custodial care, such as dementia, Alzheimer’s, Parkinson’s, MS, ALS, COPD,  muscular dystrophy, etc.

Therefore, I politely ask my clients to “wake up and smell the coffee”. Quit obsessing over the effect of the Estate tax. It will not affect most of us.

On the other hand, consider the government-mandated Medicaid spend down of your assets to paltry $2,000 -  this will affect most of us.

Why will this affect most of us? Because, due to the advances of medical science,  most of us are living much longer (thankfully).  However, while we are living much longer, we also need more care as we age. Couple this with the fact that the average cost of a Supportive Living Facility (SLF) is somewhere around $4,000 a month and the average cost of an Intermediate or Skilled Nursing Facility is $6,000 to $10,000 a month, and you have a “perfect storm” scenario that can lead to a Medicaid spend down of your assets to a measley $2,000. And that $2000 has to last you for the rest of your life. This is, in my view, the equivalent of a 100% “Medicaid tax“.

How treacherous is it to be spent down to $2000? Let me give you an example. We recently had a client at our office that needed  abscessed teeth to be removed. Our client was 85 years of age and spent down to $2000. She was told that the only available Medicaid dentist  in Cook County would take her, but it would require her to wait 6 to 8 hours in the waiting room. My client had moderate to severe dementia and could not last 6 to 8 hours in a waiting room. It would have been nice if she had come to me earlier so I could set aside a rainy day fund for her.

A Solution: This would be a legal and ethical  re-allocation of her assets so that she could have funds for things like teeth extraction,  but still qualify for Medicaid benefits.

We had  another client that required hearing aids. Hearing aids cost $6,000.How do you buy them when you’re spent down to $2,000?

So we inform our clients that they should not be concerned about the Estate tax unless they are very, very wealthy. The more likely severe financial impact that will hit most of our clients comes from the devastating cost of long-term care.

Clients have to understand that they must  plan while they still can. Unfortunately, this window can sometimes close very quickly due to the onset of a stroke, heart attack, accident, or some other catastrophic disability.

At The Law Offices of Anthony B. Ferraro, LLC, we are Attorneys and CPAs. We have been serving clients in matters of Medicaid asset protection, long-term care planning, traditional estate planning, senior estate planning, estate tax planning, and estate and trust administration for a combined 45 years.

Today’s environment in which our seniors are asked to fend for themselves and protect themselves and loved ones from Medicaid spend down, taxes, the cost of home care, healthcare, long-term care,  creditors, predators, divorcing spouses, and illness, is very complicated to most of our clients.

But we deal with this every day. And we are just a phone call away.

Consider making the call to our office while you are still are able to plan. Let us provided you with service and guidance that will be essential for your well-being and that of your loved ones.

Let us give you options…

So you don’t go broke the aging process.

Anthony B. Ferraro

Attorney-MSTax-CPA

The Law Offices of Anthony B. Ferraro, LLC

Attorneys & CPAs

The Elder Law, Estate & Trust and Asset Protection Law Firm

5600 North River Rd.

Rosemont, Illinois 60018

 847-292-1220

www.ABFerraroLaw.com

The main focus of hospice is to keep levels of dignity and quality of life as high as possible throughout the end of life. Caring measures are not meant to cure a person. Instead, it is palliative care that is intended to relieve or reduce discomfort.

A physician can call in hospice once he or she determines a patient has six months or less to live. Hospice will go wherever the person is — to a long-term care facility, home, etc. Some long-term care facilities have their own hospice programs and should be considered.

A standard plan of care typically stops once hospice is called in. Treatments such as radiation would cease, for example, and palliative care would take over. A hospice team would then create a new care plan. The patient’s physician coordinates care with hospice.

A hospice team generally consists of a social worker, chaplain, certified nursing assistants, registered nurse and a medical director. Some hospice agencies deliver bereavement care to family members for several months after a loved one’s death. Hospice is a wonderful service and is highly recommended for your ones’ care, should it ever be needed.

A power of attorney is a legal document where one person (the principal) designates another person (the agent) to act on his or her behalf, either for financial or healthcare decisions.

