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As seniors age, they and their caregivers face increasing financial challenges. Understanding the legal tools available to them is vital for ensuring seniors' rights and securing their financial well-being.
Geoff Kunkler is an estate planning attorney with the Columbus-based firm Carlisle, Patchen and Murphy, LLP.
Matthew Rand: My first question is about nursing homes, which are notoriously expensive. Many people worry about losing their assets to pay for that care. How can they make sure that doesn't happen?
Geoff Kunkler: There's a few different ways people can approach it. One is either with enough savings or sort of what I call self-insurance. I'm going to take on this risk and just pay for it. That's not very likely to work for the average listener.
The second way to address it would be to look into some sort of more formal product or financial planning. They do, in fact, sell long-term care insurance, with the idea being if I do need to go to an assisted living or nursing home, there would be an insurance company on the hook to pay for some or all of that. And those can be great tools. They tend to be a little expensive and as a result underutilized, but it could be a tool.
The third option would be to work with me or someone like me in the space of estate planning and really elder law to try to arrange your estate to most easily qualify for some type of government benefits, the two biggest being either Medicaid or veterans’ benefits.
If you plan far enough in advance, you can try to pick and choose assets to protect from what they call the spend down where you're required to spend your own money before those programs would typically kick in.
Matthew Rand: Explain for us the concepts of power of attorney and advanced directives. How do these work to ensure seniors financial as well as medical wishes are respected?
Geoff Kunkler: They're both wonderful tools. I sort of lump them into the broad category of what I call disability planning. You're making decisions now, so that if you become disabled—physically, cognitively, perhaps both, then someone is empowered to make your decision.
So, on the advanced directive side, we're typically talking health care decisions. In some states, they have combined this into one document called advanced directives. In Ohio, we separate that into what's called a living will and a health care power of attorney. The health care power of attorney is the sort of building block and the most important. At its simplest, it’s a document that says in advance, if I'm unable to make my medical decisions, who would I like to make those for me?
Many people say, although I picked that son or daughter to make those decisions, I wouldn't want them to have to make the sort of end of life, pulling-of-the-plug decision. So in Ohio you could sign a living will telling the medical professionals if certain conditions are met, if I'm in a permanent coma and there's no hope, I want to pre-authorize the removal of a feeding tube and hydration in advance, which of course would lead to your passing.
So those are on the health care side. The other side of that coin is finances. Everyone should also have a financial power of attorney. So the health care person might check you into a facility, but the financial person is the one who actually deals with the bank, pays the monthly bill for that nursing home, so on and so forth. Those documents allow someone to make your decisions for you if you can't do so.
Matthew Rand: When it comes to estate planning, what are some of the biggest mistakes you see in your practice and what can seniors do to protect their assets while saving money at tax time?
Geoff Kunkler: I think not planning in advance is probably the biggest mistake. I have people who come to me more in a time of crisis. My mom or dad has had something occur—a new diagnosis, a fall, some sort of an incident—and I now need to make the best we can of the situation. And often, if there isn't time to plan in advance, you're kind of scrambling.
So either you're going to pay more in legal or court fees, or perhaps there are certain tools you can't use because it's not far enough in advance. The more you've done in advance, the more likely you have the right people empowered to make the decisions. And if you're trying to shelter assets, the more you've done in advance, the more likely you are to succeed.
Matthew Rand: Can you talk about the help available to seniors here in Ohio for managing things like health care costs, housing, and other expenses?
Geoff Kunkler: Those costs can be exorbitant. If one runs out of resources, typically you're going to be looking at one of the big government programs. The largest would be Medicaid, and there are a number of different programs through Medicaid one could apply for. Probably the biggest and the one we see most often is what's called Medicaid for the Aged, Blind and Disabled, which could pay for as much as the entirety of one's stay in a nursing home if you require skilled nursing care.
For folks who don't need that much care, there's some other programs that are generally classified under what we call waivers. There's a program called Passport, for instance, that might be able to help with some in-home care for a senior who's not quite needing that skilled care nursing facility yet.
And if either the person we're talking about, or even their spouse, happened to have served in the military, some active duty service, there are also some programs through the Department of Veterans Affairs that might be able to assist as well, both for housebound seniors, as well as seniors that might require more health care, whether that's in home, assisted living, or a nursing home.
