Planning for your elder years

JBA Elder Law Section Chair Mike Jorgensen

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  • | 12:00 p.m. August 23, 2010
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According to surveys frequently conducted among the elderly, when asked “what his or her most important concerns for aging are?” the most likely answers received included the following three principal concerns or life wishes:

1. Remaining independent in the home without intervention from others;

2. Maintaining good health and receiving adequate health care;

3. Having enough money for everyday needs and not outliving assets and income.

To address these concerns and maintain the quality of life wanted in the elder years, it simply takes a little preplanning. Few people do this kind of planning. It is human nature not to worry about an event until it happens.

We may prepare financially for unexpected financial disasters by covering our homes, automobiles and health with insurance policies. However, no other life event can be as devastating to an elderly person’s lifestyle, finances and security as needing long-term care. It drastically alters or completely eliminates the three principal lifestyle wishes listed above.

The majority of the American public does not plan for this crisis of needing eldercare. The lack of planning also has an adverse effect on the older person’s family, with sacrifices made in time, money, energy and lifestyles.

Because of changing demographics and potential changes in government funding, the current generation needs to plan for long-term care before the elder years are upon them.

• The population of the “very old,” older than age 85, is the fastest growing group in America.

• This population is at the highest risk for needing care.

• Medical science is preventing early sudden deaths, which means living longer with impaired health and greater risk of needing long-term care.

• The Alzheimer’s Association estimates the risk of Alzheimer’s or dementia beyond age 85 to be about 46 percent of that population.

• It is estimated that six out of 10 people will need long-term care sometime during their lifetime.

• Children are moving far away from parents, or parents move away during retirement, making long-distance care-giving difficult or impossible.

• Government programs will experience even greater stress on available funds in the future.

One of the important things for planning is how to maintain the elder’s lifestyle. In order to maintain independence at home, the elder must be able to maintain a home, provide meals, not require supervision for medication and bill-paying management, enjoy companionship, and have the ability for transportation and shopping.

Government programs, in most cases, will not pay for this kind of care. It is estimated that 80 percent of all long-term care is non-medical, with 90 percent of that care provided in the home. It is most likely that the elder’s long-term care will begin with home care.

It is wise to plan now how the loved one will pay for care when it is needed. In evaluating his or her future income, the care provider should consider adding resources to the budget, such as long-term care, if possible. The insurance may help pay for assisted living or nursing home costs.

Long-term care insurance must be purchased while younger (typically younger than 80) and while healthy and insurable.

Failing health, stroke or other aging issues prevent qualification for this insurance. Sometimes, the insurance may be purchased from funds received through a reverse mortgage and the mortgage may be considered as an option.

Now is the time to do estate planning and the time to create trusts, wills, medical directives and any other documents needed for future use. Now is the time to gather insurance policies and bank records before the elderly loved one is unable to assist in the location.

The process of long-term care planning involves the following four principles:

1. Knowledge and preparation are the keys to success.

2. Having funds to pay for care expands the choices for care settings and providers.

3. Using professional help.

4. Using a written plan accepted by all parties involved.

The National Care Planning Council’s website, which is, provides more than 700 pages of information for long-term care planning and lists services of professional care providers in estate planning, long-term care insurance, reverse mortgage, home care and many other important long-term care services.