How Your Caregiver Can Get Paid and Treated Fairly

Many older Americans can live at home instead of in a nursing home, if they receive adequate caregiving services. “Consumer-directed care” programs in some states provide funds to pay for family caregivers. These programs can cost the state and federal government less money than long-term care facilities. Seniors get to continue living in the home they love. On the surface, this arrangement sounds perfect, yet the caregivers often experience surprising problems with other family members and the parents they are trying to help.

The adult child who serves as the primary caregiver frequently does so at great financial sacrifice, having to quit her job or work fewer hours to take the parent to doctor appointments and dress, groom, and feed the parent. Siblings of the caregiver sometimes resent the fact that the person providing the care gets paid by the government, even though it is a modest wage. Here are some tips on how your caregiver can get paid and treated fairly, while avoiding family conflict.

Communicate. The caregiver, care recipient and other family members should have a candid conversation about the arrangement before taking the leap. Once siblings realize the government red tape required and the small amount of compensation the caregiver will receive, they will be less likely to cause problems.

In some families, however, the existing dynamic is not a good fit for a paid caregiver arrangement. In these situations, the parent might treat the caregiver like a servant, damaging the parent-child relationship. Siblings might refuse to pitch in at all with helping the parents, even though the nominal salary is grossly inadequate to cover round-the-clock care. Some caregivers also might treat the parents or siblings unfairly, once they start collecting an income for providing care.

Decide if the caregiver salary is worth it. In some situations, the caregiver might find that the little bit of income is not worth the family squabbles and being treated like a second-class citizen. Some caregivers reach their breaking point and go back to their previous jobs that often paid more money and provided benefits. In these instances, the parent will likely have to move into a nursing home. Many families do not appreciate the caregiver’s work, until the situation gets to this level. By then it is too late to undo the harm.

This advice is a cautionary tale for older parents, whose children serve as their caregivers. Once the adult child starts getting paid for his work, the parent might start to mistreat him, barking orders and making unreasonable demands. Seniors should understand that the consequences of such actions can include being moved into a nursing home.

If your state has programs that pay family members to provide caregiving services, your parent might be able to delay the nursing home and the caregiver can get some respect and pay for doing these valuable activities. To make sure that everyone gets treated fairly, the family needs to have a family meeting, discuss the details openly and set clear boundaries and expectations.

You should talk with a nearby elder law attorney about whether your state’s regulations vary from the general law of this article.

References:

AARP. “Getting Compensated for Caregiving Can Change Family Dynamics.” (accessed February 14, 2019) https://www.aarp.org/caregiving/home-care/info-2019/compensation-family-dynamics.html

Protect A Life of Working and Saving from Long Term Care Costs

Every month, Lawrence Cappiello writes a check to a nursing home for $12,000 to pay for the cost of his wife’s nursing home care. Two years ago, his net worth was $500,000. In less than two years, the Cappiello’s savings will be gone. This unsettling story is explained in the article “How to Keep LTC Costs From Devouring Your Client’s Life Savings” from Insurance News Net. He is suffering from nursing home sticker shock and says he should have known better.

Cappiello was a professor at the University of Buffalo for 25 years. During that time, he taught an introductory course on health care and human services that touched on the costs to consumers. He said it was clear even then, that the cost of health care was going to escalate out of control.

To qualify for Medicaid payments of nursing home care in New York State, residents are permitted to own no more than $15,450 in nonexempt assets. However, elder lawyers, whose practices focus on these exact issues, say that the way to protect the family’s assets, is to take steps years before nursing home care is needed. Some general recommendations:

  • Signing over the deed of the home to children or any others who would otherwise inherit it from you in a will. The transaction would need to stipulate that you have life use of the home.
  • Establishing an irrevocable trust, that upon death, transfers the house to the beneficiaries. There must be language that ensures that you have life use of the house.
  • Giving away savings and other financial assets.

Transfers of any assets must take place more than five years before applying for Medicaid nursing home coverage. If they have been given away or transferred within the five year “look-back” period, then there is a chance that they may still qualify, or they may have to wait five years.

That is why planning with an experienced elder law attorney is so critical for families, especially when one of the spouses is facing a known illness that will get worse with time. There are steps that can be taken, but they must be done in a timely manner.

Many older people are not exactly jumping with joy at the idea of handing over their assets, even when relationships with adult children are good. The idea of giving up assets and the family home is a marker of the passage of time and the inevitability of death. These are not things that we enjoy considering. However, taking these steps in advance, can make a huge difference in the quality of the well spouse’s life.

