Long-Term Care Options and Planning in a Nutshell

First, some items to ponder about age demographics in the United States from an article[1] by Thomas Day, Director of the National Care Planning Council:

As if the current lack of planning for long-term care were not a great enough burden on the immediate or extended family, the failure to plan, for the current generation of baby boomers, could be even more devastating on spouse or family in the future. Here is a list of factors that will make long-term care in the future an even more pressing burden than it is today.

  1. We are living longer. The population segment of the “very old”, older than age 85, is the fastest-growing age group in the country. The older the person, the more likely the need for long-term care and the more likely a need for care which lasts not just months but years. Over 50% of the age group over 85 is receiving long-term care.
  2. The older the person the more likely the risk of onset of dementia. The Alzheimer’s Association estimates about 46% of people over the age of 85 have dementia or Alzheimer’s
  3. The number of overweight and obese people in the United States is increasing dramatically. Obesity is a major contributor to disability and poor health in the elderly. Estimates are that the effects of obesity will increase nursing home enrollments by an additional 15% to 20% by the year 2020.
  4. The ranks of the elderly are growing larger. The population of elderly over 65 will double from about 37 million people today to about 77 million people in 2035, 30 years from now. Based on current estimates of the rate of long term care this means that in 30 years about 17 million elderly Americans will be receiving long term care.
  5. It is estimated that 6 out of 10 people will need long term care sometime during their lifetime.
  6. With a large and growing number of single person households there is no spouse and oftentimes no children to provide care. About 40% of the population is single.
  7. The birthrate is going down, families are getting smaller. The combination of fewer children, the increasing number of single person households and a growing number of elderly will eventually create a situation where there are more people needing care than there are available family caregivers.
  8. Out of approximately 116 million women in this country who could be employed in the workforce about 60% or 69 million are employed.  With women being the traditional caregivers, this means only about 40% of traditional caregivers are at home and able to provide long term care for loved ones without having to juggle a work schedule as well.
  9. Children are moving far away or the elderly are relocating after retirement and this makes it difficult or impossible to provide the resulting long-distance caregiving.
  10. The number of elderly as a percent of the population is growing larger putting a burden on the tax base and availability of money for government programs and the availability of younger caregivers. Over the next 50 years the elderly will grow from about 12% of the population to over 20% of the population.
  11. Medical science is preventing early sudden deaths which often results in a prolonged life with impaired health and a higher potential need for long-term care.
  12. Government programs are already stretched thin for long-term care services and will experience even greater stress on available funds in the future.
  13. The government does not seem inclined to provide a national long-term care insurance plan
  14. There is a worldwide trend, in all major industrial countries, to not deal with the problem of long-term care and very few countries, including the United States , have taken the initiative to adequately address the problem.
  15. Most healthy people in their 50s and early 60s prefer to ignore this future problem and their lack of planning will further burden public programs in the future.

(source for statistics: statistical abstract of the United States, 2005) (Emphasis supplied)

Houston, we have a problem–at least most of us do, or will soon. And unfortunately, time is (probably) not on our side. The problem? Long-term care. Such care runs the gamut. Home care, whether by spouse, children, friends, in-home nursing, and the like. Assisted-living facilities. Nursing home care. Combinations of these. Whatever the method, there’s a substantial cost involved, whether it’s an expenditure of time and money caring for a spouse at home—and the possible loss of income that involves—or full on 24/7 nursing home care, which can run as high as $10,000 per month or higher.

There are essentially four ways to pay for long-term care—if it’s needed:

  1. Private or self-pay,
  2. Long-term care insurance,
  3. Medicaid, and
  4. Veteran’s Benefits.

The drawbacks to private or self-pay are obvious: few people have the money to pay $4,000 – $10,000 per month for LTC without depleting retirement funds beyond repair. If family members can pitch in—and they often do—the burden may be bearable.

Long-term care insurance—whether it’s tradition LTCI or life insurance with an LTC rider—can reduce or even eliminate the burden, and if it’s purchased early, the monthly cost can be more manageable than private pay, and better yet, the cost generally comes during the insured’s working years. That said, LTCI can be hard to come by. Many insurers have left the playing field. Nevertheless, if the client is young enough and still healthy, it’s an option worth looking at.

