Category Archives: Long-term Care Directive

Alzheimer’s Treatment: Non-Drug Therapies That Can Help

Written by Evan Farr

There are treatments available now that most families coping with Alzheimer’s or other dementia never hear about that can significantly improve their quality of life.

Called non-pharmacologic therapies (NPTs), these treatments do not come in a pill. Instead, NPTs such as personal counseling and occupational therapy-based strategies are proven to improve the quality of life for people with dementia and their families. NPTs support families and teach them the skills they need to protect their own health and cope with the intense demands of caregiving and help people with dementia stay independent and safe for as long as possible. Some of the NPTs currently used are proven programs that are actually more effective than any known drugs for Alzheimer’s disease.

One example of an NPT, developed at NYU, includes individual and family counseling to reduce conflict and improve communication among family members. Those caring for a spouse with dementia who received the NYU Caregiver Intervention were more satisfied with social support and less depressed, less bothered by difficult behaviors, had better physical health and were able to keep their ill spouses at home longer than those receiving usual care.

Another model developed at Thomas Jefferson University in Philadelphia, employs occupational therapists to assess the patient with dementia and identify preserved capabilities as well as the caregiver’s needs. Families are then provided with strategies to manage day to day care, such as communication techniques, safe-proofing the home, establishing daily routines and engaging the individual with dementia in meaningful activities. Families who participated have reported feeling more confident and less upset, and found that their ill family member functions better and exhibits fewer challenging behaviors.

Another NPT that is now being used is a stimulator device surgically implanted into the brain of a patient in the early stages of Alzheimer’s disease. The implanted device is seen as a possible means of boosting memory and reversing cognitive decline, and has already been used in thousands of people with Parkinson’s. The surgery involves drilling holes into the skull to implant wires into the fornix on either side of the brain.  The wires are attached to a pacemaker-like device, which stimulates the brain with tiny electrical impulses generated 130 times a second. The patients don’t feel the current.

Lastly, another effective non-drug Alzheimer’s treatment used to jog memory is music. In nursing homes that use music, the personalized playlists are often meaningful songs chosen by loved ones.  According to Alzheimer’s experts, music helps patients become more alert, more cooperative, more attentive, and more engaged. In many cases, even if they can’t recognize loved ones and they’ve stopped speaking, when the patients hear music, they “come alive”.

Geri Hall, a clinical nurse specialist at the Banner Alzheimer’s Institute, explains how music activates a part of the brain that stays active despite the dementia. “There is something about music that gets through to Alzheimer’s patients right up until the very end of the disease,” she said, adding that “familiar music from the past can help people with dementia feel at home. It calms them, increases socialization, and even decreases the need for mood controlling medications.” Read our blog post about Alzheimer’s and Music.

Alzheimer’s slowly robs its victims of a lifetime of memories and the ability to perform simple daily tasks.  Instead of focusing on drug treatments, many of which have failed in clinical trials, it may be a good idea to try non-drug treatment options. These programs have been proven effective in randomized controlled trials. And, unlike drug therapy, there are no adverse side effects. There is also an economic argument to be made for better caregiver support. Nearly 11 million family and other unpaid caregivers provided an estimated 12.5 billion hours of care to people with dementia. This care is valued at nearly $144 billion. The country can’t afford the consequences of these caregivers becoming too burned out or sick to carry on. See our recent blog post about the rising cost of dementia.

Moving a person with dementia to a nursing home, while sometimes unavoidable, is expensive. The NPTs described have helped to delay nursing home placement for more than a year. Unfortunately, you cannot delay the inevitable forever, but what you can do is plan ahead for you and your loved ones. Do you or a loved one need nursing home care in the near future or are you looking to plan ahead? Call 703-691-1888 to make an appointment for a no-cost consultation at The Fairfax Elder Law Firm of Evan H. Farr, P.C.  We can meet with you, access your situation and determine strategies for your long-term care plan.

Planning for Long-Term Care (Part 5)

Written by Evan Farr

The Veteran’s Aid and Attendance Pension Benefit

The best advice that I can give you when planning for long-term care is not to delay. We never know what the future holds. While we are able, we must prepare for a variety of situations, and so it is imperative not just to plan for long-term care, but to plan properly.

Part 1 of this five part series began showing why establishing a good Long-Term Care Plan is a necessary and urgent matter. Part 2 outlined the three most essential documents found in a good Long-Term Care Plan and Part 3 explained how long-term care insurance might enhance that plan. The last installment, Part 4, discussed how a trust that is unique to our firm, the Living Trust PlusTM Asset Protection Trust, can protect your assets from the hassles and expenses of probate PLUS the expenses of long-term care. The Living Trust PlusTM is the only type of self-settled asset protection trust that allows a settlor to retain an interest in the trust while also protecting the assets from being counted according to state Medicaid laws. What I have just described is the single most prominent feature of the Living Trust PlusTM and it is also what makes this type of trust be the preferred form of asset protection for most people.

The final installment of this series will now discuss an under-utilized, special monthly pension benefit available to wartime veterans and surviving spouses of deceased wartime veterans who are incapable of self-support and in need of regular personal assistance.

Who Is Eligible for the Veteran’s Aid and Attendance Pension Benefit?

To receive the Veteran’s Special Pension Benefit for Aid & Attendance, a veteran must have served on active duty, at least 90 days, at least one day of which occurred during a period designated as wartime.

