Elder Planning: Five Strategic Considerations for the Golden Years
With today’s long life expectancies, it’s crucial to plan for elderly parents and for your own elder years.
Whereas estate planning addresses what happens when someone dies, elder planning addresses the possibility that a person may live to an advanced age. A big consideration in elder planning is the possibility of living with diminished health for an extended period of time.
As you begin elder planning, consider these things:
1. Power of Attorney: An effectively drafted power of attorney document gives another individual control over financial and medical decisions. Someone with power of attorney can make important decision on behalf of an elderly person. Further, a durable power of attorney remains effective after the death of the primary person.
Springing power of attorney kicks in when someone is no longer competent to make decisions for themselves. This is a common power of attorney feature, but consider it carefully. Dementia, like Alzheimer’s, and other conditions can cause a person to fluctuate between competence and incompetence, which leads to uncertainty about when the power of attorney is effective.
2. Long-Term Care Insurance: Long-term care insurance covers costs associated with assisted living, nursing facilities and skilled care given at home. It’s wise to consider long-term care insurance well before you may need it. Often, individuals purchase it during their 50s, but you can buy it earlier or later in life. Consider the cost of care in your area and the type of care you’d wish to receive when you compare policy features.
3. Veterans’ Benefits: Seniors who served in the military may qualify for benefits. Veterans of World War II, Korea, Vietnam or any other American war – and their widows/widowers – could receive a nice tax-free monthly benefit. A married couple could qualify for up to $2,020 a month. To find out more, contact the Veteran’s Administration.
4. Medicaid: This health coverage benefit provides assistance with the cost of nursing care – not to be confused with Medicare, which does not. The criteria to qualify for Medicaid assistance varies state-by-state, so careful research is required to see whether this benefit applies to your situation.
5. Elder Care Attorney: There are lawyers who specialize in elder care issues; some of these issues just aren’t on a standard attorney’s radar. Government-provided benefits, local programs, tax strategies and insurance plans are difficult to understand without careful research and deep knowledge that most laypersons don’t possess.
Like most financial matters, a careful plan makes the process much easier and far less stressful for everyone involved.
Start by talking with your family to learn everyone’s opinions and wishes. Next, it’s wise to have power of attorney documents created because they’ll help you understand and frame the many issues involved with elder planning.
Charlie Koch, MBA, CFP®, CFS®
Senior Investment Adviser
Photo Credit: Beau B
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