Issue 11.12
Recently my 80-year-old father had total knee replacement surgery. Although this is a relatively common procedure today, his recovery has been slow and difficult to say the least. Even he would admit this is something he should have done years ago, before reaching a point of absolute necessity. Most who have experienced this surgery or know someone who has, would say this is usually only a temporary physical setback. I believe my father would like to think so, but being only two weeks in to rehabilitation the jury is still out, figuratively speaking. As a family we are all confident he will make a full and complete recovery. However, having seen and experienced firsthand the emotional and physical implications associated with what may be considered a minor procedure, it begs the question; how would a critical or long-term illness affect you and your family?
For over two decades now many of you have heard me stress the importance of planning your estate in the event you were to become a nursing home statistic. I use the term statistic because according to statistics from the ‘National Council on Aging’, between the ages of 65 and 85 there is a better than 70% chance that you or your spouse will spend time in a long-term care facility. Accordingly, the average stay is just under two years with an average cost nationally at around $7,000 a month or $84,000 annually. Aside from the emotional toll, the financial implications can be devastating. With numbers like these, for most Americans, this would place long-term care as their greatest financial risk and I would agree. This risk surpasses taxes, inflation and even the volatility of the most risky investment. The greater tragedy is most of this risk can be reduced or eliminated with a little knowledge and planning.
Many have heard the expression, ‘what you don’t know can’t hurt you.’ I think we would all agree this is just not true. In examining risk associated with long term care we must know and understand the difference between Skilled Nursing and Convalescent Care. I’ll give you a hint; one is covered by Medicare for a period of time and the other is not. You should comprehend what the term ‘look-back’ is. Knowledge of how a transfer of assets may impinge on your ability to qualify for certain government related benefits for Nursing Home assistance is critical. You will need to be aware of ‘recovery’ rules and how this can result in the loss of your home and other ‘exempt’ property. ‘Spend-down’ is another ugly word we need to be familiar with and avoid. The formula for preparing is different for everyone. Planning is determined by your personal situation and desires or goals. There is no one magic bullet, but you must have a plan in advance.
David D. Polatis, CEP can be contacted at Senior Advantage, 435-986-9222.