Elder law attorneys have known about Caregiver Agreements for a long time, but a recent article in the Wall Street Journal will hopefully raise caregiver awareness of this useful contract; especially, as the article mentions, given the “still-fragile” state of the economy. A Caregiver (or Employment) Agreement “should document a caregiver’s responsibilities and hours and set a rate of pay that’s in line with local practices. Both the caregiver and care recipient should sign the contract and disclose it to the rest of the family.”

An agreement of this sort can be useful not only for the care-giver and the cared-for; it also comes in handy if you think you may need to rely on Medi-Cal (known as Medicaid in other states) to cover nursing home costs sometime in the near future.

According to the article, “Before Medicaid will pick up the tab for nursing-home costs, it requires applicants to recoup certain payments made to relatives over the previous five years — and use the money to pay the nursing home… But if payments to relatives are made under the terms of a written employment agreement, often called a personal-care contract, the law allows it.” While the recoupmement term is different in California, the point is well-taken.

But remember, “to pass muster with Medicaid, it’s important to have such a contract in place before the services are rendered.”

This is why it is extremely important to talk to an attorney who is well-versed in elder law and Caregiver Agreements before any contracts are signed or money changes hands.

1. Estate Planning is only for rich people. This is probably the single most common estate planning myth there is—and it is a myth.   When people add up the value of their home, their life insurance, savings, retirement account, etc., etc., etc. they often find that they are much closer to being a “rich person” than they thought. Not only this, but as we’ll get into in more detail below, estate planning is not only about saving on estate taxes, it’s also about controlling your wealth and protecting your own needs when the unexpected occurs. It is also about planning for long term care, an expense often overlooked.

2. “I have plenty of time.” AKA: Only old people need estate plans. First of all, just because you’re young doesn’t mean bad things can’t happen to you. But you know this, and anyway, this post is not about fear. Unexpected tragedies aside, an estate plan is useful even when you’re young because an estate plan is not just about death. A good estate plan will include not only a will, but also a healthcare directive and HIPAA Authorization (both of which are useful if you find yourself facing a surprise stay in the hospital), Power of Attorney documents (which you may need if you ever travel outside the country or are otherwise unable to sign for yourself on financial or legal documents), and legal documents relating to minor children (such as medical authorizations—an essential document if you leave your minor child with a babysitter for any extended period of time.)

3. Married people don’t need estate plans. While it is true that a married person with straightforward wishes for the distribution of their property has less need of estate planning, it does not necessarily follow that they can skip estate planning altogether. Under normal circumstances, any jointly held property will pass to the surviving spouse upon the death of the first spouse… But what happens if the surviving spouse gets re-married? What about the property you would specifically like to go to your children, or to your parents or siblings? And what if both you and your spouse die together? These are the reasons why even married people should consider drawing up at least a simple plan.

4. All I need is a quick will and I’m done. A quick will is certainly better than no will. And if you want to be technical, you don’t even need a quick will; after all, your state of residence has a plan already in place for you. The problem is that it may not be the plan you want. There is a saying that “anything worth doing is worth doing well.” This goes for wills (or any other legal document) as well. If you want the basics you can have the basics. But if you want the best, you’re going to need to spend a little more time on it.

5. Estate Planning is only about money. Although money is often one of the main motivating factors behind creating an estate plan, money is absolutely not what estate planning is all about. Estate planning is about people. It’s about your family and doing what’s right for them. Estate planning is not just about saving your family from estate taxes, or making sure Junior gets the house; it’s about leaving them peace of mind. A well thought-out will or trust saves them from a lengthy probate process, but also reassures your children that they are doing what mom or dad really would have wanted. And sometimes a well designed plan might include a personal statement of values and wishes for your spouse and children, a writing that is sometimes called a memorandum of intent.  Indeed, such a personal statement can give you the opportunity to express certain things that you may not have been able to express during life. An estate plan is full of documents designed not just to save you or your heirs money, but to allow you to express your wishes and values even after your death. Estate Planning is about more than just money—it’s about family, legacy, and love.

Write down your goals. You may have a number of intertwined goals for your estate plan (this is especially true for blended and multigenerational families), or one simple-but-important goal such as “ensure my minor children have a place to go” or “keep the family business intact.” Knowing your goals from the outset will make all subsequent decisions much easier.

Make a list of the people you trust. Throughout your estate plan you’ll be nominating people to take over financial, healthcare, and guardianship responsibilities if something happens to you. Have a rough list of people you would trust in these roles. Begin with your initial goal and go from there. For example, if your initial goal was guardianship of minors, make a list of people you would trust with the care your child, and move from there to financial decision-makers, etc.

