As elder law attorneys, we find that one of the most pressing client matters we deal with centers on the impact of Alzheimer’s disease. Though it is a disconcerting prospect, you should be aware of this looming threat when you are making preparations for the future.
Deadly and Surprisingly Common
Everyone has heard of Alzheimer’s, but many are very surprised when they find out how widespread this affliction has become. Here are two key points. Once you reach the age of 67 your life expectancy is into the mid-80s. And, over 30 percent of elders that are 85 years of age and older have Alzheimer’s.
In all, there are at least 6 million people with Alzheimer’s disease in the United States at the time of this writing. Since the baby boomer generation is attaining senior citizen status, the population is aging, and this is fueling an increasing number of cases.
By 2050, absent a medical breakthrough, experts expect the 6 million figure to grow to 13 million.
We all know that Alzheimer’s causes dementia, but a lot of people do not understand its deadly nature. It kills more people than prostate cancer and breast cancer combined, and it is the sixth leading cause of death in the United States.
Impact on Families
Loved ones are usually going to step up to the plate to provide assistance for family members that have Alzheimer’s. According to the Alzheimer’s Association, there are currently over 11 million people providing unpaid care for Alzheimer’s patients.
Caregiving can be time-consuming and physically demanding, and of course, it is emotionally difficult to watch a parent or another loved one deteriorate. There can also be a financial burden, so this disease is very hard on all of the people that are affected.
Incapacity Planning
Alzheimer’s disease is not the only cause of dementia. Apart from Alzheimer’s, some people become unable to communicate effectively or make sound decisions late in their lives because of purely physical conditions. To account for possible incapacity, you should execute certain documents.
In the event you are terminal, persistently unconscious, or have an end-state condition, you can state your life support preferences in a living will (aka “Advanced Directive”). You can also indicate your organ and tissue donation choices. To account for scenarios that call for medical decisions that are not related to life-support, you can name a representative in a durable power of attorney for health care.
A provision that is contained within the Health Insurance Portability and Accountability Act (HIPAA) prevents doctors from sharing medical information with anyone other than the patient. Your plan should include a HIPAA release to give your health care agent and other loved ones access to your medical information. records.
On the financial side of things, if you have a living trust, you would act as the trustee while you are alive and in good health. When you are drawing up the trust agreement, you can designate a disability trustee to assume the role in the event of your incapacity. You can even choose the standard for determining your “incpacity” and who makes that decision.
To account for assets not owned by your trust, you can name an agent to make decisions on your behalf in a durable power of attorney for property.
Nursing Home Care
At some point, the level of care that is needed can exceed the capabilities of family members and friends. Nursing home care may be an inevitable option. As you probably know, these facilities are extremely expensive.
Medicaid is a government health insurance program that will pay for long-term care. However, to qualify for Medicaid you cannot have more than $2,000 of countable assets.
The good news is that there are some assets that don’t count, including a home. To develop a financial profile that will lead to eligibility, an irrevocable, income-only Medicaid trust can be created and funded.
As the name would indicate, the creator of the trust (the Grantor or Trustor) would be able to receive distributions of income generated by the trust’s assets, but they would have no access to the principal. The trust would be administered by a trustee that is designated when the trust is established.
To qualify for Medicaid, your countable assets cannot exceed $2,000 for five consecutive years prior to applying for Medicaid assistance. This is referred to as the “look back” period. If the ownership of the assets has been transferred to the trust for at least five years before the application for Medicaid eligibility is submitted, the assets in the trust would not count.
Schedule a Consultation Today!
We are here to help if you are ready to work with an Oklahoma City estate planning lawyer to put a plan in place. You can send us a message to request a consultation appointment, and we can be reached by phone at 405-843-6100.
Since founding Parman & Easterday in 1985, Larry has led over 1,000 free, community-service education programs and helped more than 10,000 Oklahoma families go from putting off their estate plan to getting it done. His goal for every client is the same: to become the person their family calls "the one who took care of everything."
Larry is the author of three books: The Straight Shooter's Guide to Estate Planning; Estate Planning Basics; and Guiding Those Left Behind in Oklahoma. He served as Oklahoma's Secretary of State and Secretary of Commerce, and his firm is the only member of the American Academy of Estate Planning Attorneys in the state.
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