When You or a Loved One is Diagnosed with Alzheimer’s, Dementia, or Other Illness, There Are Important Steps You Must Take To Protect Your Finances
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A word from Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright
I know you’re highly stressed and anxious. You have every right to be. Alzheimer’s and dementia changes lives for the worse.
You may very well have a loved one who’s showing signs of memory loss and you’re concerned that it might be Alzheimer’s Disease…or perhaps your loved one has already been diagnosed, with Dementia or Alzheimer’s.
I empathize with you and I’m here for you. You’re concerned about getting good health care and wondering where you’ll find the strength and resources to carry on throughout the course of a disease that can sometimes last for 5, 10 or even 20 years.
And then there is the cost… you’re worrying if you might lose everything to Alzheimer’s.
The 9 Crucial Steps to Alzheimer’s Planning
Here is a brief checklist of what you need to do now.
STEP 1 Start Your Alzheimer’s Planning Immediately
First and foremost, it is important to begin your Alzheimer’s Planning immediately. As soon as the first sign of Alzheimer’s or memory loss is suspected, it is crucial that you have the proper documentation in place to ensure appropriate planning is followed. If you suspect a family member may be experiencing some early signs of Alzheimer’s, consult an Alzheimer’s Planning attorney immediately to evaluate their situation.
Remember to bring important documents with you to your consultation. These documents should include any wills, trusts, powers of attorney, health care directives, and other important estate planning documents that may be useful for your Alzheimer’s planning. Documents pertaining to financial assets should also be shown to your attorney. An Alzheimer’s planning attorney will be able to evaluate the situation and provide guidance in determining what steps you should take for proper planning. Taking appropriate actions now can save you lots of time and money down the road, typically helping you avoid legal proceedings later.
STEP 2 Consider Drafting a Durable Health Care Directive(s) and a Living Will
THE BENEFITS OF A DURABLE HEALTH CARE POWER OF ATTORNEY ARE IMMENSE
Many have heard of a power of attorney, but did you know this powerful document can be applied in the health care context? The Health Care Power of Attorney (HCPOA) is a document that authorizes someone else to make medical decisions for you should you become unable to.
Your HCPOA should include essential provisions, including the following:
- A clear, written declaration stating your intent to give the power to make health care decisions to a designated individual(s);
- Evidence of legal capacity. This is established by your signature when you voluntarily and knowingly sign the HCPOA;
- The signatures of two adults over 18 who witness you signing the document. These witnesses cannot be agents, relatives, or heirs, nor can they be directly involved in your healthcare.
Making the proper choice of who should act as your agent when you are unable to make healthcare decisions is a big one. This individual should be someone you consider trustworthy, responsible, and caring. Keep in mind it is entirely possible that the person you select may have to make some of the most important decisions of your life. Always remember to try and give your physician a copy of the HCPOA.
It is crucial that Alzheimer’s patients always sign these documents as soon as possible because when the disease fully strikes, the individual will be unable to legally sign the document. If one takes too long and loses capacity to create a HCPOA, a guardianship proceeding in the NJ Courts is likely necessary, costing time and money for the family.
ALWAYS REMEMBER: Spouses and children are not, by NJ Law, permitted to make health care decisions on your behalf merely because they are related to you. You MUST create a HCPOA if you wish them to have such decision-making power.
Why Have a Living Will and Advanced Medical Directive in NJ is Important
A living will is similar to a HCPOA. It states your wishes and intent regarding end-of-life treatment. Many individuals have a strong opinion as to how they wish to be treated should they become terminally ill and unconscious. Some prefer life-sustaining treatment, while others do not. It is important you dictate your wishes in a Living Will. In order for a doctor to honor your end of life decision(s), New Jersey law requires clear and convincing evidence that authorizes such decisions. There is no better way to do so than in a living will.
Living wills can be customized to suit your choice(s). For example, some individuals are against prolonging their lives if they become unconscious or terminally ill, while others want to use all means possible to keep them alive. Some are against all life-prolonging treatment but wish to still have food and water. Whatever your wishes, your living will can be customized to suit them exactly.
Discussing your wishes with family members and those close to you is something that is extremely important. While living wills are most often clear and convincing evidence of your intentions, it is not impossible that family members may dispute the document if the times comes where there is a true “life or death” situation. Obviously, the last thing anyone wants is for their loved ones to be fighting while they are in such a fragile situation.