Medicaid can step in the often huge gap between needs and resources, but as I’ve pointed out above, that help comes with some very strong strings attached.

Veteran’s Benefits are for veterans of course and come in two varieties: Service-related benefits and VA Improved Pension. The first is for veterans with service related disabilities, the second is for eligible wartime veterans and is capped. Veterans who qualify should plan on eventually applying for Medicaid.

I Can Help

If you would like to explore these or other ideas further, schedule a virtual meeting with me by clicking on the red button in the lower right-hand corner of this webpage for a free consultation.

[1] https://www.longtermcarelink.net/eldercare/why_long_term_care_planning.htm accessed March, 21, 2019.

Estate Planning Seminar at Orem Public Library

I’m presenting a seminar at the public library in Orem, Utah tomorrow, Wednesday, March 1st at 7 PM. The topic will be “Wills, Trusts, and Other Documents Necessary to a Good Estate Plan.” I’d love to see you there.

Unfortunately, I just learned that the library’s calendar was hacked yesterday, so you’ll have to trust me on this one.

Estate Planning Seminar at Pleasant Grove Library

I’ll be presenting a seminar on DIY — Do It Yourself — Estate Planning at the Pleasant Grove Library on Wednesday, March 8, 2017 at 7 PM. Come an enjoy the discussion. The address is 30 E Center St, Pleasant Grove.

If you have a question about wills, trusts, and other aspects of estate planning, maybe I can answer it.

Caregivers, Does this Describe You?

Northwestern Mutual recently published a survey of caregivers, those who take care of the infirm and aged. Among other things, this is what they found, according to Financial Advisor magazine:

Caregivers comprise a massive population segment, with 40 percent of the survey’s 1,003 respondents saying they were caregivers. Another 20 percent expect to step into that role.

While only 25 percent of future caregivers thought of financial support as a key attribute of caregiving, 64 percent of current caregivers ended up providing some level of financial support to their charges. Expenses related to giving care comprised nearly one-third of their budgets, according to the current caregivers.

Most future caregivers, 70 percent, expect to incur financial costs, yet only 60 percent said that they were equipped to handle the potential financial aspects of caregiving. (Emphasis supplied)

Just one more reason for people–both caregivers and those who will need it–to plan for the future. Long-term care insurance, life insurance, trust planning anyone?

About that Power of Attorney

A power of attorney gives someone else–the agent–the power to act in place of the person granting the power–the principal. A durable power of attorney is a power that continues even after the principal becomes incapacitated, hence the adjective “durable.”

If you or your attorney is drafting a power of attorney in Utah or any other Uniform Power of Attorney Act state, be careful and be very specific; make sure certain grants of power are “expressly” authorized in the document that allows the agent to act in the principal’s behalf.

To wit, Utah Code §75-5-503, signed into law in 2003, says:

A power of attorney may not be construed to grant authority to an attorney-in-fact or agent to perform any of the following, unless expressly authorized in the power of attorney:

(1)  create, modify, or revoke an inter vivos revocable trust created by the principal;

(2)  fund, with the principal’s property, a trust not created by the principal or by a person authorized to create a trust on behalf of the principal;

(3)  make or revoke a gift of the principal’s property, in trust or otherwise; or

(4)  designate or change the designation of beneficiaries to receive any property, benefit, or contract right on the principal’s death. (emphasis supplied)

General, broad language probably won’t do. The grant in these four cases must be express because these four cases present too great an opportunity for abuse. I’ve hedged just a little here because the one Utah Supreme Court case on this point seems to leave the door open, if only slightly, to less express language, language typical of a broad grant of power.

In fact, in analyzing the language of the durable power of attorney at issue in the Burrows case, the Utah Supreme Court talked favorably about both the broad and the express grants of power:

¶ 17 The durable power of attorney expressly granted Ray authority to gift Ida’s personal property. The two-page instrument gives Ray broad authority over Ida’s assets and personal property. It authorizes Ray “ in any and every way and manner [to] deal in and with goods, wares, and merchandise, [choses] in action, and other property in possession or in action, and to make, do, and transact all and every kind of business of what nature or kind soever.”