 Periods Designated As Wartime:

  • World War II — December 7, 1941 through December 31, 1946
  • Korean Conflict — June 27, 1950 through January 31, 1955
  • Vietnam Era — August 5, 1964 through May 7, 1975; for veterans who served “in country” before August 5, 1964, February 28, 1961 through May 7, 1975
  • Gulf War — August 2, 1990 through a date to be set by law or Presidential Proclamation

There must have been a not dishonorable discharge. If younger than 65, the veteran must be totally disabled. If age 65 and older, there is no requirement to prove disability. However, the veteran or spouse must be in need of regular aid and attendance due to: inability of claimant to dress or undress, or to keep clean and presentable; frequent need of adjustment of any special prosthetic or orthopedic appliances which by reason of the particular disability cannot be done without aid (this will not include the adjustment of appliances which normal persons would be unable to adjust without aid, such as supports, belts, lacing at the back etc.); inability to eat due to loss of coordination of upper extremities or through extreme weakness; inability to attend to the wants of nature; or incapacity, physical or mental, which requires care or assistance on a regular basis to protect the claimant from hazards or dangers incident to his or her daily environment.

Not all of the disabling conditions in the list above are required to exist. It is only necessary that the evidence establish that the veteran or spouse needs “regular” (scheduled and ongoing) aid and attendance from someone else, not that there be a 24-hour need.

Determinations of a need for the aid and attendance is based on medical reports and findings by private physicians or from hospital facilities.

What Is the Amount of the Aid and Attendance Benefit?

Effective December 1, 2011, the Veterans A&A Pension can provide:

  • $20,447 per year (~$1,704 per month) for a qualified veteran;
  • $24,239 per year (~$2,020 per month ) if the veteran is married;
  • $13,138 per year (~$1,095 per month ) for a surviving spouse of a qualified veteran;
  • $31,578 per year (~$2,631 per month ) if both spouses are qualified veterans.

Is Aid and Attendance Only For Low Income Veterans?

No, and this is the primary reason that this benefit is so widely misunderstood. If you speak to a Veterans Service Representative in a regional VA office and ask them about the Veterans Aid and Attendance benefit, they will typically ask for your household income. When you tell them your household income, they will compare it to a chart and most often tell you that you earn too much income to receive the benefit. While the information they provide may be technically accurate, what they typically don’t explain is the “income” for Veterans Administration purposes (sometimes called IVAP or “adjusted income”) is actually your household income minus your recurring, unreimbursed medical and long-term care expenses. These allowable, annualized medical expenses are such things as health insurance premiums, home care expenses, the cost of paying a family member or other person to provide care, the cost of adult day care, the cost of an assisted living facility, or the cost of a nursing home.

To be able to receive the Veterans Pension with Aid and Attendance benefit, the veteran household cannot have adjusted income (i.e., household income minus unreimbursed medical expenses) exceeding the Maximum Allowable Pension Rate — MAPR — for that veteran’s Pension income category. If the adjusted income exceeds MAPR, there is no benefit. If adjusted income is less than the MAPR, the veteran receives a Pension income that is equal to the difference between MAPR and the household income adjusted for unreimbursed medical expenses. The Pension income is calculated based on 12 months of future household income, but paid monthly.

How is the Aid and Attendance Benefit Calculated?

The monthly award is based on VA totaling 12 months of estimated future income and subtracting from that 12 months of estimated future recurring, unreimbursed medical expenses. Allowable medical expenses are reduced by a deductible to produce an adjusted medical expense which in turn is subtracted from the estimated 12 months of future income.

The new income derived from subtracting adjusted medical expenses from income is called “countable” income or IVAP (Income for Veterans Affairs Purposes). This countable income is then subtracted from the Maximum Allowable Pension Rate — MAPR — and that result is divided by 12 to determine the monthly income Pension award. This cash benefit is paid in addition to the family income that already exists.

Filing a Claim

Filing a claim for the Veterans Aid and Attendance Pension Benefit is complex and time-consuming. If you want to do it correctly, it’s important to get qualified assistance. Just knowing which form to fill out and how to complete it is a complex endeavor in itself. Even if the proper form is completed, failure to check a single box may result in a complete denial of your claim.

The application process involves: obtaining evidence of prospective, recurring medical expenses; appointments for VA powers of attorney and fiduciaries; and a thorough understanding of the application process. Often, qualification for this benefit involves reallocation of assets and shifting of income in order to qualify, and these re-allocations may have significant impact on Medicaid eligibility.

Given that many veterans who need the Aid and Attendance Benefit will eventually wind up also needing Medicaid, this process should not be attempted without the help of a qualified elder law attorney who thoroughly understands both the Veterans Aid and Attendance Benefit and the Medicaid program, as well as the interaction between these two benefit programs.

We assist Level 4 clients of our firm, at no charge, in completing the required paperwork.

Conclusion

Evan H. Farr is an Accredited Attorney with the U.S. Dept. of Veterans Affairs, and the Farr Law Firm is an Elder Law and Estate Planning Firm that helps Veterans and their spouses obtain the financial assistance to which they are entitled. If you are a Veteran or spouse of a Veteran and you need assistance in your home, or are living in or considering moving into an Assisted Living Facility or Continuing Care Retirement Community, please contact us to see if you might qualify for the Veterans Aid and Attendance Special Pension Benefit. Call us today and take the first step towards gaining the peace of mind that comes with a good Long-Term Care Plan. 