Please call Fredrick P. Niemann, Esq., an experienced Elder Law Attorney today to discuss any questions you may have regarding a HCPOA or Living Will. Once you understand your options and have made a decision that is right for you, you can move on to drafting the document that fits your needs and discussing your wishes with your family members. You can reach Fred toll-free at (855) 376-5291 or by email at firstname.lastname@example.org.
STEP 3 Consider Drafting a Financial Power of Attorney
Similar to the power of attorney in the healthcare context, the durable power of attorney for finances allows you to designate an agent to handle your financial and legal affairs should you become unable to. For example, should you become incapacitated, you can have your spouse pay your bills, handle investments, pay taxes, manage your assets, and more.
Understanding the financial power of attorney (POA) is important before you take any action. You should always understand the effect and nature of signing the financial POA. Always remember, the POA can be revoked or changed at any time. NJ Law requires the following for all financial POAs:
- You, the principal (creator of document), must willing and voluntarily sign the POA, without being coerced by anyone;
- The POA must be notarized by a notary public.
- Most attorneys also recommend having two witnesses that are unrelated to the you witness and sign the document. This is not required but is highly recommended.
New Jersey has instituted stricter laws concerning financial POAs in recent years. The agent, acting on behalf of the principal, may only use the principal’s assets in a way that benefits the principal. If you are the principal and wish your agent to be able to benefit from the assets in any way, you must grant them such power in your financial POA.
The financial POA is one of the most powerful tools in Alzheimer’s dementia planning. Should a loved one begin to suffer from Alzheimer’s and become unable to manage their financial affairs, a trusted loved one can take over and make the important decisions that the principal would have made were they able to.
Merely having a financial POA isn’t enough. Make sure to obtain a detailed, properly written financial POA that is specified to your needs. The importance of a well-written document cannot be stressed enough. In order to ensure your agent can fully and properly take advantage of your Alzheimer’s planning, your POA should always contain the correct legal language concerning banking, gifts, public benefit planning, and trusts, among other key elements.
Elder Care Attorney Fredrick P. Niemann has extensive experience in drafting financial POAs, among many other Alzheimer’s Planning documents. He would be more than happy to assist you by answering any questions you may have, educating you on the effects of such documents, and helping draft the documents for you. All it takes is to contact him toll-free at (855) 376-5291 or by email at email@example.com.
STEP 4 Consider Creating a Revocable Living Trust or a Last Will and Testament
There are numerous types of trusts out there, but the Revocable Living Trust (aka an inter vivos trust) is one of the most important for Alzheimer’s dementia planning. These documents help with the management of your assets throughout your life and continue to do so even after you die.
As the creator of a trust, you will be referred to as the settlor or grantor. The settlor places property in the trust to be held by someone you appoint, known as the trustee. The trustee will hold legal title to the property while it is in trust, acting with a fiduciary duty to act for the benefit of the beneficiaries of the trust. The beneficiaries are those individuals named by you to benefit from the trust.
Revocable living trusts are a great option for Alzheimer’s planning and overall estate planning purposes because they help families avoid probate, which is a process in NJ to distribute a deceased person’s assets to beneficiaries.
The Revocable Living Trust can also be used for the management of assets throughout an individual’s life, as previously mentioned. It can be revoked by the settlor at any time, if they have the capacity to do so. They are also not expensive to create.
Placing assets in a Revocable Living Trust can be a great tool for Alzheimer’s planning, but it is important to note that these trusts often impact Medicaid eligibility requirements. For this reason, it is essential that you consult an experienced Elder law attorney when creating these trusts. An attorney that is knowledgeable in Alzheimer’s Planning can explain to you the implications of placing assets in a revocable living trust and make sure your trust is crafted to your needs.
One alternative to the Revocable Living Trust is the Last Will and Testament (often simply known as a Will), the typical estate planning document that one thinks of. The Will is a written document that dictates who will receive your property and assets upon your death.
STEP 5 Review the Titles and Form of Ownership on Your Assets, Investments and Property
It is not uncommon for people in today’s society to own property jointly. One of the most popular forms of ownership is Joint Tenancy with Rights of Survivorship, as typically seen with real estate. Joint ownership of bank accounts is also quite common, typically between husband and wife, so each has access to the money in the bank account.
In the case of real estate that is owned by joint tenants with rights of survivorship, the property will belong solely to the surviving owner when the other owner dies. Therefore, selling the property is not an issue once one owner dies. However, as long as both joint owners are alive, they both have to sign off in order for the property to be sold or transferred. If one of the joint owners develops Alzheimer’s, this can be a major issue, as they may lack capacity to okay such a decision to sell. To protect against instances like this, it is crucial to have a financial Durable Power of Attorney in place.
