Costly medical bills, the potential need for nursing home care, the possibility of dying, and the need to provide security for a surviving spouse are a few important reasons to get financial affairs in order.
Just as people usually get to a point where they need a health care representative to make decisions when they can’t, it’s wise to appoint someone to make financial decisions should that time come.
Planning ahead ensures that family members will be provided for in the manner of your choosing.
An important concern in later years is whether expenses for one spouse will gobble up resources and leave a surviving spouse with not enough money for their own needs.
Medicare is the federal government’s insurance program for older adults and those with disabilities. Medicare will pay for limited time in a nursing home provided 24-hour nursing care is required. But people who need long-term assistance and those who need non-medical help such as preparing meals, doing laundry or remembering medications must pay for this care out of their own pockets. This can get very expensive!
Medicaid is the federal government’s program designed for low-income individuals. Sometimes it can be enlisted to pay for extra-care needs. Many people enter a facility as private-pay clients and eventually exhaust all their assets. At that point, they qualify for this program. Medicaid typically covers what Medicare doesn’t. However, choices of facilities are extremely limited when on Medicaid. Qualifying for this low-income program involves specific formulas for countable assets (bank accounts, stock, property) and exempt assets (house, car, belongings).
Long-term care insurance
Lon-term care insurance is an alternative that may help you protect your assets. This form of insurance is designed to pay for skilled and unskilled help for a long period of time. Depending on the terms of your policy, you may receive care in your home, in an assisted-living setting, in a residential care setting, or in a nursing home.
Long-term care insurance is not for everyone, however. It can be very expensive, especially if you are already ill. Unfortunately, the best time to enroll in long-term care insurance is while you are relatively healthy. Age is also a factor. The younger you are, the lower the premiums, but the longer you will likely be paying them. If you would qualify for Medicaid within six months to a year of paying for services on your own, long-term care insurance is generally not considered a worthwhile investment.
Long-term care insurance typically has many restrictions. Shop around carefully for a policy that meets your projected needs. It is not unheard of that a family has paid premiums for years, only to find that the particular circumstances of the condition are not covered by their policy.
Each state has a State Health Insurance Assistance Program that can offer tips and advice about the purchase of long-term care insurance. Contact the federal Eldercare Locator program toll free at 1-800-677-1116 to find the State Health Insurance Assistance office closest to you.
Durable power of attorney: Someone to handle finances, just in case
During the course of an illness or hospitalization, it may become difficult to get to the bank, file taxes, go to the assessor’s office, or balance the checkbook. Yet to protect their customers, most financial institutions will not discuss finances with anyone who is not listed on the account. This can become a significant problem if the customer becomes homebound or bedridden. Or if they have dementia.
The durable power of attorney
The role of “durable power of attorney” (DPOA) is designed to alleviate this problem. It’s a person who is legally appointed by the account holder to make financial decisions on their behalf if they are unable to.
Because accidents can happen at any age, it’s actually wise for everyone to consider selecting a DPOA.
(One area of possible confusion: “DPOA” is used to refer to both the individual chosen and the document used to appoint the individual.)
Choose a DPOA wisely
Giving someone power of attorney means that individual has the right to make financial decisions in your place. For this reason, the DPOA must be chosen with care. Most people choose a trustworthy friend or relative. For people in their sixties and seventies, it makes sense to choose younger individuals, because peers may have their own health or memory issues that make it unwise to take on this responsibility.
There are also professionals who can be paid to serve as a DPOA. This is helpful for people who have no children. Or when there is no one else appropriate to take on the responsibility.
Once the choice is made and the individual agrees to be the DPOA, all that’s needed legally is to fill out a durable power of attorney form. You can download one from the Internet. The form needs to be signed and in most cases, notarized. Be sure to check what the form says is required.
Give the completed form to the DPOA to keep on hand. Also give copies to the bank, financial planner, and other institutions the DPOA may need to work with. (For instance, if your DPOA can make decisions regarding the sale of real estate or the paying of real estate taxes, it would be prudent to send a copy of the form to the land records office.)
Consider the counsel of an estate planning attorney. While you can fill out a DPOA form yourself, an attorney can give feedback about the choice of DPOA. Also, they can advise you regarding limitations that may be set on the individual’s ability to work with bank accounts only, or taxes, or real estate, or stocks. In addition, there are different circumstances outlined for when the DPOA can step in. An attorney can provide advice about all the options.
Giving someone power of attorney does not mean you lose control of your finances. You can continue to make all decisions and carry out all your transactions as usual. But if something happens and you do become incapacitated, the DPOA may act in your stead.
A durable power of attorney may be revoked at any time. Download a “notice of revocation,” complete the form, and have your signature notarized. (You may also need witnesses to attest to your mental state.) Then send the notice to each of the financial institutions you sent the DPOA forms to. You also need to send the revocation to the individual originally serving as your DPOA.
Why the word “durable” is important. This is one of those odd legalese confusions that underscores the wisdom of working with an attorney.
