New York Elder Law
Serving Clients in New York City and the New York Metropolitan Area
Americans are getting older.
Are you a “mature” individual 65 or older? Do you care about someone who is, or are you turning 65 soon? If yes, then you are in good company. According to the U.S. Census Bureau, Americans 85 and older are the fastest growing demographic group and, right behind them, more and more baby boomers are moving into retirement age themselves.
However, with advances in age come advances in health problems. Along with health challenges, there are special legal challenges that need addressing. The body of law addressing these challenges is commonly known as “Elder Law” today.
What is “Elder Law”?
Generally speaking, Elder Law is a holistic application of general legal principles to the specific life and financial needs of mature adults. A primary focus is concerns about (1) becoming incapacitated and possibly losing control of their personal, health care and financial decisions to a impersonal court system or (2) running out of money due to the catastrophic costs of long-term care. Fortunately, these threats may be minimized, or even avoided, through properly coordinated legal and financial planning.
Planning for Incapacity
As the number of birthday candles increase on your birthday cake, so do the odds of becoming incapacitated due to an injury or illness. Whether incapacity strikes suddenly or over time, the consequence is the same. Either you will have properly appointed decision-makers of your own choosing through legal planning in advance, or a judge (who likely does not know you or your loved ones) will appoint someone for you under the ongoing supervision of the court. The pre-planning alternative is less expensive, easier on your loved ones and protects your privacy from the public record.
Planning for Long-Term Care
According to commonly cited statistics, if you are age 65 and single, then the odds are about 50 percent that you will need long-term care at some point. For married couples, odds are about 75 percent that one spouse will need such care. For how long? The average care need runs about two and a half years.
Long-term care is expensive.
Nationally speaking, a year in a nursing home is estimated to cost an average of slightly more than $140,000.00. Little wonder 50 percent of married couples with one spouse in long-term care are impoverished within one year of admission. For singles, that percentage jumps to 70 percent.
Paying for Long-Term Care
You may be thinking, “I have Medicare, so I don’t have to worry about long-term care, right?” Wrong. Medicare only pays for acute nursing home care, not chronic care. Think of acute care as rehabilitation after hip surgery. You will be going home to care for your own daily needs after a short rehab stay. Think of chronic care as needing help with “activities of daily living” like bathing, eating, dressing, continence, toileting or transferring, not to mention dementia or Alzheimer’s for an extended period. Even for acute care in a skilled nursing home, Medicare is limited to paying for up to 100 days with strict eligibility requirements. Full payments are limited to the first 20 days and co-payments are due thereafter. Even your Medigap (i.e., Medicare Supplement) policy will not pay for your long-term care and will only pay during the Medicare covered time.
What about Long-Term Care Insurance?
If you are in good health and provide you can afford the premiums can pay the premiums, long-term care insurance (LTC or LTCI) is another means to pay for your care. In addition, long-term care insurance is sometimes used in conjunction with Medicaid legal planning to pay for care during any period of potential ineligibility. Long-term insurance must be purchased while you are younger and well. Once you have a chronic illness or a chronic health diagnosis you may be ineligible. Premiums for this type of insurance have increased and may be unaffordable if you purchase it after age 70. They must be purchased in the early pre-retirement years.
Medicaid is oftentimes confused with Medicare.
Medicaid is also a health insurance, but it is only available to the aged, blind or disabled who are low income. Medicaid is a joint state-federal program. Each state operates its own Medicaid system and may have a different name other than “Medicaid”, but it must adhere to federal guidelines to receive federal funds. There are strict income and asset guidelines that must be satisfied to be eligible for Medicaid coverage. These guidelines are linked to the federal poverty levels.
What about simply giving away your assets to loved ones to qualify for Medicaid?
Legally speaking, any transfer of assets for less than fair market value (i.e., a gift) will be reviewed by Medicaid and may result in a lengthy period of Medicaid ineligibility under a complex and confusing web of Medicaid regulations. Nevertheless, as with most areas of life, proper planning is rewarded. Through proper Medicaid planning, you may be able to legally qualify for Medicaid and protect your assets for yourself now and your loved ones later.
You may not be willing to admit that you may become incapacitated and perhaps need expensive long-term care in the future. However, denial is not a strategy and there is no time like the present to plan. A debilitating illness or injury could strike any of us at any time. When you are ready to explore your options, contact us to schedule an initial consultation.