There are many advantages and disadvantages to owning property as a Joint Tenant with Rights of Survivorship. Don’t make the mistake of failing to review your property titles to ensure you are aware of the ownership status of ALL your properties. Have your property titles reviewed by a knowledgeable Alzheimer’s planning attorney to make sure you know exactly where you stand. This is a crucial part of proper Alzheimer’s planning and will undoubtedly benefit you in the future.
STEP 6 Start Planning Now to Pay For Long-Term Care in the Future
Many individuals and family members are unaware of the significant costs associated with Alzheimer’s care. Studies have shown that the cost of care for Alzheimer’s patients is, on average, over $400,000 throughout a person’s lifetime.
Not surprisingly, this can be a burden for most families. You are probably reading this asking yourself, “How can I possibly pay for this assistance without going bankrupt?” In-home care costs around $20 – $28 per hour or $175 – $240 per day for 12-16 hours of care. If an individual needs to be placed in a nursing home to care for their Alzheimer’s, costs can be exorbitant, running between $8,500 and $13,000 per month! So how will you afford this? Make sure you learn your financial options. There are four basic options to pay for long-term care. They are as follows:
- Long-Term Care Insurance – An increasingly popular option that more and more families are taking advantage of, long-term care insurance typically pays the daily rate for in-home and nursing home care of Alzheimer’s patients. The amount the insurance company pays depends on the policy you take out. It is important to sign-up for this option sooner rather than later as it is often too late to qualify once the individual has been diagnosed with the disease.
- Self-Funding – Often a more realistic option for the wealthy, some individuals opt to or are forced to pay for the care out of their own funds. Many less-wealthy families falsely believe this will be the case for them. Fortunately, this isn’t always the case, as many individuals with limited money have alternative options.
- Medicare – The national healthcare entitlement program, Medicare is provided to those that are 65 years old and over, as well as certain younger individuals that have qualifying disabilities. Medicare offers short-term assistance to patients with nursing home cots, but only in situations where there was a prior hospital stay and the individual has met strict requirements set forth by the state. Medicare will not pay for your custodial Alzheimer’s care.
- Medicaid – A government program funded jointly by the states and federal government; Medicaid is administered by the NJ Department of Health & Senior Services through the Country Board of Social Services. Often the best payment option for individuals with Alzheimer’s, Medicaid can cover the cost of medical care, nursing home car, and in certain cases, home and community services. The downside to Medicaid is its strict financial and medical eligibility requirements. However, if you pass the criteria, you will see the many positives to the beneficial program.
STEP 7 Educate Yourself About New Jersey Medicaid and Begin Planning Immediately
As previously mentioned, Medicaid is funded by both the federal and state government. The health insurance program provides significant benefits to those who qualify, but unfortunately individuals must meet strict requirements. Obviously, one of the goals of the Medicaid program is to keep those who qualify at the lowest level of care possible. This helps them reduce costs of paying for care while allowing the individual to remain in their own home or a low-cost, less-institutionalized facility.
Many individuals believe Medicaid only covers nursing home care. Once they find out it covers in-home care and assisted living, they have waited too long to plan and as a result, they are forced to personally pay for Alzheimer’s care out of their own savings. Don’t make the mistake of failing to plan. It could cost you money you otherwise would be able to save.
Why Planning Ahead Benefits You and Your Loved One
Alzheimer’s is a disease that has a natural and sometimes rapid progression. You simply can never know when the disease will take over and long-term healthcare will be necessary. For this reason, you may want to look into purchasing Alzheimer’s insurance now.
If you are unable to purchase insurance now, whether it be due to a medical condition already surfacing or simply because it is too expensive, you should consider planning now to qualify for Medicaid. With New Jersey’s constantly evolving Medicaid laws, it is believed that in the near future Medicaid planning may have to be done as far as three years in advance of when the funding is needed.
Even if you are currently in a position where Alzheimer’s or another disease has struck a loved one and you need to obtain care immediately, there is still planning you can do to. Meet with a qualified Alzheimer’s attorney to determine how to you can help your loved one qualify for Medicaid in the near future if they don’t already.