If You’d Like More Information About Veterans Aid & Attendance,
Please Fill Out the Form Below to Receive our Veterans Aid & Attendance Special Report!

Planning for Long-Term Care (Part 4)

Written by Evan Farr

The most important thing that you can do in planning for future contingencies is to act now. The future may hold limited resources or health problems for you and either one of these may prevent you from taking care of the things that you can easily achieve today.

In Part 1 of this series, I showed how making a good Long-Term Care Plan is an urgent and necessary step in preparing for the future. In Part 2, I outlined the three most essential documents found in that plan, namely, a General Power of Attorney, Advance Medical Directive with a Long-Term Care Directive and a Lifestyle Care Plan. In the last installment, Part 3, I discussed using long-term care insurance as part of a Long-Term Care Plan.  As we saw in Part 3, Virginia’s Long-Term Care Insurance Partnership Program offers government-endorsed “Medicaid Asset Protection” to consumers who buy long-term care insurance.
Part 4 will now discuss how our Living Trust PlusTM Asset Protection Trust can protect you from probate (as does a Revocable Living Trust) PLUS protect you from the expenses of long-term care.

You Can’t Afford to Ignore Long-Term Care Expenses

Whether you’re rich, poor, or somewhere in between, you cannot afford to ignore the potentially devastating costs of nursing home care and other types of long-term care. Nursing homes are the most likely and one of the most expensive creditors that most Americans are likely to face in their lifetimes. Remember the following statistics that I cited in Part 1 of this series:

  • About 70% of Americans who live to age 65 will need long-term care at some time in their lives, over 40 percent in a nursing home.
  • As of 2008, the national average cost of a private room in a nursing home was $212 per day or $77,380 per year.
  • The average person age 65 today will need some long-term care services for three years. Women need care for longer (on average 3.7 years) than do men (on average 2.2 years). Twenty percent of them will need care for more than five years.
  • Long-term care is not just needed by the elderly. A recent study found that 46 percent of group long-term care claimants were under the age of 65 at the time of disability.

Contrast the above long-term care statistics with statistics for automobile accident claims and homeowner’s insurance claims:

  • Between 2005 and 2007, an average of only 7.2% of people per year filed an automobile insurance claim.
  • Between 2002 and 2006, an average of only 6.15% of people per year filed a claim on their homeowner’s insurance.

Revocable Living Trusts Don’t Help

A revocable living trust is a wonderful tool to protect your assets from the expenses of probate, but it does not protect your assets from the expenses of long-term care while you’re alive. Because you have 100% unlimited access to the funds in a revocable living trust, so do your creditors, including nursing homes and State Medicaid programs.

Living Trust PlusTMProtect Assets from Probate PLUS Lawsuits PLUS The Expenses of Long-Term Care

In response to this limitation of revocable living trusts, I have developed a unique solution – a special type of irrevocable trust called the Living Trust PlusTM that functions very similarly to a revocable living trust but protects your assets from the expenses and difficulties of probate PLUS lawsuits PLUS the expenses of long-term care while you’re alive, in addition to a multitude of other financial risks during your lifetime. The Living Trust PlusTM protects your assets from lawsuits, auto accidents, creditor attacks, medical expenses, and — most importantly for the 99% of Americans who are not among the ultra-wealthy — from the catastrophic expenses often incurred in connection with nursing home care. For most Americans, the Living Trust PlusTM is the preferable form of asset protection trust because, for purposes of Medicaid eligibility, this type of trust is the only type of self-settled asset protection trust that allows a settlor to retain an interest in the trust while also protecting the assets from being counted by state Medicaid agencies.
Even though the Living Trust PlusTM is “irrevocable,” it can still be terminated so long as all interested parties (typically you and all of your beneficiaries) agree to terminate it. Additionally, you remain in control of your assets because:

  • you can be the trustee if desired;
  • you retain the right to receive all of the trust income;
  • you retain the right to live in and use your real estate;
  • you retain the right to change trustees; and
  • you retain the right to change beneficiaries.

The Living Trust PlusTM has no effect on your income or your income taxes.
If you’re a client or potential client who would like more information about the Living Trust PlusTM, please call us at 703-691-1888 to contact us for an appointment, visit the Living Trust PlusTM web site at http://www.livingtrustplus.com or click here to register for one of our upcoming Living Trust PlusTM informational seminars.
If you’re an attorney interested in more information about the Living Trust PlusTM or interested in the possibility of licensing the Living Trust PlusTM Asset Protection System, visit the Living Trust PlusTM web site at http://www.livingtrustplus.com and click on the link labeled “For Attorneys.”


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Planning for Long-Term Care (Part 2)

Written by Evan Farr

“Long-Term Care” refers to the broad spectrum of medical and support services provided to persons who have lost some or all capacity to function on their own due to a chronic illness or disabling condition, and who are expected to need such services over a prolonged period of time. Long-term care can consist of care in the home by family members (assisted by voluntary or employed help), adult day health care, or care in assisted living facilities or nursing homes.

