As estate planning attorneys, the specter of Alzheimer’s Disease looms in our minds. How can we plan for the steady progression of this disease? What if a client becomes incapacitated? Will we lose a person who is both a client and a friend? Most people have at least heard of Alzheimer’s, but how much do you really know about the disease?
In this post, we’ll have a broad discussion about the impacts of Alzheimer’s Disease and two estate planning issues that commonly surround it: financial abuse and nursing care.
Alzheimer’s Disease is a major issue on the American medical landscape. According to the Alzheimer’s Association, over 6 million people have Alzheimer’s at the present time. This number is projected to rise to a full 13 million over the next 30 years.
For the sake of comparison, consider this: the overall American population numbered approximately 332 million in 2021. If the growth in Alzheimer’s patients meets projections, then the number of people suffering from Alzheimer’s Disease in the United States will be higher than the current populations of Utah (3.3 million), New Mexico (2.1), Nevada (3.1), South Dakota (.89), Wyoming (.57), Montana (1.1), and Idaho (1.9)… combined!
Most of us are aware that Alzheimer’s Disease causes memory loss. Did you know that it can also be deadly? Alzheimer’s kills more people than both breast cancer and prostate cancer combined, and it is the sixth leading cause of death in the United States.
Here is another factor to consider: the leading cause of death is currently heart disease, which has received a great deal of focus from both the medical community and general public. Between 2000 and 2019, heart disease deaths went down by 7.3 percent. That’s pretty amazing! Unfortunately, during the same time period Alzheimer’s fatalities increased by 145 percent. There are a number of potential reasons for this increase, including the presence of toxic heavy metals in the environment.
This disease is obviously devastating for the victim, but family members feel the impact as well. More than 11 million people in the United States are providing unpaid care for Alzheimer’s sufferers, and they have provided over 15 billion hours of care. It’s also worth noting that Alzheimer’s Disease is implicated in a full 70% of dementia cases.
If all these caregivers were being paid, the price tag would be about $257 billion. Nationally, Alzheimer’s disease will cost the country an estimated $355 billion in 2021, and this number will only rise as the number of cases increase.
Elder Financial Abuse
Financial abuse of elders is disturbingly common in the United States. Most cases go unreported; victims are oftentimes trying to protect the perpetrators, who may be friends, caregivers, or even family members. Some seniors who suffer from cognitive impairments may not even realize that someone is taking advantage of them.
In cases of familial abuse, victims oftentimes shy away from implicating the perpetrator. There are a variety of reasons for this, including 1) potential loss of care, 2) criminal penalties for relatives, and 3) shame. As heartbreaking as it is, some victims fear verbal abuse or even physical violence.
Garden-variety scumbags also tend to see senior citizens as easy marks, which adds to the problem. There is an entire universe of common scams which target seniors, some of which are detailed at this link by the Office of the Attorney General.
There are legal options to protect elders from financial abuse, which is one reason you may wish to consult with an attorney.
Nursing Home Care
If you’ve visited a nursing home lately (and they offer memory care), then you’ve probably seen some Alzheimer’s patients. How much does that cost them? What about the quality of care they receive, is it good?
According to the State of Texas, the average monthly cost for nursing home care is over $6,400! The average length of stay is a full year. How much is $6,400 x 12? This is more than $76,000 for an average level of care. What if you want something better for your loved ones?
Contrary to what many people believe, Medicare does not pay for the custodial care that nursing facilities provide. You must look elsewhere for financial support. A potential solution is the Medicaid system. How does that work?
Medicaid will pay for long-term care, but you cannot qualify if you have more than $2,000 in countable assets in your name. That’s right, just $2,000.
To be clear, your home is not counted, but if you become eligible for coverage Medicaid is required to seek reimbursement from your estate after you pass away. They can even put a lien on your home if it is in your direct personal possession at the time of your passing.
What can we do to mitigate this? Well, you could create and fund a “Medicaid trust” to account for the home and other countable assets. This means that you could no longer access the principal, but you could receive distributions of the trust’s earnings until you apply for Medicaid.
A great deal of forethought is required in this situation. Consider the five-year “look back” period as an example. This rule means that you must fund your trust at least five years before you submit your application for Medicaid coverage! It’s better to plan sooner rather than later.
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