Medicaid Eligibility Requirements in New Jersey
Becoming familiar with the requirements to qualify for Medicaid is extremely important since Alzheimer’s and dementia will require long-term care. Before a financial assessment is even taken by the state, the applicant must meet certain general criteria, including:
- U.S. Citizen or a legal alien;
- New Jersey resident;
- Legitimate social security number;
- Reside in a medical institution or approved home/community-based setting;
Once these criteria are met, the government will evaluate your financial eligibility to ensure you have income below the permissible limit. Only then will you qualify for Medicaid benefits. A single applicant may only have $2,000 in “countable resources” in order to qualify. Married couples can’t have more than $4,000 combined in countable resources.
Countable resources include your home (under limited circumstances), a vehicle, burial plots, irrevocable prepaid funeral plans, and life insurance, among others. Medicaid will also look at all other resources as non-exempt, counting toward your financial eligibility calculation. This includes all savings and checking accounts, cash, certificates of deposit, savings bonds, retirement accounts (such as IRA, 401k, TSA plans), nursing home accounts, trusts, other real estate besides your primary residence, a second vehicle, boats, stocks, bonds, promissory notes, and other investments.
While the rules are very complicated, it is usually safe to assume that individual will qualify for Medicaid as long as they hold under $2,000 in countable resources in NJ.
Questions to Address After The 9 Crucial Steps
Here Are Some Questions For You to Answer
- Does the person with Alzheimer’s have assets that include trusts, life insurance policies, long-term care insurance, annuities, real estate interests, stocks, bonds, retirement plans, IRAs, or other investments?
- Has the person with Alzheimer’s or their spouse gifted or transferred any cash, bank accounts, real property, or personal property to someone within the last 60 months (excluding typical gifts for holidays)? This includes placing another individuals name on real property ownership.
- Regardless of whether the applicant has enough income to pay for his or her current care, does he or she expect to pay for long-term care costs within the next 12 months?
- Is the Alzheimer’s patient interested in legally protecting assets for a spouse, child, or family member?
If you answered YES to any of the above questions, it is likely in your best interests to consult with Fredrick P. Niemann, an experienced Alzheimer’s Planning Attorney before you apply for Medicaid assistance.
Mr. Niemann has been a god send to me and my family. He has met with me many, many times with patience, sensitivity and understanding that few people expect from an attorney. My family issues are complex, and Mr. Niemann understands what I want to happen to my estate upon my death especially for my adult incapacitated child and other adult children. He created a special trust for my son. He has followed up with me to help me make decisions without forcing his opinions on me. In the end, he told me, ”Jerri, my job is to explain your choices and help you understand the legal effect of those choices”. He guides me and puts me at ease. He wants you to make decisions that are the right ones for you.
—Jeraldine Vincitore Freehold, NJ
I join in every word my Mom described about Mr. Niemann. She just raves about him and when she leaves his office, she is calm and totally confident in his counsel, wisdom and advice. Our family is blessed with him being my Mom’s protector and confidant.
—Teresa Vincitore, West Patterson, NJ
STEP 8 Learn From the Experience of Others
As we enter our elder years, it isn’t uncommon to see friends and other individuals we are familiar with develop certain diseases. While this can often be stressful for people to see a friend develop Alzheimer’s, it is important to learn from this experience to help yourself and your family. Take the following case study for example:
Bob, age 80, has developed Alzheimer’s. Both he and his wife Liz, age 79, are New Jersey residents and have worked together to fight against Bob’s disease for many years.
As is often the case with Alzheimer’s, Bob developed subtle memory loss at first, forgetting where he left his wallet, keys, etc. His physician said it was dementia and was progressing slowly, but unfortunately the disease accelerated and soon Bob would not just forget his keys but forget what they were to be used for as well.
Liz, being exhausted caring for Bob at home, is finally convinced by her children to take him to adult day care. It turns out to relieve her burden significantly, but Liz worries that she will not be able to pay for this forever. She inquires as to what steps she should be taking to ensure financial security and quality care for Bob.
Having started thinking about Alzheimer’s planning, she should first look to the Powers of Attorney. Liz already has financial and healthcare Powers of Attorney as well as a Living Will, but nothing beyond this. What else should she do?
Unfortunately, since Bob is not in a nursing home, none of the costs spent so far may be used against Medicaid spend down. This is even though Bob would undoubtedly be in a nursing home already had Liz and their children not cared for him all these years. So are the rough criteria of Medicaid.
Bob and Liz have a home valued at $500,000, along with an older model Cadillac. They have $380,000 saved, but Liz still worries because this amount was at $800,000 just last year.