In Part 1 of this series I mentioned that 60% of us will need long-term care at some point in our lives. When this statistic is put in perspective with the relatively low likelihood of making an automobile or homeowner’s insurance claim, the risk that you or I will need long-term care at some point in the future is shocking. Unfortunately, the majority of Americans are either unaware of these statistics or refuse to plan for the often catastrophic costs of long-term care. Part 1 of this series outlined the necessity to create a good Long-Term Care Plan in addition to, or as part of, your Estate Plan; Part 2 will now discuss the three most essential documents found in a good Long-Term Care Plan, as well as two additional documents that are often also part of a Long-Term Care Plan.

General Power of Attorney

A General Durable Power of Attorney (POA) containing Asset Protection Powers is the first essential document. Not all POA’s are created equal; it is crucial that this document be prepared by a knowledgeable and experienced Elder Law Attorney. One way to ensure the qualifications of your attorney is to look for one who is Certified as an Elder Law Attorney by the National Elder Law Foundation, the only organization accredited by the American Bar Association to certify lawyers in the specialty area of Elder Law. For a list of Certified Elder Law Attorneys, please visit http://www.nelf.org/findcela.asp.

A POA (always “durable” when used in connection with estate planning and long-term care planning) authorizes your “Agent,” sometimes called an “Attorney in Fact,” to act on your behalf and sign your name to legal and financial documents. It is an essential tool in the event that, due to age, illness, or injury, you are unable to carry on your legal and financial affairs. Asset Protection Powers written into the POA are essential in order for your Agent to protect your assets from the often-catastrophic expenses of long-term care. Attorneys who are not experienced Elder Law Attorneys often fail to put these essential Asset Protection Powers into the POA.

A properly-drafted POA is designed to avoid the need to go through a court-supervised conservatorship proceeding, which is a time consuming, expensive, and publicly embarrassing process whereby someone goes to court to have you declared incompetent and to be appointed as your Conservator. The Conservatorship process is often referred to as a type of “living probate” because the Conservator is subject to all the rules of the probate court, including the onerous requirement of filing annual accountings with the Court. State laws vary regarding the use and acceptance of a power of attorney.

Advance Medical Directive

The second essential document in a good Long-Term Care Plan is an Advance Medical Directive (AMD) containing a Long-Term Care Directive. As with General Powers of Attorney, every lawyer drafts AMDs differently, and most attorneys do not include a Long-Term Care Directive within the AMD. Therefore, it is again in your best interest to have your AMD written by an attorney who specializes in long-term care planning, such as a Certified Elder Law Attorney.

An AMD (also called a Medical Power of Attorney or a Health Care Power of Attorney) authorizes another person (called your “Medical Agent”), to make decisions with respect to your medical care in the event that you are physically or mentally unable to do so. This document includes the type of provisions that used to be in what was commonly called a “Living Will,” allowing you to indicate your wishes concerning the use of artificial or extraordinary measures to prolong your life in the event of a terminal illness or injury. In the AMD you will also appoint a “Medical Agent” and give that person the power to consent to medical and health care decisions on your behalf with regard to providing, withholding, or withdrawing a specific medical treatment or course of treatment when you are incapable of making or communicating an informed decision on your own behalf. A comprehensive AMD will also allow you to indicate your wishes with regard to organ donation, disposition of bodily remains, and funeral arrangements.

A properly-drafted AMD is designed to avoid the need to go through a court-supervised guardianship proceeding, which is a time consuming, expensive, and publicly embarrassing process whereby someone goes to court to have you declared incompetent and to be appointed as your Guardian, typically at the same time they are requesting appointment as your Conservator.

Long-Term Care Directive

Most importantly for your Long-Term Care Plan, your AMD should include a Long-Term Care Directive (or this could be drafted as a separate document), which will allow you to make your desires known in the event you need long-term care in the future. For instance, do you want to remain at home and receive home-based care as long as possible, regardless of cost, even if it drastically reduces or entirely depletes your estate? Or would you prefer to remain at home and receive home-based care only if it doesn’t drastically reduce or entirely deplete your estate? If nursing home care is absolutely required, would you like to protect as much of your assets as can be legally protected so that you can qualify earlier for publicly-funded Medicaid benefits? If so, do you prefer that the protected assets be used to enhance your quality of care, or to provide an inheritance for the beneficiaries of your estate?

In order to be easily accessible when needed, your AMD should be registered with an electronic archive service that can immediately fax the document to any desired destination. Some Elder Law Attorneys, including our firm, provide such registrations to clients at no charge.

Lifestyle Care Plan

The third essential document that is found in a good Long-Term Care Plan is a document called a Lifestyle Care Plan, also known as an Advance Care Plan.  The Lifestyle Care Plan is a document that is created by special software that gathers, organizes, stores and disseminates information provided by you in an interview, in order to guide those who you will depend or for future care. The Lifestyle Care Plan identifies your specific needs, desires, habits and preferences and incorporates all of this information into a document that your future caregiver can use to provide you with the best possible long-term care.

As an example, Alice wrote in her Lifestyle Care Plan that if Alzheimer’s disease or some other type of dementia inhibited her mental abilities to communicate or recognize her surroundings, she wished to be in a respectable facility and only asked that she be visited and brought chocolates. To her children this request seemed silly at the time, but when her mental capacities did diminish, the instructions were there. No one had to wonder if they should try to take care of Alice at home and how they would do it. Without guilt or question they placed her in a respectable facility that took care of her needs. All they had to do was make loving visits, and of course they brought chocolates.

