About 6 million people are currently living with Alzheimer’s disease according to the Alzheimer’s Association, and this is an eye-catching figure. The disease strikes just under 13 percent of all seniors, and 32 percent of elders that are 85 and older have contracted Alzheimer’s.
Your life expectancy is 87 years if you are a 67-year-old woman, it is 85 years for a man this age.
Cognitive impairment is the first thing that will probably come to mind when you think about the effects of Alzheimer’s disease, but there is another facet that is overlooked. It is actually the sixth leading cause of death, and it kills more people than prostate cancer and breast cancer combined.
When you are planning your estate, you should take the potential impact of Alzheimer’s seriously. If you do nothing to empower your own decision-makers in advance, the state could be petitioned to appoint a guardian to act on your behalf, you would become a ward.
This is not a very pleasant prospect, and you can prevent a guardianship if you take the right steps in advance. You can name your own hand-picked potential decision-maker through the execution of a durable power of attorney for property.
If you have a living trust, you would be the trustee while you are alive and fully capable of making sound decisions. When you draw up the trust declaration, you can name a disability trustee to assume the role if it becomes necessary.
You should also address medical matters. A durable power of attorney for health care is used to name someone to make medical decisions on your behalf if you become unable to do so. To give your agent the ability to access your medical information, you should sign a HIPAA release.
Another advance directive for health care that should be part of the plan as a living will, which is a document that is used to record your life support preferences. If you want to include organ and tissue donation and comfort care medication choices, you can do so.
Nursing Home Costs
Clearly, many people with Alzheimer’s disease require nursing home care. A year in a private room in a quality nursing home in the Burlington, Vermont area will cost somewhere in the vicinity of $130,000.
Medicare will not assist with these costs, so that is not the solution. The Medicaid program will pay for long-term custodial care, but you have to plan ahead to gain eligibility because there is a $2000 asset limit.
Advance planning is important because there is a five-year look back period. If you divest yourself of assets today, you will be ineligible for Medicaid for a period of 60 months.
This makes it impossible to give all the assets that you need to generate income to your loved ones five years before you may need long-term care. That’s the bad news, but the good news is that there is a solution in the form of an irrevocable, income only Medicaid trust.
You fund the trust with income-producing assets, and you continue to receive distributions until you apply for Medicaid. The principal would not be accessible to you, but you would not be spending the principal anyway.
It is possible to qualify for Medicaid as a homeowner, but you want to avoid this situation, because they could place a lien on your home during the Medicaid recovery phase after your death. To protect it, you could place your home into the trust as well.
If you apply for Medicaid at least five years after you funded the trust, the assets that have been conveyed into it would not count.
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If you work with an attorney from our firm, we can help you develop a plan for aging that will culminate in the effective passing of your legacy. There are different ways to facilitate transfers, we can recommend the steps that are best for you and your family.
You can schedule a consultation at our Essex Junction, VT estate planning office if you call us at 802-879-7133, and you can use our contact form if you would rather send us a message.