There is such a thing as “power of attorney”—no “durable” in front of it—which grants an individual the right to manage your affairs, unless you become incapacitated (for example, go into a coma or get dementia). At that point, they lose their authority. Because you are choosing this person to help you when you can’t make decisions for yourself—including if you get Alzheimer’s or go into a coma—you want to select the form that is “durable.”
Wills and living trusts: In the event of your death
The need to protect your partner is a key reason to get your financial papers in order. You will want to be sure that he or she is not left high and dry, especially if you are living with someone without being married. Inheritance laws do not acknowledge unmarried couples; thus, you must specifically stipulate your wishes regarding your house or other assets. This is particularly true for same-sex partners because surviving family members may not be aware of the partnership or may be unwilling to respect the union.
Everyone over age 18 should have a document that designates whom they want their assets to go to in the case of their death. Generally called a “will”, such papers also can describe who are to be the guardians of minor children in your custody. If you do not have a will, state law will divide your property according to its own formulas. It will even appoint a guardian for your children if their other parent is not able to care for them.
To be legal, a will must meet these requirements:
You must be mentally capable at the time that you create it.
The document must state specifically that it is your will.
You must sign and date the will in the presence of as many as three witnesses.
The witnesses must sign the will. They are not required to read the document. Their signatures simply affirm that they know it is you signing the will and that you were of sound mind when you created it. The people you choose to be witnesses should not be people who will be receiving assets from your estate.
It is advisable that you choose someone to be your estate’s executor—the person who will manage the distribution of your assets. Give a copy of your will to this individual and keep a copy at home and perhaps one in a safe deposit box.
After death, a person’s estate usually goes into probate, which can involve inheritance taxes and other expenses. It will also take time to distribute all the person’s assets. To spare survivors this ordeal as well as save on taxes, some people choose to make a revocable living trust. This document is similar to a will in that you can determine who receives what after you die. However, it is quite different than a will because you remove your name from your property while you are still alive and put all your assets into the trust.
The laws governing living trusts are very complicated; composing a living trust that truly meets your needs requires the skills of a lawyer. Not surprisingly, living trusts can be expensive. (Beware that there are many online living-trust scams that offer low-cost kits or paperwork. A trust really does need the personalization only an attorney can provide.) One advantage of a living trust is that you spend the money and devote the time to setting it up before you die or are incapacitated, thus sparing your survivors these expenditures. If your estate is not very large, however, a living may not be worth the expense.
I work for NBT Bank and Becky has worked with one of our clients for many years now. Her and her team go above and beyond the call of duty everyday to help her clients achieve the best quality of life possible. From coordinating doctor appointments, cleaning and repair services, making emergency visits, and assisting with many various tasks that have come up in the past several years. The team members truly take an interest in their clients lives and build a true relationship with them which makes such a positive impact. The exemplary and dependable service Inspire Care provides has greatly improved the quality of life of our mutual client and I'm sure of many others as well.The opinions and advice offered within this account are my own and do not reflect that of my employer NBT Bancorp or any of its primary business units.
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Provided an immediate, and long term, in-home care solution for our beloved relative—and eventually spearheaded the skilled nursing facility admission process. Provided highly professional and compassionate service and advice from start to finish.
Inspire Care was so wonderful to work with in my mother's final years. Becky was with us from the early days when we were looking for someone to share a few meals and leave a few in the fridge for our Mom who lived alone but was showing early signs of dementia, through a broken hip and eventual 24x7 care.Having an experienced team in Inspire Care to help us navigate was SO helpful during stressful times. They helped us find and work with agencies and businesses that we would have struggled to navigate without their experienced guidance.
We have cultivated such a wonderful partnership with Inspire Care. Becky, is extremely thorough with much attention to detail thatperhaps one thought wouldn't matter. The Inspire care Team leads with such professionalism and have such compassion for their clients. We value & embrace the partnership we have created the entire team .
I have known Becky Auyer and Inspire Care for over 10 years. I have recommended her to many friends and families.About 7 years ago, I hired her to help me with my parents. (I recall thinking I was a super hero, and I could do this well all by myself!)Early on, she helped me to navigate both of my parents getting off the road. That was a tremendous hurdle for our family and much needed for everyones safety.She helped us in the house with safety measures, meds, doctor appointments and check ins when I was away on travel.In 2017, my parents moved to senior apartment living. She helped us with that process, as well as helping us with mobility issues that both parents now had.Over the last 5 years, with COVID, my mother suffering numerous falls, rehab, and several hospitalization, Becky and her staff were always a phone call away. Becky, Gwen, Sharon, Deborah and Cheryl, all pitched in with daily treatments, showers, physical therapy, and sometimes taking turns at the hospital. This gave me so much comfort knowing they could help me in so many ways.During the 1st 6 months of 2022, both of my parents died at home with hospice, family, and the Inspire Care team helping us every step of the way.In a lot of ways, these last 12 years was the toughest job I ever had. I don't regret it, but I know I couldn't have done as well as I did without Inspire Care by my side until the end.
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