9 November 2015

Aging with Grace: Who Will Take Care of Me?

Many people will grow old and become disabled so that they can no longer care for themselves. People in this situation frequently rely on a spouse or child for care. However, some people won’t have a spouse or children. For other people, the spouse may have passed away or be too infirm to provide assistance. Children may not live nearby or may be unable to help.

People should consider what they want to happen if their ability to care for themselves declines. This is particularly important for people in their 60s or 70s. Most people want to continue to live in their own home for as long as possible. There are several options to consider.

Using a Revocable Trust

A person might transfer their assets to a revocable trust and name themselves as trustee and a bank or trust company as successor trustee. If the person feels unable to manage the assets, he or she could resign as trustee and allow the bank or trust company to manage the assets.

Many people have understandable concerns about turning control of their assets over to someone else. There are many things that people can do to address this. The trust can provide detailed instructions on how funds are to be invested and when they are to be distributed for the elderly person’s needs. A person can retain the right to remove the trustee.

Most importantly for managing the trust, the trust can have a trust protector. The trust protector reviews the trustee’s performance and can replace the trustee if necessary. If the person establishing the trust is incapable of monitoring the trust, the trust protector can serve in this role. A trusted friend or family member is an ideal person to serve as trust protector. This person may be unable to do all of the work required of a trustee but still able to serve as a monitor.

People may have concerns that they do not have enough assets to interest an institutional trustee, such as a bank or trust company. However, there are institutions that will serve as trustee of modestly-sized trusts.

Another concern is the fees that the trustee will charge. Different trustees charge different fees, so a person can shop around to get the best fee compatible with the services they desire.

The fee paid to a trustee may be a wise expense. Unfortunately, elderly people are frequent targets for scams and thefts. A trustee is in a position to foil many of these schemes. The fee that a trustee charges over the life of the trust may be far less than the loss from one of these debacles.

There are other benefits to placing the management of funds in a trustee’s hands. When friends or relatives ask for money, the elderly person can say, “I no longer handle my finances; you’ll have to ask the trustee.” The trustee can say that they cannot give or loan money without endangering the elderly person’s lifestyle.

Another advantage of a trust arrangement is that it may make a guardianship for the elderly person unnecessary. The elderly person’s assets are already being managed by the trustee. This may avoid the costs of a guardianship, which, in most cases, will be much greater than trustee fees.

In-Home Care

An elderly person or couple living at home should consider hiring an agency to come to their home. The agency can send a person to the elderly person’s home to help with activities where the person needs or would like assistance. The level of assistance can increase as the person’s needs increase. Assistance can increase from house cleaning once per week to 24-hour per day nursing care.

There are several advantages to using an established and reputable agency to provide in-home services. A reputable agency will have done background checks on the people that they hire. Also, the agency will handle payroll reporting, worker’s compensation, and other employment issues. The agency’s employees should be bonded and insured. If the caregiver quits or doesn’t do a good job, the agency will be responsible for finding another person.

How would someone pay for all of these suggestions? Medicare typically does not pay for what it regards as custodial care, whether someone is in a nursing home or staying at home. Some financial projections can help the elderly person or couple get an idea of what they need. There are long-term care insurance policies available to defray some costs. These policies raise a whole set of other issues that need to be reviewed.

There are telephone support groups that an elderly person can join. These groups may be based on a common interest or problem, such as a chronic illness. This support may help a person avoid the isolation and depression that older people sometimes suffer.

Power of Attorney / Medical Power of Attorney / Directive to Physicians

An individual should execute a power of attorney. This allows someone else to act on the individual’s behalf if the individual can no longer act for himself or herself.

Also, an individual should execute a medical power of attorney. This allows someone to make medical decisions for the individual if the individual can no longer make these decisions.

An individual should consider executing a directive to physicians. This allows the individual to specify whether life-sustaining procedures should be applied if the individual faces a terminal or irreversible condition.

We at Lee & Desenberg will guide you through this planning process. Together, we can ensure that you will be taken care of in accordance with your wishes if, someday, you are no longer able to care for yourself.

Please give us a call at (713) 275-8440 and visit ldbusinesslaw.com/legacyplan to learn more.