It should be noted that a sick spouse can move assets to a healthy spouse, to make the sick spouse lawfully poor and eligible for Medicaid. There is no look back period or penalty for interspousal transfers. This sounds like a very simple solution. However, these are complex matters that need the help of an experienced attorney. If it were so easy, countless spouses would not be facing their own impoverishment because of an ill spouse.

Reference: Insurance News Net (Feb. 4, 2019) “How to Keep LTC Costs From Devouring Your Client’s Life Savings”

Planning for the Sad Truth of Growing Old Together

If it’s any comfort, there are now some 20 million widows and widowers in America, according to a study from Merrill Lynch and Age Wave that focuses on widowhood, as reported by CBS News’ Moneywatch in “A retirement planning must-do for married couples.” The study, “Widowhood: The Loss Couples Rarely Plan for—and Should” takes a detailed look at what happens, when the first spouse dies.

It should be noted that women are three times as likely as men to be the surviving spouse, since women historically tend to live longer. Widowers tend to marry younger women, leaving many older women to need to learn how to live as senior singles.

More than half of all of those surveyed who had lost a spouse, said they had not planned for it.  More than three-quarters of married retirees said they would not be financially prepared for retirement, if their spouse passed away.

Losing a spouse is the hardest thing for married people, particularly if they have never been single. Some 75% of those who had lost a spouse, said it was the single hardest thing they’d ever had to deal with. Half of them experience a household decline in income of 50%—or more. Adjusting to that loss of income is a big concern.

When the first spouse passes, the surviving spouses report that they were overwhelmed with paperwork and didn’t know how to begin.

You can plan for this unpleasant eventuality, and you should. Just as having an estate plan in place will help loved ones, planning for one of you to become widowed will help the other.

What should couples do in advance?

  • Know what all your assets and accounts are and how to access all accounts.
  • Make sure both names are on all accounts and deeds.
  • Be able to access cash.
  • Keep credit card debt separate.

Here’s some advice from the surviving spouses:

  • Avoid making big decisions, until at least a year has passed.
  • Find all important documents and pay bills on time.
  • Notify banks, financial advisors and employers.
  • Reevaluate your retirement strategy, following a financial audit of your new situation.
  • Update your estate plan and check all beneficiary designations.

Losing a spouse is a difficult and painful experience.  However, many people report that afterwards they found courage and strength they never knew they had and are living a full and rewarding life.

Reference: CBS Moneywatch (Sep. 12, 2018) “A retirement planning must-do for married couples”

Good Planning Avoids the Devastating Costs of Long-Term Care

If you don’t have a plan for long-term care, welcome to the club. However, you may not want to be a member of this club, if and when you need long-term care. A recent report from the U.S. Department of Health and Human Services found that people age 65 and older have a very good chance—70%—of needing long-term care. Despite this, most people are not putting plans in place, according to an article from Westfair Online titled Keybank poll reveals clients aren’t planning for long term care.”

This is true for people with assets exceeding $1 million and for people with more modest assets. In a study by Keybank, fewer than a quarter of high net-worth clients had plans in place for long-term care. This poses real financial risks, to the individuals and their families.

Consider the costs of long-term health care. One study from Genworth Financial reports that in 2017, the national median cost of a home health aide was roughly $49,000 a year, assisted living facilities could cost $45,000 (that’s not including medical services), and a private room in a nursing home came close to $100,000 annually. Costs vary by region, so if you live in an expensive area, those costs could easily go much higher.

Why don’t people plan ahead for long-term care? Perhaps they think they will never become ill, which is not the case. They may think their health insurance will cover all the cost, which is rarely the case.  They may believe that Medicare will cover everything, which is also not true.  We have seen cases come in the office where mom or dad didn’t plan and ended up spending all of their assets on long-term care.  No legacy was left to the kids.  Very sad.

Everyone’s hope is that they are able to be at home during a long illness, or during their last illness. However, that’s often not a choice we get. This is a topic that families should discuss well in advance of any illness. Talking with family about potential end-of-life care and decisions is important for setting expectations, delegating responsibilities and avoiding unpleasant surprises.

The other part of a long-term care discussion with family members needs to be about estate plans and decisions about the disposition of assets. Everyone should have a will, and all information including deeds, trusts, bank and investment accounts and digital assets should be discussed with the family. You’ll also need a power of attorney and health care proxy to carry out your wishes. An experienced estate planning attorney can help create an estate plan and facilitate discussions with family members.

Long-term planning is an on-going event. Life changes, and so should your long-term care plan, as well as your estate plan. You should also keep communications open with your family. They will appreciate your looking out for them before and after any illness.

Reference: Westfair Online (Sep. 7, 2018) Keybank poll reveals clients aren’t planning for long term care