Your parents need help – How to protect their assets and get the best care possible
Illness has no age bias. A 65 year-old may experience a health crisis requiring serious intervention. An 85 year-old’s biggest concern could be finding time to tune up the riding mower. Reconciling that incongruity is the adult child’s dilemma. A simple protective measure is to have a Health Care Proxy and Power of Attorney. A Health crisis starts off as medical crisis – the challenges involved in treating and stabilizing the patient, then laying the groundwork for recovery. For a compromised parent, an adult child Health Care Proxy can make medical decisions as necessary. The next stage of a health crisis is the financial crisis and the importance of a Power of Attorney cannot be overstated.
Recovery and rehabilitation begins long term care. A parent discharged from a hospital into a rehabilitation facility may have Medicare covering the cost of care for 20 days. Following the 20 days, Medicare only covers up to 80% of the cost of care in that rehabilitation facility. A supplemental insurance such as Empire Blue Cross/Blue Shield or AARP may pick up the remaining 20 % up to 100 days. Daily rates are more than $400 per day in many instances.
If a parent stops making progress during the rehabilitation period then Medicare may cut off before the end of the 100 days and the family would have to decide what type of long term care would be appropriate. Options include: home care with home health aides or family members, assisted living or nursing home care. Long term care is expensive requiring either an insurance solution, a private pay solution or Government entitlement solution (Medicaid and Veterans benefits). An adult child with a Power of Attorney can communicate with institutions regarding financial transactions and pay bills related to long term care. The Power of Attorney may allow the adult child to transfer a parent’s assets to become eligible for Medicaid or set up a Trust to protect assets and avoid probate.
Having parents who are married is a plus in New York. Spousal protections including exempt transfers between spouses and Spousal Refusal allow married couples to execute emergency Medicaid planning without triggering penalties. The New York Medicaid spousal protections utilized in tandem with a Medicaid Income Only Irrevocable Trust serve to protect the assets of the spouse needing immediate care and beginning the timeline for asset protection for the healthier spouse in case they need care at a later time.
Adult children will also have other considerations when a parent becomes ill. It is vitally important that the children maintain regular communication with hospitals and care facilities. Choosing a parent’s long term care facility that is closer in distance to a child’s home or work is advantageous. Consistent visitation improves a parent’s well-being and expands the level of engagement between the facility’s staff and the family.
For more information on how to protect your parents and get the best care contact the professionals at Sloan and Feller.