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The Careful Timing of Elder Legal Planning

Posted on: December 19th, 2015
elder care planningOne out of four 65-year-olds today will live into their 90s, according to the Social Security Administration’s current data. As healthcare advancements continue to increase longevity, the age at which individuals identify as ‘elderly’ also shifts into later stages of life. This new paradigm might cause many individuals to postpone review of elder law considerations. However, delaying elder legal planning exposes families to a number of risks—especially the risks that come with longer lives. 

If an individual or couple waits to address legal matters, loved ones might experience a number of challenges at the time an unexpected event or illness causes an aging relative’s incapacitation. Without a living will, powers of attorney, or advance directives, loved ones might have little knowledge or power over a debilitated relative’s care. Dementia, Alzheimer’s, and other cognitive impairments that surface with age are unpredictable. Within a few short years, a senior relative could progress to the point where they no longer have legal capacity to sign estate planning documents. Postponing legal planning could create a situation where family members must petition the court and wait for court-appointed authority to manage care and finances. This could compromise medical treatments, cause missed mortgage payments, and result in other sources of physical, monetary, and emotional distress.

Another challenge that comes with longer lifespans is the greater cost of care. The rate at which long-term care insurance and long-term care expenses has risen is substantially higher than other areas of healthcare, the costs for which are compounded by inflation. Additionally, healthcare expenses are significantly higher for aging individuals whose mental faculties fail. 

While many individuals might be inclined to delay addressing elder law matters, the best attitude is one that prompts immediate advance planning. Even if they delay preparing a will or trust, individuals should have powers of attorney and health care advance directives in place. A durable power of attorney and advance directive can immediately grant a trusted person authority over financial and medical decisions in the event the individual becomes incapacitated. 

Timing is also critical in regards to Medicaid planning. For instance, Medicaid has a five-year ‘look back’ period. Medicaid applicants who have not planned in advance might not be eligible if their assets were not structured properly during the five years prior to their application. 

Even for those with the best health, living longer means an individual will need to sustain living expenses for a longer time. Incapacitation can occur at any age. When it comes to time and elder legal planning, individuals should carefully plan all of the time. Don’t delay starting a plan, and don’t wait to update it.

By Attorney Gregory Herman-Giddens

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