A conservatorship is a legal relationship whereby a court gives a person (the conservator) the power to make financial decisions for another (the protectee). Court proceedings here are very similar to those of a guardianship, except the court of law determines whether an individual lacks the capacity to manage his or her financial affairs.

If this is the case, the court appoints a conservator to make financial decisions for the person. Often, the court will appoint the same person to act as guardian and conservator for the individual. Just as with the guardianship, the conservator must report to the court annually.

Powers of attorney for healthcare and property/financial decisions are relatively inexpensive and a private way to determine which family member or friend will have the legal authority to carry out your wishes if you can no longer speak or act for yourself. You must consider that if you do not have powers of attorney, or if the papers for one are not drafted properly, your loved ones may later face court proceedings and court supervised guardianship and/or conservatorship, if something happens to you.

A court proceeding is not only costly, but the person who ultimately is appointed as your guardian/conservator might not be someone whom you would have chosen for these sensitive decisions.

Powers of attorney are the single most important documents to put in place so a family member or trusted friend will have the legal authority to carry out your wishes if you can no longer speak or act for yourself. If something happens where you become unable to make decisions and you don’t have a power of attorney, your family might later get tied up with court proceedings and court supervised guardianship and/or conservatorship.

You don’t necessarily need a lawyer to draft the powers of attorney, but you have to be careful. Without the proper, precise wording, your agent might not be able to work with some of the issues important to you.

While some people buy a “form document” power of attorney from an office supply store or download one from the Internet, these documents might not address certain things. They can, however, legally authorize someone to act on another’s behalf. But, for example, the law states that your agent cannot handle certain matters unless specific working in the document empowers him or her to do so. Things that are covered in this manner include the power to make gifts on your behalf and the power to remove and/or add assets to a trust.  Laws vary from state to state, so check to see if a form document addresses key issues you want covered.

All of these powers can be vital in planning for and around Alzheimer’s care. That’s why it’s so important to complete documents for them now, while your loved one still has the mental capacity to do so. Otherwise, it could quickly become too late, as mental and cognitive abilities decline.

All people have a constitutional right to refuse any medical treatment, including ventilators and feeding tubes. This was determined by a Supreme Court decision called Cruzan et ux v. Director, Missouri Department of Health. There are also state laws that authorize an individual to name a person to make healthcare decisions for when he or she is unable to do so himself or herself.

Advance directives are intended to ensure that a person’s wishes are known — and followed. Among other things, they allow a person to state wishes regarding the potential use of life-prolonging procedures. The necessary documents will be most helpful to survivors if wishes are discussed ahead of time with family members, friends and healthcare providers as part of advance care planning.

The most common healthcare directive is the Power of Attorney for Health Care Decisions. It allows you to appoint a person to make healthcare decisions if you are incapacitated, and it also allows one to state wishes about issues such as life support and organ donation. The document would go into effect only when the creator of it cannot make or communicate decisions for himself or herself.

When a person completes an advance directive, copies of it should be given to corresponding physicians, family members, clergy, attorneys, friends and other appropriate people. The details of the directive should be discussed. Whenever the person is hospitalized, a copy should accompany him or her. The person also should ask the doctor to make it a part of the permanent medical record.

Contrary to what some might believe, an advance directive is valid in any state. However, because there are state-to-state differences, it is recommended that people have documents drawn up, witnessed and notarized in the state where they live. Advance directives then stay in effect until the creator’s death, unless that person revokes it ahead of then.

There are many types of groups you can join. You need to find one that makes you feel comfortable. They typically have a special theme or focus, such as for spouses, adult children, caregiving aspects, etc. You should find a group that meets at least twice a month to get the best benefit.

You also might consider a group that generally discusses caregiving issues. Most issues with caregiving are similar, no matter what the disease. Some issues confronted might be frustration, guilt, anger, fatigue, finances, physical challenges such as incontinence and so on.