¶ 18 More specifically, the power of attorney expressly authorizes Ray “ to gift property whether real or personal.” . . .  131 P.3rd 9 (Utah 2008)

If I were arguing this proposition before another court, I would argue like a mother bear that even the broad language does the job according to Burrows. If I were drafting the power, I would make sure the power of attorney expressly authorized each of the four powers outlined in §75-5-503, that is, if my client wanted to give those powers to his agent.

Some Things I Learned Answering Questions on a Forum for Asking Legal Questions

Yikes_2016-03-07_0843So I sometimes forget that everybody’s smart, just on different subjects. For example, I don’t know much about physics. My teachers tried, but my head could only hold so much gravity and speed of light and such. Well, today I was online in an online forum where non-lawyers posed legal questions to attorneys. These were real life people experiencing real life problems that involved the law in some way or the other.

Now let me be crystal clear: I don’t think these people are dumb. To repeat: we are all “smart,” just on different things. I happen to know a lot about the law, but boy am I at a loss about some other subjects (heck, even about some legal subjects). With that, here are a few things I learned while answering questions:

  1. Many, if not most people, don’t realize that estate taxes are no longer a concern for most of us. Did you know that you and your spouse must be worth almost $11 million before the tax man comes knocking? Yes, you may need to do some planning to make sure you take full advantage of that $11 million threshold, but still.
  2. Many people don’t realize that the First Amendment doesn’t protect them from employers, friends, parents, and the like from infringing on their free speech rights. No, the First Amendment protects us from the government infringing on our rights. And even then the right is not absolute.
  3. More than a few people confuse a living will with a plain old will, also known as a last will and testament. A living will is a document that tells your family and doctor whether you want life support and such should you become incapacity and unable to speak for yourself. A will or last will and testament is what you use to appoint guardians for your children and to give your property away when you die. You can read more here.
  4. A lot of people–especially people down on their luck financially–aren’t aware of the legal resources available to them that are free or at a reduced cost, nor are they aware of the state agencies that might be of help to them–child protective or family services, for example. For the record, in Wyoming you can go to the Wyoming State Bar to find free or reduced-rate legal services. In Utah, you should go here.  In Wyoming, you can find child and family services here.  In Utah, you’ll find them here.
  5. Finally, too many people are way too quick to pull the trigger; that is, they get angry and immediately shout “Medic!!!” I mean, “Lawyer!!!” To those I say, try to work out your problems by yourself and amicably first, especially if it’s family, then resort to the law. But the corollary to that is, if the proper response is legal, then hire an attorney. Trust me on that one.

Now where do I go to find out how fast the speed of light was back in the days of horse and buggy?

Estate Planning: Are You Prepared for Incapacity?

Not too long ago, estate planning was all about the estate tax tail wagging a sometimes reluctant dog. That was unfortunate for a number of reasons, among them, the focus on estate taxes caused planners to look beyond all those who had no estate tax problem. Likewise, those without that estate tax problem walked around unaware that they probably should do some planning nonetheless.DSC02461

Did I just describe you? If so, maybe it’s time think again about the need to do some estate planning.

Though avoiding estate taxes still motivates some (very well off) people to plan, the driving force behind estate planning these days for most people is one or more of the following. The desire to

  • Maintain control of their property while they’re alive and well;
  • Provide for themselves and their loved ones if they become disabled or incapacitated;
  • Give what they have
    • To whom they want,
    • The way they want,
    • When they want, and
  • Minimize the impact of professional fees, court costs, and taxes–typically income taxes first, then estate.

That second item, the one about providing for your family if you’re disabled or otherwise  incapacitated, is a big one. Did you know that a 20 year old has a 1 in 4 chance of becoming disabled before they retire? It gets worse with age. According to a 2005 AARP study,

The lifetime probability facing a 65 year old of developing a disability in at least two primary activities of daily living for at least three months or becoming cognitively impaired is 44 percent for males turning age 65 and 72 percent for females. Therefore, women face a 64 percent higher risk than do men.