Because of the importance of the Lifestyle Care Plan, the Farr Law Firm provides one to all of our clients as part our comprehensive Long-Term Care Planning services. To learn more about the benefits of having an Advance Care Plan, please click here or visit our Web site at:  www.farrlawfirm.com/advance-care-plan.htm

Living Trusts

A good Long-Term Care Plan will always include the three documents mentioned above, and will typically also include a Living Trust — either a Revocable Living Trust (RLT) or the  Living Trust Plus™ (LTP).

An RLT generally provides for the creator of the trust to have full use of the trust income and principal for life. On the death of the creator, the assets may continue to be held in trust (or may be distributed) for the benefit of the named beneficiaries, such as the grantor’s children. Although the most important benefit of the RLT is to avoid probate, a well-drafted RLT also can help protect from incapacity and can therefore be an important part of a Long-Term Care Plan. Similar to a General Power of Attorney, an RLT can provide uninterrupted management of your assets by your trustee if you become incapacitated, sparing you and your family from having to go through the expense and complexities of a court-appointed conservatorship. It is important to note that an RLT does not protect your assets from the expenses of long-term care. On the contrary, the assets in an RLT must be spent, if necessary, in providing long-term care, even if that means spending down all of the assets in the RLT to provide such care. For more information on RLTs, please click here or visit our Web site at: www.farrlawfirm.com/revocable.html

The Living Trust Plus™ is a living trust that is designed to protect your assets from probate PLUS lawsuits, PLUS nursing home expenses.  In other words, the LTP protects your assets from the complications and hassles of probate and from other financial risks, including the threat of lawsuits, auto accidents, creditor attacks, extended hospitalization, and — most importantly – the catastrophic expenses associated with nursing home care. Part 4 of this series will explore the LTP in detail.

Conclusion

A good Long-Term Care Plan will always include a General Power of Attorney, Advance Medical Directive, and Advance Care Plan, and will typically also include a Living Trust — either a Revocable Living Trust or the Living Trust Plus™.   However, as mentioned in Part 1, these essential legal documents are only part of the requirements for a good Long-Term Care Plan. The other important component is a plan for how to pay for long-term care. The next installment in this series will discuss protecting your assets by purchasing long-term care insurance.

The Farr Law Firm specializes in long-term care planning and we would be happy to assist you in your preparations. Please visit us at www.VirginiaElderLaw.com or call us at 703-691-1888.

Planning for Long-Term Care (Part 1)

Written by Evan Farr

Are you one of the millions of Americans over age 50 who has not yet started planning for long-term care?

As financially responsible adults, most of us are prepared for some unexpected disasters – we pay for health and property damage insurance, and many of us have taken some steps toward funding for our retirement. But very few of us have prepared for one of the most devastating of unexpected events – the need for long-term care. According to most estimates, more than 60% of us will need long-term care at some point in our lives. If you are a member of the “sandwich generation” – responsible for an older parent – the odds that either you or your aging parent will need such care are even higher, and the costs to your lifestyle, finances, and security can be catastrophic. Consider the following long-term care statistics:

• About 70% of Americans who live to age 65 will need long-term care at some time in their lives, over 40 percent in a nursing home.
• As of 2011, the average cost of a nursing home in Northern Virginia was over $100,000 per year.
• A recent insurance company study found that 46 percent of its group long-term care claimants were under the age of 65 at the time of disability.

Contrast the above long-term care statistics with statistics for automobile accident claims and homeowner’s insurance claims:

• An average of only 7.2% of people per year file an automobile insurance claim.
• An average of only 6.15% of people per year file a claim on their homeowner’s insurance.

The need for long-term care drastically alters or completely eliminates the four principal retirement dreams of elderly Americans:

1. Remaining independent in the home without intervention from others
2. Maintaining good health and receiving adequate health care
3. Having enough money for everyday needs
4. Not outliving assets and income

Unfortunately, the reality is that the majority of Americans make no plans for long-term care. Not only does this lack of planning affect older Americans, but it also often has an adverse effect on the older person’s family, with sacrifices made in time, money, and family lifestyles. The stresses of being a caregiver for an older parent often result in a deterioration of the caregiver’s own physical and emotional health. Because of changing demographics and improved health care, the current generation — more than ever — needs to actively plan for long-term care.

So what are basics of a good Long-Term Care Plan? First and foremost are two critical documents that need to be prepared by an experienced and knowledgeable Elder Law Attorney. These two essential documents are:

• A Financial Durable Power of Attorney containing Asset Protection Powers; and
• An Advance Medical Directive containing a Long-Term Care Directive.

The third essential document, which you can prepare on your own, is a Lifestyle Care Plan.

Part 2 of this article will explain and explore these three critical documents to give you a greater understanding of the need for and importance of these vital long-term care planning instruments.

These essential legal documents, however, are only part of the requirements for a good Long-Term Care Plan. The other important component is a sound financial plan for how to pay for good long-term care. There are three primary ways to plan in advance for how to pay for long-term care: (1) build up your income and life savings in order to be able to self-fund your future care needs; (2) protect your assets by purchasing long-term care insurance; or (3) protect your assets by using an asset protection trust designed to legally protect your assets and allow you to qualify for Medicaid, the governmental program that pays for about 70% of people living in nursing homes. For some families, a fourth way to pay for long-term care is a type of Veteran’s pension benefit called “Aid & Attendance.”