The goal of a support group is to give you a confidential, secure way of expressing your feelings and concerns. This can lessen pressure or anxieties you might be feeling. The caregiving you’re doing is a difficult job, one that nobody really asks for. You don’t volunteer for it but are volunteered for it, so to speak.

Sharing with others who identify with your situation can be affirming, comforting and validating. You also can talk to the group to find solutions to problems you might be having. Odds are that someone else in the group already has experienced a similar problem and can relate to it, and probably supply a practical solution.

The individual with Alzheimer’s also can benefit from being part of a support group. He or she needs to talk about feelings and experiences with the disease. Joining a support group can help lessen frustration and anger. Members of such groups talk openly about having the disease, what to expect and how to plan for it. Therefore, the participant must first be aware of his or her diagnosis to take part.

Support groups for patients themselves is a fairly new concept so you might not find them as readily available as those for family members. So far they have typically been more common in larger metropolitan areas.

Keep in mind that if you live in an area that does not have a support group, there are groups established online. One example is The Alzheimer List, which is sponsored by the Alzheimer’s Research Center in St. Louis and can be found here.

Inform them about pertinent information concerning her and her life — what she likes, dislikes, any habits she might have, typical moods, and what seems to work when approach her in different situations. The more her caregivers know, the better they can care for her.

Compliment staff members when you learn about them doing something you like. Be involved at the facility as much as possible. Attend social events and family council meetings if you can.

One good example of relationships being built very well involves a man who took a picture of his wife and the staff on her unit. He had an 8-by-10-inch shot of it made and wrote the name of each caregiver underneath it. When placed on his wife’s closet door, it served as an aid to helping her recognize the people taking care of her.

It also made the staff members feel very included. It made them feel important and let them know that the family really cared about them. This gesture built a lot of good will and enhanced his wife’s care.

To the staff: Don’t be intimidated by residents and/or their families. You are the frontline worker, an honorable position. Without you, there would be no care for their loved one. That is a compliment of the highest order.

Show interest not only in the resident, but also his or her family. Introduce yourself and tell them a little bit about your background, your interests, how long you have been a caregiver and why you are in that line of work.

When family members enter the unit, greet them cheerfully and give them information about their loved one, whether the news is good, bad or indifferent. What many caregivers don’t think to do is call a resident’s family if something good happens during the day. These are blessings that can be few and far between for family members, and they’ll go a long way.

Unfortunately, there can be stigmas about nursing homes and their caregivers. For the most part, these workers are intent on doing a good job and truly care about what they do and who is in their charge. Everyone needs to work together to overcome negative stereotypes so residents will have positive experiences in their new home.

To most people, “home” is a place where we feel loved and accepted — and safe. So the best way to answer your question is to think about the word “home” and what it signifies. Depending on where he is with memory loss, your father might be conjuring thoughts of a childhood home with his parents and siblings. Or the home where he was first married, the kids were young or any time before, after or in between

He might be living in the same home he’s been in for 20 or 30 years and still ask to go home.

Due to the nature of Alzheimer’s, your dad is likely feeling insecure, fearful, even unlovable. Please pay close attention to this next point: It is not your fault. He is dwindling a bit, day-by-day, and he is frightened. Fear can drive many emotions, not the least of which are insecurity, anxiety, anger and low self-esteem. Your father needs to feel safe. If he doesn’t carry good feelings about himself, he probably doesn’t feel he can be loved by anyone.

Remember that the most important thing to realize is you need to constantly validate his feelings. Instead of telling him he is home, tell him simply that he is in a safe place and that he is loved very much. You can tell him, for example, “Dad, you’ll be staying with me and Anthony for a while. We’re happy you’re here and we love you.”

Reminiscing about his childhood and looking back at his life and life accomplishments also should make him feel good about himself and decrease negative feelings.

Because Alzheimer’s patients typically have short-term memory loss, he will nonetheless continue to ask about “home.” Repeat over and over that he is in a safe place and loved very much. Giving hugs throughout the day will truly say much more than words. A hug produces feelings of love, acceptance and security — three big concepts that continually need addressing.  For more information regarding how to treat a loved one with Alzheimer’s, click here.