So, what would an experienced attorney like Fredrick P. Niemann, Esq. recommend in this situation?
First, we would immediately apply for Medicaid and seek benefits under Managed Long-Term Services and Supports (MLTSS), an option now consolidated under a New Jersey’s recently approved Medicaid state plan.
We would designate Bob as the “institutionalized spouse”. Because of this label, all assets spent from here on out will be taken from Bob’s side as part of a Medicaid spend down. If Liz spends her assets to the point where Bob would qualify for home-based services (this would have be nearly $265,000 after the division of assets), then Bob would already be qualified for Medicaid when the time comes for him to enter a nursing home. This essentially provides a shortcut to qualifying for Medicaid, which in turn can save Liz and the family tens of thousands of dollars.
In sum, by properly applying for home-based services, Liz and Bob have effectively established a snapshot date. Therefore, all money spent on Bob’s care, including his adult day care, will count as part of his Medicaid spend down. Additionally, they may also qualify for certain Veteran’s benefits, which could give them up to $1,959 in extra income every month.
By speaking with a qualified Alzheimer’s Planning attorney, Liz has gained an education on the topic and is now able to take steps that will save her family tens of thousands of dollars. She also has ensured Bob will qualify for additional care services in the home. Finally, the Veteran’s Administration may cover a significant portion of Bob’s care, giving them yet another significant benefit.
Obviously, Liz can rest much easier knowing she is receiving proper assistance from Medicaid and the VA. Having financial security can lighten the burden on anyone’s shoulders.
Medicaid laws are extremely strict and qualification requirements are confusing. Don’t be intimidated because you don’t understand the laws. Not many people do. All you need is proper advice to start saving and receiving the benefits you are entitled to.
I am happy to refer the many families I work with daily to Fred Niemann. He is extremely detailed and able to handle all the aspects of elder law that most families need assistance with. Many of the families will make a point of thanking me for referring them to Fred and are able to refer him to others as well. Therefore, I recommend his services highly to anyone seeking a lawyer with integrity, knowledge of his trade and a good reputation.
Christine Meyer – Eldercare Advisor at A Place for Mom
STEP 9 Seek Advice of a Skilled Alzheimer’s Planning Attorney
Families with a member that has Alzheimer’s, or another serious disease are often in a vulnerable position and need assistance. People have tons of questions regarding Medicaid eligibility, financial security, nursing home care, estate planning, and many other important topics.
In most cases, Alzheimer’s estate and Medicaid planning is critical. Families need to be protected and assured that their assets and resources are not wasted when they could otherwise be receiving government benefits.
So where should you turn for help? Someone who knows Medicaid laws? Financial planners? Accountants? Insurance salesmen? Who is in the best position to handle these diverse, complex issues as a whole and bring expertise in the overall situation as opposed to a single area? It is crucial to obtain advice from somebody that looks at the entire picture and makes sure all your rights are protected and your resources are put to good use. Elder Care attorneys that spend a significant amount of time in Alzheimer’s Planning are uniquely qualified to assist you in this area.
Alzheimer’s planning includes a broad range of legal issues that affect seniors specifically. These legal issues include Medicaid planning, long-term care planning, conservatorships, guardianships, and estate planning, including use of instruments such as trusts and wills. An experienced attorney can consider the legal issues that will arise throughout the process, in addition to giving you advice on Medicaid policies, rules, procedures, requirements, etc. This allows you to plan for everything in the future, not just focus on what lies at your feet.
There are numerous appropriate questions to ask when choosing an attorney for Alzheimer’s Planning, including any questions related to any of the topics mentioned above. Fredrick P. Niemann, Esq. has knowledge and many years of experience in Alzheimer’s Planning and would be more than happy to answer your questions for you. Just as you wouldn’t want someone that is an expert in administering first aid performing a heart operation, you don’t want someone who lacks expertise in every aspect of Alzheimer’s planning advising you during such a critical period. Proper advice in a time of crisis can help take a significant weight off your shoulders by protecting your rights, preserving your assets, and prevent unnecessary costs.
For more information about any of the topics discussed or if you have any questions regarding Alzheimer’s planning, please contact Fredrick P. Niemann, Esq., a qualified NJ Elder Care and Elder Law attorney. He can be reached toll-free at (855) 376-5291 or by email at firstname.lastname@example.org.
Mr. Niemann welcomes any inquiries you may have.
Written by Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, A New Jersey Alzheimers and Dementia Attorney