A well-drafted estate plan will address those probabilities and ensure that you and your loved ones are better able to deal with a disability or mental incapacity should it happen. That plan will include

  1. The designation of a trustee and/or agent to manage your property while you’re unable;
  2. A living will, so your doctor and loved ones will know what you want done when you’re unable to communicate; and
  3. A health care power of attorney, so your health care agent can do what you would do in the same circumstances–if you were able.

Those last two items collectively are known in Utah and Wyoming as an advance health care directive by the way. Do you have one in place? Do you have a trustee or agent to manage your property in case you no longer can? Then maybe it’s time to do some estate planning.



Powers of Attorney, Living Wills, and Such: The Problem of Staleness

Remember when you were in your teens and still driving your parents’s cars? Every Friday night, it was the same routine, “Dad, Mom, can I use the car tonight?” And either the keys would come flying your way–or they wouldn’t. But when they did, you were off in a flash and out for the night.

IMG_2773Did you ever try to take advantage of that permission slip a day or two later? You know, as in, “Well, they gave me permission on Friday, it must be okay today”? I’ll bet you tried something like that at least once. I know I did. What was the result?

For me, it was a lecture and, if I recall correctly, my car privileges were revoked or some such. Why? The conditions that prevailed when my parents gave me the keys on Friday no longer existed on Tuesday. Now, Mom needed one car to go to a church function. Dad needed the other car to do business 20 miles away. In other words, my permission slip had grown stale.

Ever eaten stale food? Last night I cooked some boxed scalloped potatoes that were way past their “best-used-by date,” as in five years past. I can still taste the taste of stale in my mouth. Yuck.

Staleness can be a problem with powers of attorney, living wills, and the like as well. According to Jeremiah Barlow, an attorney with WealthCounsel.com, many financial institutions and hospitals won’t accept a power attorney, living will, and other such document if they’re more than two or three years old because, well, conditions may have changed. The principal–the person granting the power to the agent–may no longer have the need for an agent–the person granted the power–to do things for him. Or he may want someone else to do it.

Or, as the financial institution or hospital may be thinking, maybe the power of attorney or living will has been revoked or changed by the principal.

And so, it’s good practice to update–literally–any of those documents you may have signed years ago. Make them fresh again, so your bank or hospital will accept them. Update them, so they work when they’re supposed to.


Directing Your Health Care with an Advance Health Care Directive–with the Stress on the Word Advance

I have an 87 year old client who was born, raised, and has lived in Wyoming her entire life–that is, except for the five or six winter months she has spent in southern Utah each of the last few years. She’s at that age when her health and her health care are becoming an ever more important concern to her. One of those concerns, of course, is what to do should she become sick and unable to express her wishes about end-of-life decisions. What can she do to make those decisions now and insure that her wishes are carried out by her loved ones and doctors?

The Tools. The answer–in Wyoming, Utah, and most other states–is the Advance Health Care Directive, a document or documents in which an individual does one or both of the following: 1. Appoint and give authority to a health care agent (a son or daughter, for example) and 2. Give instructions about those difficult end-of-life decisions (whether to have a feeding tube, for instance).

As in most areas of medicine and the law, the terminology or jargon people use to describe these documents can be confusing–it certainly confused me when I first began studying the subject. But it the end, it’s all rather simple. The first document, the one appointing a health care agent, is no more than a very specific power of attorney or POA. If it’s your POA, then you are the principal and the appointed person is your health care agent. Essentially, you empower your agent to act as you would act if you were still able, to stand in your shoes in other words.bp-cuff

The second document, the one with all the instructions, is the so-called living will. Generally, the living will tends to be more specific than a health care power of attorney. Don’t want feeding tubes, CPR, artificial ventilation, that sort of thing? You say so in a living will. That’s not to say, you can’t be that specific in a health care power of attorney. But think of it this way: with a health care agent, you are giving authority to act in your place to someone you know and who knows you–probably very well. That person may not need very specific instructions because of that knowledge. A living will, however, tends to be directed more generally at not only your family and friends, but also at doctors, nurses, and others who may not know you so well. With people like that, you want to be very specific.

