Powers of Attorney are the most important estate planning documents we all should have while alive. Without one, there will be no one to act for you on your behalf if you cannot act for yourself. This may sound like something you’ll never need, or maybe only something you’d need if you were elderly or diagnosed with dementia, but the truth is you never know what can happen. If you were to become suddenly ill, injured, or incapacitated, you will need someone who can act on your behalf in all matters. To do that they will need a Power of Attorney document.
Not all legal documents are created equally, however, and you may need more than one Power of Attorney to make sure everything is addressed. There are two that we highly recommend, a Durable Power of Attorney for financial matters, and a Health Care Power of Attorney.
Washington amended its “Power of Attorney” statute effective in January 2017, which changed what would need to be included. Likewise, in 2004 and 2012. Which means that your “attorney in fact” (i.e. the person you name and empower to act for you should you need/wish them to) shall not be able to perform certain acts such as amend or revoke an employee benefit plan, trust agreement, deal with banking matters, certain real estate transfers and the like unless specifically provided for in the Power of Attorney document. This has led to the drafting of comprehensive documents designed to encompass every conceivable situation your “attorney in fact” may be asked to perform. Given differences in dealing with financial versus health care matters, separate documents have been recommended for each.
To learn more about these documents and how to set them up for you and or your loved ones, we recommend you attend one of our FREE workshops where you will learn more about these documents, and much more! Register today!
Since Washington is a community property state, will everything automatically transfer to a surviving spouse if there isn’t a will?
Washington is one of eight “community property” states where each spouse owns an undivided one half interest in property acquired during marriage, however, not all property of a passing spouse will automatically transfer to the survivor. It is possible to own “separate” property in Washington as well. Assets such as bank and financial accounts or life insurance will automatically pass if the beneficiary designations are named, but interest in a house (real estate) will not automatically transfer without a Community Property Agreement. Without a Community Property Agreement typically “probate” will be required to transfer your spouse’s half interest in the home to you.
To be ready for life’s “curveballs,” all of us need the five basic estate planning documents regardless of our wealth - a Will, Durable General Power of Attorney (POA) for financial matters, Health Care POA, Health Care Directive and a Community Property Agreement. The earlier we have these in place the more options we have.
To learn more, plan to attend one of our free Elder Law Workshops, register here, or call to schedule a free consultation.
Your early diagnosis and willingness to adopt a proactive approach will go far in helping to maintain a higher quality of life for as long a time as possible.
First, consult your doctor and care providers regarding treatments, medications and lifestyle stress reductions. Take a trusted partner with you to be a second voice and set of ears.
Second, I strongly urge you to call to make an appointment with an elder law attorney to comprehensively discuss your care options, how to pay for such care and how best to ensure your estate planning documents will work the way they are supposed to when you need them the most.
Finally, the Alzheimer’s Association of Western Washington has a toll-free number with experts available to provide direction and answer your most pressing questions and concerns.
Additionally, Pierce County Aging and Disability has resources to help.
I also recommend two local Life Care Planning Professionals, Lisa Doyle of CayCare 866-337-1176 and Mary Lynn Pannen of Sound Options 253-756-5007. They can always provide valuable information and assistance.
At Tacoma Elder Care we want to help and guide you in any way we can. Schedule a FREE consultation today, or register for one of our FREE elder care workshops.
What is Long-Term Care Insurance?
It might be hard to imagine, but at some day you may need some help taking care of yourself. The big question is: How will you pay for it?
Buying long-term care insurance is one way to prepare. Long-term care refers to a host of services that aren’t covered by regular health insurance. This includes assistance with routine daily activities, like bathing, dressing or getting in and out of bed.
A long-term care insurance policy helps cover the costs of that care when you have a chronic medical condition, a disability or a disorder such as Alzheimer’s disease. Most policies will reimburse you for care given in a variety of places, such as:
Considering long-term care costs is an important part of any long-range financial plan, especially in your 50s and beyond. Waiting until you need care to buy coverage is not an option, as you won’t qualify for long-term care insurance if you already have a debilitating condition. Most people with long-term care insurance buy it in their mid-50s to mid-60s.
