Growing older can be wrought with legal problems arising from health concerns, long-term care, and the need for appropriate housing. The good news, however, is that there are tools and strategies that older Americans can use to live as well as possible in the last decades of their lives.
So, what are a couple of the more common problems older Americans face, and how might they solve or at least alleviate them?
Who will make decisions for you when you are no longer able to make them yourself? The best way to address this problem is by searching for and retaining an experienced estate planning attorney who can draft the appropriate documents that you’ll need, including durable power of attorney, advance health care directives and the like. These documents allow others to make financial and health care decisions for you in the event you are incapacitated.
Another useful tool that estate planning attorneys use: A revocable trust is a device that gives one or more people – the trustees – the power to manage bank or investment accounts or real estate for one or more other people – the beneficiaries. For example, if a child is a co-trustee or successor trustee for a senior she can help manage the property or step in relatively seamlessly when necessary.
Of note, the disadvantages to a durable power of attorney or a trust are that the person may step in before you’re ready or that he proves himself untrustworthy. Keep in mind that since these arrangements give him access to your accounts, he could use the money for his own purposes. So choose wisely when appointing these positions.
Where will you receive long-term care if you need it? Beyond your own research, another great resource is your financial adviser, who can discuss the various types of senior housing arrangements available and the different levels of care that each one may address.
Research suggests that most seniors want to stay at home; but that can be expensive and introduce the risk of elder abuse. According to the Genworth Cost of Care Survey, home health care costs were on average about $4,000 per month in 2017, while an adult day care facility was about $1,500 per month.
For seniors who may need a little more help, assisted living is custodial care given in an apartment-like setting. However, it is basically a landlord-tenant type relationship with no federal protections, although there are state laws and licensing requirements. According to the Genworth Cost of Care Survey, an assisted living facility cost on average $3,750 per month in 2017.
Nursing homes, which is what most people think of when it comes to long-term care, are the last resort for most. It provides 24/7 medical care. According to the Genworth Cost of Care Survey, a semi-private room in a nursing home cost on average $7,148 per month in 2017, and a private room was $8,121. Of note, the Nursing Home Reform Act of 1987 provides numerous protections regarding payment and admission/discharge issues.
As the odds continue to increase that a person will need some form of long-term care in their lives, a continuing care retirement community (CCRC) is a nice option for those seeking one venue to provide the entire continuum of care. These types of facilities usually start with a place for independent living, with the ability to transition into services like assisted living and skilled nursing if and when needed as you age in place.
Of course, you’ll need to address the various financing options available and what’s most appropriate for you. You could, for instance, pay out-of-pocket — if you have the resources — for long-term care.
While many may believe they are covered for long-term care under Medicare, in fact the program has very limited coverage for these needs. For instance, it doesn’t cover long-term or custodial care, if that's the only care you need (most nursing home care is custodial care). Medicare does cover, however, care in a long-term-care hospital, skilled nursing care in a skilled nursing facility, eligible home health services and hospice and respite care. The Department of Veterans Affairs also provides some benefits to a few.
There’s also stand-alone long-term care insurance as well as long-term care insurance that’s combined with life insurance or an annuity. The trouble with these policies, however, is that they must be purchased while you’re healthy lest you be subject to denial of insurance or an excessive premium.
Some other long-term care options you can consider:
- Home- and community- based services
- Home care
- Home health care
- Accessory Dwelling Unit (ADU)
- Subsidized senior housing
- Residential care communities
- Assisted living facilities
- Continuing Care Retirement Communities
- Hospice & respite care
- PACE (Program of All-inclusive Care for the Elderly)
What’s the bottom line? The best way to alleviate the uncertainty many feel about growing older is to be prepared. The wisest among us recognize what lies ahead (including some form of cognitive decline and a need for long-term care) and address these concerns within their retirement plan.