Both Wyoming and Utah have fill-in-the-blank forms for both documents. They’re free and generally in the same booklet or file. Hospitals located in each state often have their own versions. Here’s one from Wyoming Medical Center, a hospital based in Casper. Utah-based Intermountain Health Care provides similar forms. As both hospital-provided forms stress, you don’t have to both appoint an agent and give directions. In fact, at the beginning of both forms, you’ll find a section where you can say that you DO NOT want to choose an agent for your health care.

For what it’s worth, in many, if not most, cases, both documents should be used, the living will/instructions document backing up the health care power of appointment. In that case, the living will is essentially saying, “and to make myself perfectly clear: I have discussed these matters with my health care agent, and what we discussed is reflected in my living will. That said, if there’s any chance that a provision in my living will contradicts any authority I granted my agent in my power of attorney, the document with the more expansive powers governs.”

Do You Need a Lawyer to Fill Out the Forms? No. The forms I’ve linked to above meet the requirements of state law. So long as you fill them out correctly, sign, and have them properly witnessed, they are better than nothing–much better.

But the question isn’t do you need a lawyer? The question is should you consult an attorney about a health care directive? I think the answer is yes. For one, a good advisor can help you carefully consider the many issues that come into play in choosing a health care agent. Good attorneys are trained to think dispassionately and out of the box. Not everyone is suited to make end-of-life decisions, for example. A good advisor will help you choose someone who is. Likewise, deciding in advance whether you want a feeding tube or CPR are hard choices. A good advisor who has been down that road before with other clients, will be a good guide for you.

Beyond that, health care directives are just one part–an important part–of a more comprehensive estate plan. As I make clear on this website’s home page, virtually everybody needs an estate plan. Read that page again and see if you agree. If you see yourself on the list for “Do I need estate planning?” then we should talk–about that plan–and an advance health care directive.

But back to my 87 year old client. Remember, she now spends significant time in both Wyoming and Utah and has doctors in Montana. In our planning together, one of her concerns is that her wishes for end-of-life health care be carried out whether she is in Wyoming enjoying the great summers, in southern Utah soaking in the warm winter sun, or shopping in Billings, Montana. Though the laws governing advance health care directives are quite similar in all three states, there are some important differences, differences that could call into question a Utah directive in Wyoming or Montana and vice versa, at least in the eyes of an overly careful hospital administrator.

That said, all three states have provisions in their laws that either grant reciprocity to health care directives from other states or seem to. Utah law states that a health care provider or facility,

may, in good faith, rely on any health care directive, power of attorney, or similar instrument (a) executed in another state . . . (Utah Code §75-2a-121.  Reciprocity — Application of former provisions of law).

Montana law is equally explicit:

 A declaration executed in a manner substantially similar to 50-9-103 in another state and in compliance with the law of that state is effective for purposes of this chapter (Montana Code §50-9-111. Recognition of declarations executed in other states).

Wyoming law is not so clear. In fact, an attorney I spoke with at one of Wyoming’s largest hospitals suggested it may take two sections of the Wyoming Code to do what Montana and Utah did in one, and even then things remain a little murky. In fairness, the attorney also told me that particular hospital honored directives from other states as did the other Wyoming hospitals the attorney was aware of.

Here is the relevant wording of the two sections of the Wyoming Code I just referred to. You be the judge:

§35-22-408.  Obligations of health care provider. . . . a health care provider or institution providing care to a patient shall:
     (i) Comply with an individual instruction of the patient and with a reasonable interpretation of that instruction made by a person then authorized to make health care decisions for the patient . . .


§35-22-416.  Uniformity of application and construction. This act shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject matter of this act among states enacting it.

Like I said, it appears that all three states recognize directives from other states. Nevertheless, when my client and I are finished, she will have an advance health care directive–both the POA and the Living Will–that complies with the provisions of the law governing such directives and powers of attorney in all three states.

Updated to include the relevant statutes from Utah, Wyoming, and Montana and to discuss reciprocity in more detail.


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