Make a list of people you don’t trust. If you’re having trouble coming up with people for the list above, it sometimes helps to consider the people you would NOT want to be responsible for your child, your finances, or your healthcare. Write down those people and work backward from there. If your kids must be kept from crazy Uncle Joe at all costs, would your cousin Emily be an acceptable alternative, even if she does have a different parenting style?

Know your assets. Make a list of all your assets and their approximate values. This will help your estate planner determine what kind of asset protection you need in your plan. Assets include:

• Your Home
• Investment/Vacation Property
• Bank Accounts
• Savings/Investment Accounts
• Retirement Accounts
• Life Insurance
• Family Owned Business
• Etc.

Bring In the Professionals. Estate planning is a very technical process, and the laws may frequently change, so you’ll definitely want professional help with the details of the process. The good news is that now that you’ve completed the beginning steps, the follow-through with your chosen professional advisor will be a snap! If you already have a relationship with a trusted attorney, insurance agent, financial advisor or CPA you’ll want to start there. Let that person know your goals and that you’re ready to begin planning in earnest; he or she will be able to guide you onto the next steps, or give you the name of an estate planning professional who will help you build your ideal plan.

Although it looks overwhelming from the outset, estate planning is really just a series of small steps, each of which leads you to the achievement of your ultimate goal: Preserving your assets and protecting your loved ones. Now that you know it’s so easy… what are you waiting for?

A recent article from CBS news suggests that although women are actively involved in family and household finances, they are less likely to be involved in long-term financial decisions. According to the article, although many women “know how to spend and get by on a short term basis… they have a time getting a grip on their long term saving and planning.” Of course this is a generalization, and won’t apply to everyone; but considering the importance of the topic, it is definitely a worthwhile subject for discussion.

Here are a few statistics to consider that impact women and their long-term financial decisions:

• Older women (65+) outnumber older men by 22.4 million to 16.5 million. (Administration on Aging)
• Poverty rates are higher among older women than older men by 20.4 to 13.1. (U.S. Census Bureau)
• The median weekly earnings of full-time wage-earning women is $657, or 80 percent of men’s $819. (U.S. Dept. of Labor)
• Not to mention that on average, it is the woman of the family who will end up putting her career on hold for caregiving duties at various times in her life (either to care for young children or aging parents.)

Put all of this together and it means that women need to take control of their finances, not the other way around! Luckily, this may not be as difficult as you think. The CBS news article mentioned above has some suggestions on how to take charge of your finances; but beyond that, planning your estate can be a huge step toward planning for your financial future as well, because any estate planning includes taking stock of of your financial assets—including savings accounts, retirement assets, individually owned assets as well as those owned jointly by a married couple.

We encourage women (and their families) to let their estate planning contribute to their financial future—it’s not just about how your assets will be distributed after your death, but also what steps you’d like to take to preserve those assets during your lifetime.

Now, “love” may sound sappy and sentimental, but when it comes down to it love truly is the only reason we would spend time and money thinking about the unpleasant subject of death, and planning for a time that we won’t be around to enjoy life with our loved ones.

Estate Planning Ensures Your Minor Children Have a Home

Part of creating your estate plan includes nominating guardians for your minor children. Without this nomination, your children are at the mercy of the court should anything happen to you. Estate planning also allows you to ensure that your minor children and their guardians have the financial security they need to make a smooth transition during a difficult time.

Estate Planning Preserves Sibling Relationships

There are fewer things more stressful to a family than the death of a beloved parent. And it is at this time more than any other that fights are liable to break out between normally loving siblings: Fights over what to do for mom’s funeral, over who gets treasured heirlooms, over who dad would have wanted to distribute the estate. All of these fights can be easily avoided by creating an estate plan that spells out your wishes in clear and loving terms.

Estate Planning Allows You to Provide for Your Children and Grandchildren

You spend a lifetime raising and caring for your children knowing that someday, when you’re gone, they’ll have to fend for themselves. Creating an estate plan allows you to leave a little bit behind, a cushion your children can hold in reserve in case of emergency. An estate plan allows you to continue providing for your children even after you’ve gone.

Estate Planning Leaves an Enduring Legacy

Estate planning is not just about finances and paperwork, it’s about relationships. Creating your estate plan allows you to brush away life’s minor details and minutia and focus on what’s really important, allowing you to connect with your loved ones in a more meaningful and lasting way than ever before. Your estate plan expresses your enduring values, leaving a legacy for your family that will live on for generations to come.

