I’ve worked with hundreds of clients with Alzheimer’s and their families over the past 30 years. Here are 4 questions and answers that families ask and some generalized answers. Of course these answers just touch the surface and every individual situation is unique. Please feel free to share your additional answers to these questions in the comments area below.
How important is maintaining autonomy even after the disease begins to progress?
Don’t try to maintain your autonomy to such an extent that it gets in the way of your need to set up and test your plan for incapacity. It’s important to work with your chosen agent while you still have adequate capacity to judge their actions and discuss your goals and objectives with them.
This period of time can be seen as your agent’s training camp. For this reason, the sooner you appoint your agent and begin to work with him or her, the better. Be willing to turn over working control and autonomy on financial affairs before you run into serious trouble. Get your support systems in place as soon as you can. And have a backup plan. If your first choice of caregiver or agent doesn’t work out, make sure you have a backup.
What are some warning signs that it’s time to get your assets in order?
Don’t wait for symptoms to appear. The earlier you plan the better. In most people with Alzheimer’s, symptoms don't appear until after age 60 and are especially prevalent for people who are in the 80s and older. Certainly if symptoms appear, or if you have a family history of Alzheimer’s, get help as soon as possible. But don’t wait for a diagnosis or crisis. Even if there are no symptoms you should try to plan for the needs and costs of your aging as you approach age 70.
It is important to understand why planning in advance is critically important to your family’s financial security. For most people with Alzheimer’s, needs based benefit programs like Medicaid and Veterans Pension will eventually be needed to help pay for care costs. About 2/3rds of nursing home residents receive Medicaid benefits. But to qualify for Medicaid you must have limited countable assets and income. And Medicaid program rules create problems if you try to protect your assets by making transfers within 5 years of applying for benefits. So, it is ideal if you can plan 5 years in advance of the need to apply for Medicaid benefits.
Some people create special trusts that can protect their assets without ownership being turned over to their children or others. This is a good planning option for many families. But, the 5 year look back period applies to the assets you transfer to these trusts. So you need to set up your legal/financial plan early.
How can caregivers best prepare?
Seek professional help for your spouse/parent as soon as possible – for legal help consult a certified elder law attorney. You can find a list of attorneys throughout the country who are certified in this area of law at www.nelf.org. Long term care is expensive. An experienced elder law attorney can show you how you can pay for the care you need without destroying your family’s financial security.
To locate other professional help, you can attend meetings of one of your local Alzheimer’s support groups – find out who the members of the group recommend – what has been their experience in dealing with lawyers, and doctors and financial planners and home health care agencies. The Alzheimer’s Association and many hospitals run these support groups. Call them to find a group in your area.
Make sure your loved one has a power of attorney that includes asset protection provisions if eligibility for Medicaid or Veterans Pension may become relevant in the future. A certified elder law attorney who is licensed to practice in your state can help ensure that your power of attorney has the correct terms. If you already have a power of attorney document prepared by another lawyer, have it checked over by a certified elder law attorney.
If you are the caregiver spouse of someone who has Alzheimer’s, you need to update your will, trust, beneficiary designations, and other estate planning documents.
Consider setting up an asset protection trust. Because of the five year look back period, this is an advance planning tool and ideally should be created well in advance of the need for long term care.
Talk with your certified elder law attorney about whether Medicaid annuities work in your state. In Pennsylvania, and some other states, a Medicaid annuity can protect all of the financial resources of a married couple, when one of them needs nursing home care. But, be careful. Many inappropriate annuities are being sold. If you buy the wrong annuity it can cost you a lot. Check with your certified elder law attorney before buying an annuity that is intended to protect your finances from nursing home costs.
If you are a child caregiver, work out a long term support plan with your parent(s) and siblings. Try to get everyone involved. Some family members will be able to help more than others, but everyone can usually contribute to some extent. The issues and concerns of aging and incapacity are difficult to discuss but you need to communicate with your family members.
Caregiving for a person with Alzheimer’s disease often has high financial costs for the caregiver. If you are a child of person who needs care, talk with your certified elder law attorney about whether a care contract that pays you for caregiving services makes sense for your family.
If you are a child of a care dependent parent, learn as much as you can about your parent’s financial resources and goals. Get to know their financial professionals. Your parent’s financial adviser and a certified elder law attorney can work together to help come up with the best plan to meet your parent's needs and pay for their care.
Learn as much about the disease and about caregiving as you can. Don’t hesitate to ask for help when you need it. Don’t try to do to be the "hero" who does it all on your own.
Contact your local area agency on aging to find out what resources exist in your area.
Where does the elder law attorney's responsibilities end and the financial adviser's begin?
The elder law attorney’s job is to understand the laws that apply to care dependent people and their families. The lawyer explains the options to the client and caregivers and helps them come up with a plan that deals with legal issues like the effective transfer of decision making authority, and legal/financial issues regarding qualification for benefit programs like Medicaid and Veterans pension. The lawyer needs to be an expert in the arcane rules of these programs and stay current on the changes that frequently occur. Basically the lawyer helps create the protective box (for example a trust) that will protect the client’s financial security and goals.
The financial planner then helps the client choose the best investments to go into that protective container. The financial adviser can help determine how do to maximize income if that is required, or how to minimize income and favor capital growth if that is what is best for benefit program qualification.
The elder law attorney’s role is typically more immediate (especially in a crisis situation) and involves analyzing the situation, advising the client of planning options, coming up with a plan, and implementing the legal plan structure through legal documents like trusts and asset protection powers of attorney. The elder law attorney will file the application for Medicaid benefits when that becomes appropriate and can help ensure that the process goes smoothly. Once the plan is in place, and after qualification for benefits, the lawyer may thereafter only be intermittently involved on an "as needed" basis.
The financial planner often gets involved as assets are transferred and assists with the investment of the protected assets. The financial planner’s role is going to be long term - working with the client and family caregivers over a long period of time.