Unfortunately, option 1 (building up your income and life savings to self-fund future care) is not feasible for most Americans, especially in these troubled economic times. Accordingly, Parts 3 through 5 of this series will explain and explore these three methods of paying for long-term care. Part 3 will focus primarily on using long-term care insurance to protect your assets; Part 4 will explore the use of a special type of asset protection trust to protect assets and gain early access to Medicaid; and Part 5 will explain the Veteran’s Aid & Attendance benefit.

There are many things that you can do now to begin to put together a good Long-Term Care Plan. The most important thing you can do is to act now! You may have limited resources in the future or health problems that will prevent you from taking care of the things you can easily take care of today. The Farr Law Firm specializes in long-term care planning and we would be happy to assist you in your preparations. Please visit us at www.virginiaelderlaw.com or call 703-691-1888.

The “Power” of Peace of Mind

Written by Evan Farr
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Incapacity Planning is perhaps the most fundamental type of estate planning and yet it is also the most important.  Life is unpredictable; even someone in perfect health can become incapacitated from an accident or unforeseen medical condition.  If the unthinkable should happen, who would be in charge of making the most important decisions related to you or a loved one’s health and/or financial matters?  The answer to this question is determined by your power of attorney planning documents.

Since power of attorney documents are so important, it is critical that they are not outdated.  If your documents were not prepared by a licensed attorney, you should give us a call to schedule a free initial consultation.  You should also give us a call if it has been several years since they were created, or if you have gone through significant life changes.  Send us a message to get the process started here.

You can learn the answers to the most frequently asked questions at our website, here.  If you are not a member of our newsletter, subscribe by clicking here.

Click the slideshow below and a short video will pop up.  Click a second time once it has popped up, and it will play.  Enjoy!

 

 

 

Online Estate Planning: Is It Enough?

Written by Evan Farr

Trust lawyers are well aware of the variety of online estate planning tools available to those in Virginia and beyond, such as Quicken WillMaker, LegalZoom and Rocket Lawyer. The variety of products available can create a false sense of security, however, when an individual believes he or she has made adequate plans for the estate.  Recent Consumer Reports findings determined that the tools they reviewed were not robust enough to plan for situations that were even slightly complex.

For example, the high divorce rate in the US means that many individuals wish to provide for children from multiple relationships.  Most of the software reviewed by Consumer Reports could not meet the hypothetical clients’ specific wishes when it came to this subject.  In these “blended family” situations, the estate planning tools were too rigid in their options. This can result in accidentally leaving out a child, or favoring them unequally and causing hurt feelings.

A number of other problems were uncovered in this experiment, which is not a big surprise to most estate planning lawyers.  Each family and individual’s situation is highly dependent upon so many factors that it is nearly impossible for a computer program to anticipate them all.  Additionally, engaging with a live person means that there is a capacity for human understanding that the programs simply cannot replicate.

This interpersonal relationship is every bit as important as the documents that are created as a result.  From the lawyer’s extensive education and experience, he or she is able to guide clients into creating documents that are truly relevant to their particular circumstances.  In the world of estate planning, “one size fits all” simply doesn’t work.

One of the biggest problems with online estate planning tools is the fact that they seem to open so many estates up to the probate process.  As a result, families are left waiting for the courts to rule on decisions that the deceased believed had already been made.  Unfortunately, those decisions don’t always reflect the true wishes or spirit of the documents generated through the software.  Just as devastating is that fact that the probate process can be very expensive, thereby decreasing the amount of inheritance that beneficiaries do eventually receive.

It is commendable that so many people are now taking an interest in the estate planning process.  It is an unfortunate reality, however, that using online tools generally won’t be enough to plan for the actuality of your given situation.  Without a doubt, the best and safest approach is to develop a relationship with a trusted estate planning lawyer who can provide the expertise required to truly meet the needs of today’s modern families.

Learn more about Basic Estate Planning Here!

Estate Planning for Single Adults

Written by Evan Farr

When we typically think of estate planning, we see grandma and grandpa putting together a will and possibly setting up some trusts for the following generations. It’s all about providing for our offspring, right?

Not necessarily. Even if you are single and/or have no children, a Virginia wills and estates lawyer should still be in your plans. Why? Because estate planning is really about YOU.

While it is absolutely advisable for married people or those with children to work with a wills and trusts lawyer, it is actually just as important for single adults, as well.

In fact, there are times when it’s almost more important for singletons. After all, when a married person suffers a major illness, it’s usually pretty clear who will take on medical and financial responsibility. The water gets a bit murkier for unmarried individuals.

If you were to suddenly become incapacitated, who would make your medical decisions for you? If you haven’t worked with an estate planning attorney, the answer to this question becomes quite complicated. Possibly your parents would be called in to determine how your medical care should proceed. Maybe it would be a sibling. Most likely, it would not be your best friend or your significant other or whomever you would choose. Even if your parent or sibling would be your first choice, that doesn’t mean that the courts would agree without having your express wishes legally documented.

And what about your finances? If you are unable to take care of your finances for a period of time, who do you think will do so? The answer to that is: whomever the courts say. Again, it could be a parent, a sibling, some other relative, or even a court-appointed individual.

Finally, what will become of your things if you should unexpectedly pass away? Who would have legal rights to your belongings, to your home, to your pets? You may think you know the answers, but without clearly outlining your wishes with an estate planning attorney, you have very little control over the matter.

