By Rajiv Nagaich
Copyright 2011
Life Plan is a comprehensive and coordinated effort to address all issues that can cause your anticipated retirement plans to self-destruct. Among the chief culprits that can render prior planning useless is a bout with untimely illness. A stroke which a person survives but without the ability to care for his or her own needs; diagnosis of Alzheimer’s, Parkinson’s or other forms of dementia; or any other illness that robs a person of the ability to address one’s own needs without the assistance of others are all examples of such illnesses. When faced with such a situation, the family of the ill person, along with the ill family member, will have to confront healthcare, housing, financial, and legal issues – and all at the same time. Sadly, for most Americans faced with such a situation, the task will be overwhelming and costly.
A Life Plan is a methodically developed strategy that strives to coordinate the efforts of your health care, housing, and financial and legal professionals to develop a framework within which you can achieve your goals:
Protect your hard-earned assets from uncovered medical and long-term care costs;
Avoid undesirable institutional care; and
Not become a burden on loved ones if incapacity strikes
COMPONENTS OF A LifePlan ™
The first and likely immediate concern of the family of an ill person will be to address health issues. Recovery from a physical injury at younger ages is very different than recovery from a bout with unexpected illnesses at older ages. For example, a stroke-related incident may well leave a person incapacitated and unable to care for his or her own needs. The medical community today will likely be able to save a person’s life, but do little more than to recommend institutional care for ongoing needs once medicine has reached its limits. Similarly, a diagnosis of Alzheimer’s or dementia will produce few answers other than to seek assistance of either home health or institutional care. These are commonplace examples retirees’ face, which turns a medical condition to a housing issue very quickly.
The second component of a Life Plan, then, is housing. An overwhelmingly large share of retirees will want to age in place. This leads to hospitalized patients being discharged desperately wanting to go back home. But many times they may not be able to do this because their home may not be safe for them to return to because of the physical layout or lack of informal support systems needed to safely thrive at home. Most retirees, not desiring to be a burden on loved ones, will begrudgingly accept the fate of institutionalized care. This is true despite the fact that with proper resources, home care can and does allow access to medical care at home. However, the cost of home care can at times be more expensive than nursing home care. And that reality will drive more families to accept institutional care as the setting of choice where care is accessed. So, now a health concern that became a housing issue quickly morphs into a financial issue – and only because Medicare and health insurance plans do not provide for home care in any meaningful way. Many people in nursing homes really do not belong there, but families may not know how to keep them out of institutional care without going broke.
The third component, then, is financial. For Most retirees’ Social Security and Medicare benefits make retirement possible. Without these two institutions, many could not retire. This is especially true for Medicare which, starting at age 65, becomes the primary source of health insurance for retirees. However, Medicare only covers those needs for which there are a recognized medical solution, leaving experimental treatment, home health, and care accessed in assisted living facilities and nursing homes uncovered in any meaningful way. The cost of such care high which can deplete even modest size estates, rendering middle-size estates vulnerable to uncovered medical and long-term care costs.
But there is hope. Where Medicare leaves off, VA and Medicaid provide coverage that can help families cope with the very high cost of uncovered medical and long-term care costs. Qualification requires legal planning, which is easily accessed.
So, the fourth and final component of a Life Plan becomes the legal component. Elder Law attorneys are trained by education and experience to be able to assist families and individuals in rearranging their estates so as to be able to access VA and Medicaid to cover the very high uncovered medical and long-term care costs. However, the distinction is generally lost on consumers who do rely heavily on their trusted legal counsel to provide solutions that they may not be best suited to provide. Elder Law is a specialty in legal circles, just as Geriatrics is in medicine. Both disciplines do not have enough professionals dedicated to the needs of retirees as distinct from needs of younger individuals. This one fact leads to consumers reaching out to traditional estate planning attorneys who
may not even fully understand the scope of the issues retirees will likely face in later years, and therefore, will have no solutions to address these yet-undiscovered needs. A comprehensive and coordinated plan is a basic necessity that must be developed, hopefully well before catastrophe strikes.
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