Anyone who pays taxes knows that your marital status matters to the state and federal government. Your marital status also impacts your rights when it comes to insurance, privacy, pensions, and even probate. For example, in California the communty property of a married person who dies without a Will,  will  pass to their spouse, and separate property will be allocated between their spouse and children. *    This is not necessarily the case for unmarried couples. Similarly, in an emergency medical situation a spouse will have access to information about his or her injured spouse, but unmarried couples do not always have this same privilege. Although there is good reason behind these privacy laws, it can be particularly distressing when couples who have lived together for years may suddenly have trouble getting medical staff to recognize their partner when a medical decision needs to be made.

Luckily, your estate planning attorney can help circumvent some of the potential problems unmarried couples may face in case of incapacity or upon death. Executing an Advanced Health Care Directive or Health Care Power of Attorney will ensure that medical personnel recognize the authority of a trusted partner to make medical decisions for you. Similarly, by creating a Will or Trust you can nominate the person you want to act as executor of your estate upon your death, and who the beneficiaries of your property will be, regardless of whether you have a marriage license or not.

The issue of marriage is one that is obviously very close to the heart, but estate planners see it on a practical level as well. In the legal world of estate planning our goal is to ensure that your wishes for end of life health care and final distribution of wealth are honored—regardless of your marital status.

*Please note: Probate laws will vary from state to state—be sure to talk to your estate planning attorney about the laws specific to your state of residence.

If you are considering a CCRC for yourself or an elderly loved one, you may want to read this article in the WSJ, which mentions that although more and more older Americans are drawn to the benefits offered by a Continuing Care Retirement Community, those benefits “often come at a steep price and ‘considerable risk.’”

The article goes on to mention that “So-called CCRCs—which typically offer fine dining, health clubs and on-site long-term care—have grown in popularity along with the aging of the population, particularly among the upper-middle class and affluent,” but that “the economic downturn is making it tougher for potential new residents to sell their existing homes and fill openings in new and expanded communities, which are generally regulated by state governments. As a result, low occupancy levels are challenging the industry’s financial models.”

We mention this because many of our clients are at a time in their lives when they or their elderly parents are looking into long-term care living situations, and we see how difficult it is to sort through all the choices and find a place that fits. Not only is quality of life an important factor (maybe the most important factor), but for many people the cost of the place they choose may mean the difference between leaving their children an inheritance and dying penniless.

We urge any of our readers who are in the market for long-term care living arrangements to look carefully at all their options; ask questions, do the research, and don’t be afraid to ask for help or a second opinion.

Paula Span in her article on the NY Times New Old Age Blog suggests that “what variety of facility an older person lives in may matter less than we’ve assumed. And that the characteristics adult children look for when they begin the search aren’t necessarily what makes a difference to the people who move in.”

Span’s suggestion is based on (among other things) a recent study published in The Journal of Applied Gerontology, which found that among 150 Connecticut residents living in various long-term care situations (assisted living, nursing homes, residential care homes), the type of living situation itself made little difference in the resident’s emotional well-being. Rather, happiness and contentment was more a matter of “the characteristics of the specific environment they’re in, combined with their own personal characteristics — how healthy they feel they are, their age and marital status.”

Logically enough, a resident of a long-term care facility of any kind is more likely to report satisfaction and comfort if they had a hand in choosing their living situation, if they were part of the decision making process. In fact, it is the process itself—researching options, visiting facilities, considering current and future social and physical needs and how they will be met—that is the beginning of acclimatization.

Whatever your choice, you’ll want to know that you have options for paying for your long-term care living situation. Medicare.gov has published a chart summarizing and comparing the various options for long-term care financing. We find that the chart falls short, however, in the way it outlines the features of  “Medicaid”, called Medi-Cal in California, as it does not address planning options that are currently available to qualify for the subsidy and protect your home and other assets.  For more on this topic, see our “Consumer’s Guide to Medi-Cal Planning”.

It didn’t always used to be this way. The last will and testament of the great Jane Austen, for example, was only one paragraph long:

I Jane Austen of the Parish of Chawton do by this my last will I testament give and bequeath to my dearest sister Cassandra Elizabeth everything of which I may die possessed, or which may be hereafter due to me, subject to the payment of my Funeral expences, & to a Legacy of £50. to my Brother Henry, & £50 to Mde de Bigeon – which I request may be paid as soon as convenient. And I appoint my said dear sister the executrix of this my last will & testament.