About half of 65-year-olds today will eventually develop a disability and require some long-term care services, according to a study revised in 2016 by the Urban Institute and the U.S. Department of Health & Human Services. Most will need services for less than two years, but about 14% will require care for more than five years.
Regular health insurance doesn’t cover long-term care, and only covers short nursing home stays or limited amounts of home health care. It does not pay for custodial care, which includes supervision and help with day-to-day tasks.
If you don’t have insurance to cover long-term care, you’ll have to pay for it yourself.
People buy long-term care insurance for two reasons:
To protect savings. Long-term care costs can deplete a retirement nest egg quickly. The median cost of care in a semi-private nursing home room is $89,297 a year, according to Genworth’s 2018 Cost of Care Survey.
To give you more choices for care. The more money you can spend, the better the quality of care you can receive. If you rely on Medicaid, your choices will be limited to the nursing homes that accept payments from the government program.
How long-term care insurance works:
To buy a long-term care insurance policy, you fill out an application and answer health questions. The insurer may ask to see medical records and interview you by phone or face to face.
You will choose the amount of coverage you want, but policies usually cap the amount paid out per day and the amount paid during your lifetime.
Once you are approved for coverage and the policy is issued, you will begin paying premiums.
Some companies offer a “shared care” option for couples when both spouses buy policies. This lets you share the total amount of coverage, so you can draw from your spouse’s pool of benefits if you reach the limit on your policy.
Cost of long-term care insurance
The rates you pay will depend on a variety of things, including:
Your age and health: The older you are and the more health problems you have, the more you’ll pay when you buy a policy.
Gender: Women generally pay more than men because they live longer and have a greater chance of making long-term care insurance claims.
Marital status: Premiums are lower for married people than single people.
Insurance company: Prices for the same amount of coverage will vary among insurance companies. That’s why it’s important to compare quotes from different carriers.
Amount of coverage: You’ll pay more for richer coverage, such as higher limits on the daily and lifetime benefits, cost-of-living adjustments to protect against inflation, shorter elimination periods, and fewer restrictions on the types of care covered.
Tax advantages of buying long-term care insurance
Long-term care insurance can have some tax advantages if you itemize deductions, especially as you get older. The federal and some state tax codes will let you count part or all of your long-term care insurance premiums as medical expenses, which are tax deductible if they meet a certain threshold.
How to buy long-term care insurance
You can buy directly from an insurance company or through an agent.
You might also be able to buy a long-term care policy at work. Some employers offer the opportunity to purchase coverage from their brokers at group rates. Usually when you buy coverage this way, you’ll have to answer some health questions, but it could be easier to qualify than if you buy it on your own.
Get quotes from several companies for the same coverage to compare prices. That holds true even if you’re offered a deal at work; despite the group discount, you might find better rates elsewhere.
As you make a long-range financial plan, the potential cost of long-term care is one of the important things you’ll want to consider.
To learn more and to discuss what would work best for you, contact us at Tacoma Elder Care today!
The rules can be complicated, and but it’s smart to want to maximize your benefits if you’re married.
If you’ve been married to your spouse for at least one year, you can collect benefits on the earnings of your spouse, even if you don’t have a work history of your own. This is called a spousal benefit.
However, you can’t claim a spousal benefit unless your spouse has already filed for their retirement benefit.
If you’re eligible to collect retirement benefits on your own, as well as spousal benefits, Social Security will essentially pay you the higher of the two. For example, if one spouse’s retirement benefit is $1,000 per month, but his or her spousal benefit is $1,200 per month, the higher spousal benefit would be paid.
Under Social Security rules, each of us has what’s known as a “full retirement age,” or FRA. Your FRA depends on the year you were born. For most of us, the FRA is between age 66 and 67.
The other key term to know is “primary insurance amount,” or PIA. That’s the amount that Social Security calculates to be your monthly retirement benefit at your full retirement age.
Regardless of your FRA, you can begin collecting Social Security retirement benefits as early as age 62. The same is true of spousal benefits, but if you take either benefit earlier than your FRA, the benefit amount is permanently reduced by a percentage of the applicable primary insurance amount.
The reduction can be as high as 30 percent at age 62, and for the spousal benefit the reduction is even more, as much as 35 percent.
