RegentAtlantic hosts an annual You and Your Aging Parents presentation featuring a panel of legal, financial, and healthcare experts. The Q&A session is designed to cover the multifaceted planning needs and solutions available to those caring for aging parents.
We look forward to hosting You and Your Aging Parents again this fall and are pleased to highlight key topics from prior panels below. Panelists included:
- Jane Newton, partner and wealth advisor, Regent Atlantic
- Jim Ciprich, partner and wealth advisor, RegentAtlantic
- Michael Thompson, estate planning attorney, Cestone & Thompson and member of the National Academy of Elder Law Attorneys
- Patricia Lombreglia, professional aging care manager, Pathways Care Solutions
Bringing the Family Together
Q. Let’s talk about the most difficult part of planning: getting family members on the same page. How can families navigate such emotional, personal issues?
Patricia: We try, depending on the circumstances with the client, to always start with the client, what are their wishes, and absolutely respect them as individuals. But sometimes, because of things like dementia or other kinds of medical impairments, the person is not able to weigh in as strongly with what they really want to do. I do a lot of work with psychosocial family dynamic mediation.
It’s just really trying to get everybody together to understand what the care needs are and to try to foster agreement around the care components. We try to take some of the things that may be hot-button points in the family dynamics and put them aside for the moment and just focus on, “Here’s what Mom or Dad’s situation is and what their care needs are,” and try to agree or facilitate a conversation. It’s really about putting the care around the person, and then trying to put some of the other contentious pieces aside and let people work on them in a different way.
Q. What are the steps busy people should take to begin planning for an aging loved one’s care?
Patricia: In aging care management, we call it an assessment or evaluation, but it’s really meeting the person, usually in their home or where they’re living. We look at all the aspects of their situation starting with their medical care.
- What medically is happening to the person?
- What kinds of conditions might they be living with?
- What co-morbidities, or chronic illnesses, does the person need to manage?
Through that evaluation, we can begin determining their needs today as well as in the future. Then, we can help them to be prepared and have a true foundation in place.
Planning for the Cost of Care
Q. Many people don’t realize how much it can cost to take care of an aging relative, particularly when it comes to medical care and housing decisions. What kind of numbers do we see?
Jim: According to Fidelity Benefits Consulting’s most recent report, a 65-year-old couple today would need about $280,000 for health care costs in retirement. That includes things like healthcare premiums, out-of-pocket copays, deductibles, and similar costs, excluding long-term care. And we would normally estimate those costs to grow by 5 to 6 percent per year. Genworth’s Cost of Care Study shares a number of national averages for long-term care:
- Adult daycare: About $1,560 per month
- Home health aide/assisted living: Approx. $4,000 to $4,200 per month
- Semi-private skilled nursing: $7,500 per month
- Private skilled nursing: $8,400 per month
- People in the New York metropolitan area – northern New Jersey and New York – can add 20 to 40 percent to those costs.
Q. Let’s focus on the housing options. There are CCRCs, assisted living facilities, and others. What are the differences?
Jim: There are a lot of options. When I talk with folks and when seniors are polled, the most popular place to stay is in their home. You may have a parent or an elderly loved one living in a home that isn’t suitable, so you have to make decisions.
One option that folks talk about often is the continuing care retirement community, or CCRC. If a senior is looking for an environment to go into where they can receive multiple levels of care within the same community, under the same roof, on the same campus, a continuing care retirement community is that type of solution. It provides for everything from independent living to assisted living to skilled nursing, and even memory care.
These are private-pay facilities, meaning Medicare or Medicaid don’t typically pick up much or any of the cost. Many of them are nonprofit, but they do require a large amount of money up front in the form of an entry fee. At times, this may be the equivalent of what you sell your house for. And then the monthly fees could be the majority of any pension or Social Security income. So they’re not inexpensive, but they could be a very good solution for people who are healthy enough to get into the independent living when it’s their time to make a transition.
Some communities offer a refundable contract, meaning that you put forth a certain amount of money and when you leave the community, if you decide, “This isn’t really for me,” you’ll get anywhere from 50 to 90 percent of that deposit back. Or if you live out your remaining years of retirement there, then that would be payable to your estate or named beneficiaries.
Q. What do people need to consider with regard to long-term care insurance?
Jim: It can be a valuable financial resource, but it’s important that you understand how the policy works so you’re familiar with the terms of your coverage. If your daily benefit, for instance, is $220 per day, it’s not going to cover the entirety of a skilled nursing stay. However, it probably would cover home health aides brought into the home, or at least a majority of that cost. Your loved one may never need to go to a skilled nursing facility at $12,000 a month. But at least if they do, you know that you have that piece coupled with some other savings and investments that would then help with some of those expenses.
Another thing that you want to make sure of is that the insurer has a secondary contact person on file. In the event Mom or Dad goes down the path of dementia and misses bill payments, the last bill you want to have unpaid is their long-term care insurance premium. That would put the policy at risk of lapse. You can contact the carrier, and the policyholder could fill out a form now, indicating, “In the event I don’t pay premium, please contact my trusted family member.”
Q. What are the first steps in preparing for future care?
Michael: The first step is to get some basic and more advanced documents in place. Most people think about a will, but the will is only a part of an estate plan. It appoints an executor to gather assets when someone passes away, pay off expenses, appoint a guardian for minor children, and perhaps even fund trusts for others. If you’re a New Jersey resident and you have property out of state, a revocable trust can be very important to avoid an ancillary, costly out-of-state probate.
If you become disabled, it’s important to have healthcare documents. A living will, often called an advance directive, is an expression of wishes for how someone wants to be treated at the end of life. And the second half of that is the healthcare proxy. The healthcare proxy, often called the power of attorney for healthcare decisions, appoints someone to speak on your behalf on healthcare matters if you can’t speak for yourself. They are sometimes combined into one document.
More advanced documents include irrevocable trusts that can be used for income tax purposes. But that’s getting beyond what’s basic. For a lot of families, an irrevocable trust could be an important part of the plan.
Jim Ciprich and Melissa Weisz will be speaking on the topic of CCRCs (Continuing Care Retirement Communities) at the Kemmerer Library in Harding on October 17 at 11:30 am. If you are interested in having Jim as a speaker at your event please email here.
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