Jane Austen

April 27 1817

Although this simplicity may have worked in 1817 England, it isn’t practical in the here and now. Things just aren’t that simple anymore. First of all, although Austen appoints her sister Cassandra as the executrix of her will, the will itself neglects to specify what powers are included in that appointment, leaving Cassandra effectively unable to carry out Austen’s wishes. Secondly, the will neglects to make alternative provisions—what if Cassandra had unexpectedly died before Jane? Also notably lacking (from our contemporary perspective) are any provisions for estate taxes. And finally, discerning readers may notice that the will does not include the signatures of any witnesses, something which would have been required if her will had been type-written.  Likely, it was only because her will was written entirely in her own hand, and her hand-writing was later authenticated by witnesses who authenticated her hand-writing, was the will upheld as valid.  In California, a type-written will must always be signed by at least two witnesses; the only exception  to this requirement is a “holographic” will, which is a will that is completely handwritten by the testator. 

We all may long for simpler times, especially when it comes to something most people think will only benefit their heirs and not themselves; but many of the rules and regulations that are dismissively thought of as “hoops to jump through” are there for your best interest. They exist to protect your heirs and your legacy from fraud, misuse, greed and neglect. Far from being a chore, creating a thoughtful and legally valid will these days is actually an act of love… One might even say it’s a matter of sense and sensibility.

Improving technology may never be able to remove the need for this decision entirely, but it may be able to postpone it a little. A recent article in the New York Times describes some new technologies that help adult children monitor their aging parent right inside the home, therefore removing the need (or at least delaying the need) for physical around-the-clock supervision.

One of the new technologies mentioned in the article (called GrandCare) “allows families to place movement sensors throughout a house. Information — about when doors were opened, what time a person got into and out of bed, whether there’s been any movement in a room for a certain time period — is sent out via e-mail, text message or voice mail.” It is this kind of in-home monitoring that may allow seniors to remain in their homes longer.

Some seniors have reservations about these new technologies, however, something that they consider to be an invasion of privacy. Nancy Schlossberg is quoted in the article as comparing these new technologies to nanny-cams, “Big Brother is watching you — there’s something about it that’s very offensive.” Some seniors may agree with her, but if it comes down to a choice between technological monitoring or moving to a nursing home they may find that “Big Brother” is the lesser of two evils.

Kimberly Palmer, author of this article in U.S. News and World Report says that “bringing up the estate tax with your aging parents can be as awkward as inquiring after their sex life.” Talking about any kind of estate planning with your parents can indeed be awkward, but as Palmer points out it is extremely important… especially now when the repeal and reinstatement of the estate tax means that “ignoring the issue could mean giving Uncle Sam a big chunk of one’s estate inadvertently.”

So how can you bring up the topic of estate planning with your parents without them thinking that you’re more interested in your inheritance than your parents’ well-being? The article mentioned above has a few ideas, including:

• Talk about your own estate planning experience and how relieved you are that everything is in place.
• Talk about recent celebrity deaths that have been in the news: George Steinbrenner, Michael Jackson, etc.
• Mention how concerned you are about the uncertain estate tax situation.

Of course, the best policy is to just be honest. Tell your parents truthfully that you are concerned about their financial stability, about keeping the family peace, about your grasping uncle Mickey taking the antique dining set you’ve loved since you were a child. Explain that you only want to help… but remember that the choice is ultimately theirs. As author Deborah Jacobs says in the article, “if they don’t want to talk about money, then you need to drop it and accept that this is not something you should pursue… If you have tense times towards the end of your parents’ life because you’re talking about estate planning, it will stay with you forever, and it’s just not worth it.”

Not quite.

Studies have shown that even with perfectly executed healthcare directives many patients receive treatment they specifically did not want; this is because their wishes are unclear or have not been communicated to medical providers. Some states have found a way to prevent this miscommunication… with a program called Physician Orders for Life-Sustaining Treatment, or POLST. “The program involves an innovative medical form that is signed by a doctor, allowing patients to specify what kind of care they want at the end of life, such as feeding tubes and other medical interventions.”

The key here is that the medical form is signed by the patient’s doctor. This requires patients to include their primary care physician in their decisions regarding end-of-life care—or at the very least notify their physician of these wishes—with excellent results. A study published in the Journal of the American Geriatrics Society found that “patients with the Physician Orders for Life-Sustaining Treatment forms had much less unwanted hospitalization and medical interventions.”

This is wonderful news if you’re in a state like California or Oregon, which already has the POLST program in place. But it doesn’t mean you’re out of luck if you happen to reside in a non-POLST state. Even without the official POLST program, the key to having your end-of-life wishes respected is communication; communication with your doctor, with your family, and with the nursing or caregiving staff most likely to be attending you in an emergency situation.

If you are concerned about having your wishes followed, don’t hesitate to talk to your doctor and/or nursing staff about your living will or healthcare directive. Even have them read and sign off on it if necessary. After all, a healthcare directive is a wonderful tool, but it doesn’t do much good gathering dust in your filing cabinet. Make sure your family and medical staff are aware of your end-of-life wishes.