On the other hand, if you wait to begin collecting retirement benefits until after your FRA, the PIA will increase by 8% every year up to age 70. Benefits stop increasing at age 70, so there’s no advantage to waiting beyond then. Spousal benefits, however, do not increase past your full retirement age, even though they’re reduced if you collect them early.
If you are eligible for both a spousal and a retirement benefit, and you file for either one, you’re deemed to have filed for both benefits and automatically receive the higher of the two.
For example: If your PIA is $2,400 per month at age 67, but you start to collect it early at age 66, your monthly benefit would be reduced to about $2,267. Your spouse’s spousal benefit, however, would still be computed as 50 percent of your PIA of $2,400, or $1,200 per month. How much of that your spouse receives, however, depends on the age at which they apply for the spousal benefit.
Regardless of whether you wait or start collecting early, you still need to consider things such as cash flow, your health, and if you’ll be prepared if one of you becomes ill and needs long-term care.
We highly recommend setting up a FREE consultation with us at Tacoma Elder Care. We can walk you through all your options to make sure you are prepared for all situations regardless of when you choose to retire. Retirement should be fun and relaxing, which means having a plan in place.
Call today to schedule a FREE consultation, or register for one of our FREE Workshops.
Your attitude about aging and health can have a powerful and direct bearing on how you feel. There is plenty of evidence that today’s aging baby boomers are refusing to age in the “old-fashioned way.” Instead, boomers insist on growing older on their own terms.
In an article in Kaiser Health News, written by Bruce Horovitz, it’s noted that everyone around us may be growing older, but we don’t perceive ourselves as aging nearly as quickly. “Many of us are convinced that while everyone else is aging, that person we see in the mirror every morning is magically aging at a somehow slower pace,” Horovitz writes. “Call it what you will, but this gray-haired group of boomers and beyond – myself included – is having a hard time accepting the realities of aging. Yes, we are mortal, but we’re not quite believing it. The great irony, say experts on aging, is that this flirtation with a slightly different reality from our aging peers may, in fact, be a healthy thing.”
In a 2018 survey of 500,000 people conducted by Michigan State University, it was found that most people feel about 20 percent younger than they really are. This type of age-related self-perception seems to increase as we get older – and while it may seem like a form of denial, it’s actually very positive. Horovitz quotes the lead investigator from the Michigan State study, Professor William Chopik, who says, “People – particularly older people – usually say they feel younger than they are. People who report feeling younger actually tend to live longer and healthier lives – and they don’t tend to have as much of a pattern of decline.” In other words, a positive attitude about growing older makes it more likely that you’ll be happier and healthier as you grow older.
Feeling Positive About Your Health Means Greater Satisfaction with Life
As you might expect, younger seniors – those in the 65-74 age group – feel the most positive about their health, with 82 percent giving themselves an evaluation of good or better. But the next-oldest group, those 75 and older, continue to defy the stereotype: almost three-fourths call their health excellent, very good or good, while about 20 percent consider themselves in fair health and only 7 percent describe their health as poor. Interesting, considering that the majority of older adults – about 60 percent – have two or more chronic illnesses, such as diabetes, arthritis, hypertension, heart disease or kidney disease, and higher rates of physical impairment than other age groups. The answer lies in how older adults think about their health.
Feeling Positive About Your Health – and About Retirement
It’s good to feel positive about ourselves as we grow older, but unfortunately a positive mental attitude is not enough to protect you in retirement. What’s needed is a retirement plan that is comprehensive and multi-faceted. For example, you may have confidence that your financial needs will be met over the coming ten, twenty or thirty years – but do you have adequate legal protection in place beyond a basic will? Is your family aware of your hopes and desires as you age and will they be there for you? Have you considered your best options for medical coverage and your best housing plan, so that you will be prepared for whatever the future may hold?
Why not make it your goal this summer to find out more by attending a FREE Tacoma Elder Care Workshop with Bob Michaels? Let Bob explain the process, all your options and answer your questions in an information-packed 2-hour workshop designed to help you better prepare for any adventure that lies ahead.
Sign up for our next Workshop today! Or call for a one-on-one consultation with Bob.