A single adult without children does not need to worry about creating guardianships and trusts to provide for his or her offspring, but it’s certainly a good idea to look out for yourself. Some of the basic legal documents any single person should have include:

  • A will to determine what will become of your assets in the event of your death.
  • A power of attorney for healthcare (or Advance Medical Directive) to name the person you want making medical decisions on your behalf.
  • A living will to clearly explain your wishes regarding medical procedures and life support.
  • A power of attorney for financial matters to name the person you feel should be responsible for your money if you are incapacitated.
  • A revocable living trust to centralize management of assets if you become incapacitated and keep your assets out of probate if you should pass away.

These five documents are crucial in ensuring that your wishes are met and that you have control over your future. A wills and trusts attorney in Virginia can easily get you on the path to having these affairs in order.

Wills and Basic Estate Planning

Financial Powers of Attorney

Medical Powers of Attorney

August is “What Will Be Your Legacy?” Month!

Written by Evan Farr

Many of us are so caught up in the here-and-now of the present that we fail to consider our distant future. We may get around to it later in life, after we have lived awhile–wondering what we might be remembered for, or what we will leave behind. Others are born with this innate sense of purpose, this desire to create a lasting legacy for themselves, or perhaps their children.

Whichever group you fall into, August is “What Will Be Your Legacy?” month and should spur you to ponder that question for yourself. While we can’t control what others think of us after we’re gone, we can make sure that we lay the groundwork for a lasting legacy. Proper estate planning can be key to many of your goals. Is there a charity or cause that you believe can change the world? Charitable gifting from a trust can ensure that you play a vital part in its mission even after you’re gone. Do you have children? Planning ahead to give them the ultimate gift of a good education will change their lives, and you don’t have to wait until the end of your life to do it!

Choose to ignore this, and your legacy could turn into a nightmare you never dreamed of. Do you want your loved ones to have to go through “the nightmare of probate” after you’re gone, because you didn’t have the right documents in place? Is that the final impression you want to leave with them? Probably not. This month gives us a prompt to make the right choices in our lives, for ourselves and our loved ones. You might think this approach only applies to the here and now, but you can make the right choices for what you leave behind you as well. After all, isn’t that what a legacy truly is?

What is Probate?
What is a Revocable Living Trust?
How Does a Revocable Trust Avoid Probate?
What About Irrevocable Living Trusts?
Choosing a Trustee
Protect Assets from Lawsuits PLUS Divorce PLUS Nursing Home Creditors

Planning for Long-Term Care (Part 2)

Written by Evan Farr

“Long-Term Care” refers to the broad spectrum of medical and support services provided to persons who have lost some or all capacity to function on their own due to a chronic illness or disabling condition, and who are expected to need such services over a prolonged period of time. Long-term care can consist of care in the home by family members (assisted by voluntary or employed help), adult day health care, or care in assisted living facilities or nursing homes.

In Part 1 of this series I mentioned that 60% of us will need long-term care at some point in our lives. When this statistic is put in perspective with the relatively low likelihood of making an automobile or homeowner’s claim, the risk that you or I will need long-term care at some point in the future is shocking. Yet, the majority of Americans are either unaware of these statistics or refuse to plan for the often catastrophic costs of long-term care. Part 1 of this series outlined the necessity to create a good Long-Term Care Plan in addition to, or as part of, your Estate Plan; Part 2 will now discuss the three most essential documents found in a good Long-Term Care Plan, as well as two additional documents that are often also part of a Long-Term Care Plan.

General Power of Attorney
A General Durable Power of Attorney (POA) containing Asset Protection Powers is the first essential document. Not all POA’s are created equal; it is crucial that this document be prepared by a knowledgeable and experienced Elder Law Attorney. One way to ensure the qualifications of your attorney is to look for one who is Certified as an Elder Law Attorney by the National Elder Law Foundation, the only organization accredited by the American Bar Association to certify lawyers in the specialty area of Elder Law. For a list of Certified Elder Law Attorneys, please visit http://www.nelf.org/findcela.asp.

A POA (always “durable” when used in connection with estate planning and long-term care planning) authorizes your “Agent,” sometimes called an “Attorney in Fact,” to act on your behalf and sign your name to legal and financial documents. It is an essential tool in the event that, due to age, illness, or injury, you are unable to carry on your legal and financial affairs. Asset Protection Powers written into the POA are essential in order for your Agent to protect your assets from the often-catastrophic expenses of long-term care. Attorneys who are not experienced Elder Law Attorneys often fail to put these essential Asset Protection Powers into the POA.

A properly-drafted POA is designed to avoid the need to go through a court-supervised conservatorship proceeding, which is a time consuming, expensive, and publicly embarrassing process whereby someone goes to court to have you declared incompetent and to be appointed as your Conservator. The Conservatorship process is often referred to as a type of “living probate” because the Conservator is subject to all the rules of the probate court, including the onerous requirement of filing annual accountings with the Court. State laws vary regarding the use and acceptance of a power of attorney.

Advance Medical Directive
 The second essential document in a good Long-Term Care Plan is an Advance Medical Directive (AMD) containing a Long-Term Care Directive. As with General Powers of Attorney, every lawyer drafts AMDs differently, and most attorneys do not include a Long-Term Care Directive within the AMD. Therefore, it is again in your best interest to have your AMD written by an attorney who specializes in long-term care planning, such as a Certified Elder Law Attorney.

