Dear Quintin,
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I have been diagnosed with brain damage and dementia. A message to the younger ones: Last year I woke up and suddenly couldn’t spell or write legibly. Without warning. No symptoms. I’m getting worse so I want to protect my wife of 24 years and our finances. She will receive half of my pension and she has an even better pension than mine.
We have two long term care policies: one is paid up and the other is inflation adjusted at 5% with many positive clauses, etc. If I end up living a long time and exhaust my long-term care policies, currently worth $600,000, and we have to get Medicaid, will we have to sell our house to pay for Medicaid?
I don’t want my wife to lose everything. Will an Elder Law Attorney Really Help? I’ve heard mixed reviews and they come at a huge cost. Thanks for reading and a note to your readers from someone who knows: make your travel bucket list as soon as you can because you may not have as much time left as you think.
Love peace
Dear Love and Peace,
Keep all your options open and don’t embark on this journey alone.
You will need financial, legal, medical, social and emotional support. That will mean enlisting the help of loved ones and, yes, relying on a professional support network. You will need to reevaluate your financial goals, debt, savings, insurance, income and expenses. Take it a day, step by step. There are government programs that could help you, and you may be able to withdraw money from your IRA even if you are not 59½ without incurring a penalty.
Dementia is a symptom rather than a disease in itself. In fact, there are more than 100 diseases that could cause symptoms compatible with dementia. Alzheimer’s disease is the most common type of dementia, according to the Centers for Disease Control and Prevention. About 5.8 million people in the U.S. have Alzheimer’s disease and related dementias, including 5.6 million people age 65 and older and 200,000 people under age 65, according to the CDC.
There are other forms, including frontotemporal degeneration (FTD), that have received greater public awareness since the FTD diagnoses of former talk show host Wendy Williams and actor Bruce Willis became public. That is a common cause of dementia and is characterized as a group of disorders that occur with the loss of nerve cells in the frontal and temporal lobes. Aphasia, the inability to process words and communicate properly, may be a symptom.
Power of Attorney and Health Care Directive
There are several things you can do to pave the path ahead. Update your will and create a financial power of attorney. Don’t do a DIY version. As my colleague, MarketWatch reporter Beth Pinkser, pointed out, it’s complicated. She can read “The Power of Attorney Notebook.” You may also want to reevaluate your investment portfolio, based on your new financial plan and risk tolerance. (I assume you are not yet 65 and as such do not qualify for Medicare.)
An advance health care directive tells your doctors what steps you want them to take if you are unable to make those decisions for yourself. You may want to include your wife as your healthcare proxy to carry out those decisions. You’re a team, but serious medical issues can put a strain on a marriage, as this couple discovered, so she’ll need emotional support too. Also, make sure you have a successor for your wife on both your executive power and your healthcare directive.
Your wife will have many responsibilities: paying utility bills, paying her mortgage, keeping up with her healthcare and finances, while also managing her own life. Share her story with trusted family and friends and create a team: a community of people who can provide support, the latter of which should include informing the recipients of it. You can also write instructions for easy access to your devices, documents, and even your daily habits.
Long-term care insurance helps with expenses
You have done one key thing, something that should serve as an example for those who read your letter. You invested early in long-term care (LTC) insurance and have policies worth $600,000. (You do not specify whether you took out shared policies.) But having an LTC policy, more than anything, will help ease the financial burden that awaits you. The costs of nursing home care can vary dramatically depending on the type of care, state, and institution (up to $125,000 a year).
An elder law attorney could cost you between $100 and $600 an hour, depending on the type of services you need. An attorney and financial advisor will help you keep track of your assets, income, expenses, and projected long-term care costs, and help you plan accordingly. Financial planners typically have a professional network that includes lawyers and accountants, who can collaborate on your case and share valuable information.
“Many people find it difficult to decide if and when to put their long-term care policies into payment status, and that is very understandable since the policy has a limited term or cash limit and can lapse if you also put it into effect.” . early,” says Elizabeth Forspan, an attorney at Forspan Klear LLP. “However, if you combine this with a Medicaid plan, it can be extremely effective. You should check the specific Medicaid rules in your state and jurisdiction.”
Create a trust to protect your assets
“Maybe they can create a trust and get rid of some of their assets now to get through the five-year Medicaid look-back period and use their long-term care policy during that time,” he adds. “You most likely won’t be able to determine this on your own.” An attorney and financial planner can help you weigh the pros and cons. You may decide to keep your home. Selling any valuable asset, particularly a home, should be a last resort.
There are exceptions to the five-year look-back rule for medical eligibility: They include paying off debt, purchasing medical devices or home improvements to improve accessibility, according to the American Council on Aging, a company-funded Medicaid resource Eldercare Resource Planning. . But your income and other assets may also disqualify you from Medicaid eligibility. You can read more about Medicaid rules here.
Some states, including Florida and New York, have rules that exempt homes from assets calculated by Medicaid, under certain circumstances. In New York, you need to live at home while receiving care or plan to return home after receiving care. California eliminated its asset limit this year, making a person’s home automatically safe from Medicaid while they live; However, that does not mean you are safe from the Medicaid Estate Recovery Program.
I wish you and your wife the best on this journey.
You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com and follow Quentin Fottrell on X, the platform formerly known as Twitter.
The Moneyista regrets not being able to answer questions individually.
Previous columns by Quentin Fottrell:
‘Things have not been easy’: My sister is a hoarder and procrastinator. She is delaying the probate of our parents’ estate. What I can do?
‘I left a job I passionately loved’: My husband secretly created a trust that includes our house and his investments. That I have to do?
I have 1.5 million dollars in stocks and bonds. I asked my broker to convert my bonuses into cash. He didn’t do it and my wallet dropped by $100,000. Can I sue?
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