DISCUSS END OF LIFE DECISIONS

It may seem a little awkward getting started, but we need to talk about it and prepare.

Filed in Estate Planning, on July 18, 2017

The “Conversation”

Have you had the “conversation” with your spouse or parents regarding how they would like to spend their senior years? Does it seem a little awkward getting started? The purpose of this article is to encourage you (or a loved one) to think and talk about some of the hard topics we all have to face as we approach our senior years. These hard topics include addressing questions like:

  • Where will I live?
  • Who will I live with?
  • What if I cannot live independently?
  • Who will take care of me when I can no longer take care of myself?
  • Will I have to live in a nursing home?

This is just the tip of the iceberg. When you think you have the answers to all of the questions, circumstances change, and you may find that your answers change as well. Answering these questions should be an ongoing process, rather than something that is thought about only when we are in the throes of a health crisis. Looking at this as an ongoing process may frighten you or make you feel uncomfortable. In reality, who enjoys contemplating our own mortality on a repeating basis? After all, most young people never think they will die and many seniors do not like to face the inevitable as it creeps closer and closer.

You don’t have to address every aspect of deciding what your wishes are or obtain all of the pertinent information from a loved one during the first conversation. If we actually break down this “ongoing process” into smaller sections, the task of tackling this subject becomes a little easier. My hope is that the information contained in this article will help you start the discussion.

Section I: The Players

Who? Decide who you want to have the conversation with. Who are you most comfortable with discussing your healthcare and your end of life decisions? It may be your spouse, your children, your parents, your friends or all of the above. It may be none of the above. You may find it easier to talk to a stranger about these decisions.

When? Along with considering the players, think about when you want to have this discussion. Give yourself a deadline to make sure you don’t keep putting it off. It can be a specific date or at a milestone in your life. Make a date with your loved one or other person to at least start the conversation.

If you are having the conversation with a loved one, think about who you believe is closest to the person to him or her. For example, maybe you think your mother’s best friend should participate. Talk to her and see if she has discussed her wishes for care with her family and who she included. If she has, perhaps she can encourage your mother to start thinking about who she wants to include in her conversation.

Section II: Contemplation

The next step is where we start to get into the “nitty-gritty.” What is most important to you when thinking about your sunset years? What do you value most? Your independence? What are the things you don’t want to live without? What are the things you don’t need or want? Who do you want around you? Are the answers to these questions different if you have dementia versus heart disease?

The last question contemplated in this section should be “what matters MOST to me when thinking about dying is __________________.” What kind of treatment do you feel is worth pursuing and what is not? Are there some medical treatments that you consider worse than death?

There can be more questions – questions you come up with on your own. Every situation is unique, and you may need to consider additional issues.

If you are trying to have the conversation with a loved one about their care, consider starting out the discussion with something like “I need you to help me with something.” You can then ask him or her the same questions you would contemplate for yourself.

Section III: Reality Check

“Where do you think you will be living before or when you die?” This is where some people try to start the discussion. Since this is a very sensitive topic, you might not want to jump right in. I find many elderly people “turn off” during this part of the conversation by saying “I will never die in a nursing home” or “I’m going to die a quick death.”

We need to face the facts. The chances are higher for a person to die in a place other than their own home. According to the Centers for Disease Control, 70% of people die in a hospital, nursing home or long-term care facility. Additionally, according to the U.S Department of Health and Human Services, someone turning age 65 today has almost a 70% chance of needing some type of long-term care services in their remaining years. And 20% of those who do need long-term care, need it for longer than 5 years.

Even if your loved one “turns off,” give them a reality check. Remind them that although we would all like to die at home, chances are higher that we won’t. Do you want bet on odds that you will die at home or never need long-term care, knowing that 70% of the time, you will lose that bet? Why take that chance when you can communicate your wishes now when you are able?

Section IV: The Financial Reality Check

Can you afford NOT to die at home? Now that you have discussed the fact that you or your loved one probably will not die at home, what happens when he or she (or you) needs to stay in a nursing home or long-term care facility for any amount of time? In Illinois, the average rate for nursing home or long-term care is between $6,000 and $8,000 per month. This will cost between $72,000 and $96,000 per year. How long will your retirement savings cover this kind of expense? According to Forbes magazine, a 65 year old has an average 401(k) balance of between $25,000 and $100,00. The stark reality is that most seniors who do need care in a nursing home or a long-term care facility cannot afford this expense, and will ultimately have to rely on public aid in order to pay for their care.

When talking with SOME nursing homes, you will find that many will tell you that they will help you or your loved one qualify for public benefits. What they are saying is true, HOWEVER, the nursing home does not necessarily have you or your loved one’s financial best interests in mind. The longer you are not eligible for public benefits, the longer you pay the nursing home the private pay rate out of your own pocket.

This is not to say that there are no nursing homes that recognize and understand some seniors cannot afford to “spend down” all of their money. Some facilities actually refer clients to elder law attorneys before they spend down all of their assets.

But you’ve heard that you have to be poor to qualify for Medicaid benefits. Well, that is true. HOWEVER, you can, legally, take advantage of the rules and make them work more to your benefit. This is not “gaming” the system. It’s more like calling in the loan you have provided to the government through all of the tax dollars you put into the Medicaid system.

There are certain exemptions you can take advantage of when determining your eligibility for benefits:

  • if your spouse lives at home but you need to be in a nursing home or skilled nursing facility, your spouse is allowed to have $109,560 in assets in his or her name
  • if your spouse lives at home, in most cases, the house is exempt
  • one car is exempt (with restrictions)
  • pre-paid funeral expenses are exempt (with restrictions)
  • the applicant for benefits may have $2,000 in his or her name
  • the applicant may have $30 or $90 (veterans) per month from income for personal expenses

There are also certain planning strategies you can take advantage of, depending on how quickly you or your loved one needs to apply for benefits. The key question to answer before you decide on a planning strategy is “will I (or my loved one) need to move into a nursing home or skilled nursing facility within the next 5 years?” Why is 5 years the magic number? Because that is the look back period the State examines when determining whether it will assess a penalty (a period of time that you will not be eligible for benefits because you did something “improper” with your money) against you.

If the answer is yes, I believe I will need a nursing home within the next 5 years, you probably need to start thinking about “crisis” planning. This limits the choices you or your loved one have in protecting assets. Although the choices are limited, always remember, you do have choices. Talk to an elder law attorney.

If the answer is no, you need to start thinking ahead about the choices available to you or your loved one. There are planning vehicles, such as an irrevocable trust, you can utilize that have the potential for saving ALL of your assets. Talk to an elder law attorney.

Section V: Write it down

Remember all the questions you asked in Section II? Write down your answers. Talk to your family about it. Talk to your estate planning attorney or an elder law attorney about incorporating your answers into your estate planning and/or advance directives.

To sum it up, we all need to have this conversation sooner, rather than later. You will find, over the years, as your focus and priorities change, the answers to the questions may change. This is exactly why we need to this conversation more than once in our lifetimes. The time to address these issues is now; not when you or your loved one is in the middle of a health crisis. Trust me, you will be glad you did it.

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