An AMD (also called a Medical Power of Attorney or a Health Care Power of Attorney) authorizes another person (called your “Medical Agent”), to make decisions with respect to your medical care in the event that you are physically or mentally unable to do so. This document includes the type of provisions that used to be in what was commonly called a “Living Will,” allowing you to indicate your wishes concerning the use of artificial or extraordinary measures to prolong your life in the event of a terminal illness or injury. In the AMD you will also appoint a “Medical Agent” and give that person the power to consent to medical and health care decisions on your behalf with regard to providing, withholding, or withdrawing a specific medical treatment or course of treatment when you are incapable of making or communicating an informed decision on your own behalf. A comprehensive AMD will also allow you to indicate your wishes with regard to organ donation, disposition of bodily remains, and funeral arrangements.

A properly-drafted AMD is designed to avoid the need to go through a court-supervised guardianship proceeding, which is a time consuming, expensive, and publicly embarrassing process whereby someone goes to court to have you declared incompetent and to be appointed as your Guardian, typically at the same time they are requesting appointment as your Conservator.

Long-Term Care Directive
 Most importantly for your Long-Term Care Plan, your AMD should include a Long-Term Care Directive (or this could be drafted as a separate document), which will allow you to make your desires known in the event you need long-term care in the future. For instance, do you want to remain at home and receive home-based care as long as possible, regardless of cost, even if it drastically reduces or entirely depletes your estate? Or would you prefer to remain at home and receive home-based care only if it doesn’t drastically reduce or entirely deplete your estate? If nursing home care is absolutely required, would you like to protect as much of your assets as can be legally protected so that you can qualify earlier for publicly-funded Medicaid benefits? If so, do you prefer that the protected assets be used to enhance your quality of care, or to provide an inheritance for the beneficiaries of your estate?

In order to be easily accessible when needed, your AMD should be registered with an electronic archive service that can immediately fax the document to any desired destination. Some Elder Law Attorneys, including our firm, provide such registrations to clients at no charge.

Advance Care Plan
The third essential document that is found in a good Long-Term Care Plan is a document called an Advance Care Plan. The Advance Care Plan is a document that is created by special software that gathers, organizes, stores and disseminates information provided by you in an interview, in order to guide those who you will depend or for future care. The Advance Care Plan identifies your specific needs, desires, habits and preferences and incorporates all of this information into a document that your future caregiver can use to provide you with the best possible long-term care.

As an example, Alice wrote in her Advance Care Plan that if Alzheimer’s disease or some other type of dementia inhibited her mental abilities to communicate or recognize her surroundings, she wished to be in a respectable facility and only asked that she be visited and brought chocolates. To her children this request seemed silly at the time, but when her mental capacities did diminish, the instructions were there. No one had to wonder if they should try to take care of Alice at home and how they would do it. Without guilt or question they placed her in a respectable facility that took care of her needs. All they had to do was make loving visits, and of course they brought chocolates.

Because of the importance of the Advance Care Plan, the Farr Law Firm provides one to all of our clients as part our comprehensive Long-Term Care Planning services. To learn more about the benefits of having an Advance Care Plan, please click here or visit our Web site at: www.farrlawfirm.com/advance-care-plan.htm

Living Trusts
A good Long-Term Care Plan will always include the three documents mentioned above, and will typically also include a Living Trust — either a Revocable Living Trust (RLT) or an Irrevocable Income-Only Trust (IOT).

An RLT generally provides for the creator of the trust to have full use of the trust income and principal for life. On the death of the creator, the assets may continue to be held in trust (or may be distributed) for the benefit of the named beneficiaries, such as the grantor’s children. Although the most important benefit of the RLT is to avoid probate, a well-drafted RLT also can help protect from incapacity and can therefore be an important part of a Long-Term Care Plan. Similar to a General Power of Attorney, an RLT can provide uninterrupted management of your assets by your trustee if you become incapacitated, sparing you and your family from having to go through the expense and complexities of a court-appointed conservatorship. It is important to note that an RLT does not protect your assets from the expenses of long-term care. On the contrary, the assets in an RLT must be spent, if necessary, in providing long-term care, even if that means spending down all of the assets in the RLT to provide such care. For more information on RLTs, please click here or visit our Web site at: www.farrlawfirm.com/revocable.html

 An IOT is a living trust that is designed to protect your assets from the expenses and difficulties of probate and also protect your assets during your lifetime from a multitude of other financial risks, including the threat of lawsuits, auto accidents, creditor attacks, extended hospitalization, and — most importantly – the catastrophic expenses associated with nursing home care. Part 4 of this series will explore the IOT in detail.

Conclusion
A good Long-Term Care Plan will always include a General Power of Attorney, Advance Medical Directive, and Advance Care Plan, and will typically also include a Living Trust — either a Revocable Living Trust or an Irrevocable Income-Only Trust. However, as mentioned in Part 1, these essential legal documents are only part of the requirements for a good Long-Term Care Plan. The other important component is a plan for how to pay for long-term care. The next installment in this series will discuss protecting your assets by purchasing long-term care insurance.

The Farr Law Firm specializes in long-term care planning and we would be happy to assist you in your preparations. Please visit us at www.virginiaelderlaw.com or call 703-691-1888.