A lot has been in the news lately about shark attacks here on the North and South Carolina coast. I’m in Shelby, North Carolina and I don’t know if I want to get eaten up by the sharks when I go to the beach.
You don’t know there’s a shark in the water until it bites you.
There are 465 different types of sharks out there. They can detect blood in the water from 3 miles away.
You have a 1 in 3,748,067 chance of being bitten by a shark or being killed by a shark. You have a better chance of being killed by lightning or by fireworks.
Now, those are just a few little shark facts I picked up watching Shark Week with my daughters.
What I know a lot more about is the sharks that are out there for seniors.
So there are some warning signs. What are the warning signs? The fin, the media reports. I tell you what the media ought to be reporting about, is the roadblocks and the sharks that are out there for seniors in the water, which are long-term care situations, nursing home care, assisted living care, not having their powers of attorney in place, healthcare power of attorney in place.
And losing hard earned money and property that they’ve worked for their entire life because they’re not prepared to pay for it and their assets aren’t protected adequately. So that’s the sharks that are really out there in the water.
Chances of Needing Long Term Care
There’s a 70% chance or 7 out of 10 chance, if I do a speaking event, I’ll have 10 seniors stand and I’ll have 3 sit down, the ones that are left standing are going to need some type of long-term care. There’s a 70% chance according to a US Department of Health and Human Services that seniors will need some type of long-term care during their life. Long-term care is in-home, assisted living, or nursing home care.
Difference in Medicare and Medicaid for Long Term Care
Let’s talk a little bit about Medicare and how that works. So when you’re over 65 and you obtain Medicare, that’s going to take care of any emergency costs and most routine procedures that you have.
Is long-term care expensive?
It’s extremely expensive to pay for long-term care. Now there’s long-term care insurance. I’m not an insurance agent, I’m an attorney. But if I sit down with you or an elder law attorney sits down with you as an advisor, we’d need to take a look at whether you have a long-term care piece in place.
That’s a great way. I call it a unicorn, because I rarely see it. That’s a great way to protect your hard-earned money and property, is to make sure that you have a policy in place for 3 to 5 years. They usually come in 3 or 5 year pay outs for Long Term Care.
So they’ll pay out for 3 or 5 years. So much per day. And you want to look at how much they’re paying out per day and compare that with your local long-term care provider, so your nursing homes and assisted living facilities. You also want to be really clear on whether it’s providing for in-home care.
You might not think it’s really a great thing to go to an institutional setting and might want to be taken care of at home by an in-home care provider like Gentiva or Bayada. Those are some good and reputable names in the industry.
So yes, the insurance is relatively expensive. And so is the care, but it’s a great thing to have and I think worth every penny. There are hybrid products out there, which are long-term care annuities and life insurance with long-term care riders, which you can apply for even as you get older and have health problems.
Now, a Long Term Care annuity would be where you took a specific amount of money and put it in that annuity and it payed out triple to five times as much as you place in there. And you could have a beneficiary on that product that goes directly to your child if it’s unused.
But it’s a great place to put some money or part of your assets and savings to make sure you protect the home and the rest of the retirement nest egg.
So Medicare will pay for 20 days.
Medicare will pay for 20 days of care. After that, if you’re in a rehab or a nursing home facility, it’ll pay for 20 days. It’s not going to pay for over 20 days. If you have a private supplement that you pay for to supplement your Medicare policy, then that will pay for an additional 80 days. So that’s 100 days cumulative that you can get paid for under the current rules.
That’s as long as your prognosis is getting better, of recovery, of rehab, rehabilitation. Once it goes to the, you’re not going to get any better, if that’s what the doctor says, you’re going to need this care for life, then they’ll stop paying even during the 100 days.
Do you know who pays after that 100 days? You do.
The senior does. You pay out of pocket.
I was doing a radio show a couple of weeks ago and I had a caller who called in and said they had been paying about $97,000 a year for nursing home care. They said with other costs, it was over $100,000 a year. Well, that can spend down a large estate rather quickly. So be conscious of that.
If you have 500,000, $750,000 saved for retirement, at $100,000 a clip, what’s left for the healthy spouse. A $100,000 per year, that will spend that down very quickly.
That’s something we want to prevent. With a little preplanning with an elder law attorney, you can put in place deeds to save the home. Because once the money’s spent down, there’s going to be a lien placed on the house to come and collect the house once that person passes away.
And we don’t want that to happen. Through some deed planning, like Ladybird deeds, those are good keywords and questions to ask your elder law attorney. Ladybird deed beats the five year lookback period for Medicaid. And passes the house directly to the intended beneficiary. Much like that life insurance policy that I was talking about that has a beneficiary on it.
The financial industry is way ahead of the legal industry on this. And you can pass life insurance directly to a beneficiary outside of the estate, so no liens could possibly attach. And that’s what we want to do.
So put on your shark repellant, get in the shark cage, and go see an elder law attorney to talk about these issues. Avoid those shark infested waters altogether by preplanning.
You could be in the middle of the sharks if you wait and it is better to be safe than sorry.
You’re could be in a crisis situation, is what I talk about. Motivated by fear and not motivated by logic. When you’re already in a crisis situation, in a spend-down, we could help you there too. But I would rather see people plan ahead.
Time is your enemy, by waiting. You’re just sitting there waiting for the shark to get you, I guess. So take care of business beforehand. Take care of business beforehand.
And also, cost are more in a crisis situation, to move assets, to protect assets. You’re shark bait… Don’t wait and be shark bait. PLAN AHEAD!!!
Call me if you have any questions:
Elder Law Attorney
McIntyre Elder Law
123 W. Marion Street, Shelby