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Connelly Law Offices
Charting a Course for the Journey of Dementia
The cost of caring for an individual with dementia is significant and costs increase rapidly as the disease progresses. In the beginning, however, the costs are minimal, allowing a family time to develop a financial plan to help pay for the cost of dementia care when the time comes and to plan to protect the income and assets of a spouse or other family members providing care.
Unfortunately, financial planning is complicated, care requirements and costs are difficult to predict and the rules for financial and medical assistance are ever-changing. Because of this, seeking professional assistance for financial planning is recommended.
Lack of planning can lead to serious financial problems for families.
As we overcome adversity in our lives, we will become stronger. Then we will be better able to help others, those who are working, in their turn, to find a safe harbor from the storms that rage about them.
-- Joseph B. Wirthlin
FINANCIAL PLANNING IS A NECESSITY
There are several reasons why creating a long-term financial plan for a loved one with dementia is of critical importance.
Medicare and long term care insurance, the two options that most people consider for long term care are not options at all. Medicare does not pay for ongoing care and long term care insurance is only an option if one has purchased the insurance prior to receiving a dementia diagnosis. Having a financial plan in place will increase the likelihood that as your loved one’s condition progresses, they can continue to reside in a living environment that is most comfortable for them.
Furthermore, having a plan will help to alleviate the stress the family has about their loved one’s condition as many of the concerns can be addressed and planned for in a financial plan.
Of equal importance, having a financial plan protects a spouse from becoming impoverished while providing care. It protects them from losing their home to pay for care. Having a plan ensures the spouse can continue to live independently and at a financial level on par with how they lived prior to learning of their loved one’s disease.
It is important to understand what Medicaid is (as opposed to Medicare) and the role that Medicaid plays in most financial plans for dementia care. The cost of caring for someone with Alzheimer’s Disease in the U.S. over their lifetime is estimated to be between $350,000 – $750,000. Such costs are usually not anticipated or planned for and result in quite a financial burden for all concerned.
A comprehensive estate plan can help prepare for these costs and help protect assets.
Medicaid, in most cases, will play a role in paying for a loved one’s dementia care. Here are the facts - 8 out of 10 people diagnosed with dementia will require nursing home care at the end stages of the disease, often costing tens of thousands of dollars a month. Of these cases, over half will need help from Medicaid.
Becoming eligible for Medicaid is a complicated process and when a spouse is involved, even more difficult. Medicaid has a 5-year look back period (meaning all financial transactions during that time are examined when applying for assistance) so early planning is essential. Medicaid does this to ensure a family has not simply given away money to family members to become Medicaid eligible.
The rules are complex and the high usage of Medicaid as a payment source for dementia care is resulting in more and more scrutiny of applicants. We are Medicaid experts and can provide appropriate guidance through this process.
MEDICAL ASSISTANCE PLANNING AT CONNELLY LAW
Medical Assistance Planning at Connelly Law means that we focus on helping individuals or families become Medicaid-eligible. As stated earlier, since Medicaid plays such a large role in paying for dementia care, financial planning to become Medicaid qualified (and prevent a spouse from becoming indigent while living in the community) is a large part of financial planning for dementia care.
As we have offices in Rhode Island, Connecticut, and Massachusetts, each state's Medicaid’s eligibility rules are different and complicated at best.
As an example, the rules vary by marital status, with the health of the applicant, by the location in which one receives care, with homeownership and based on old financial transactions conducted by the applicant and/or their spouse.
And, should one violate Medicaid’s rules, it is possible they could be penalized by Medicaid and receive no assistance at all for a period of months or even years. It is for these reasons that individuals seek help in navigating the Medicaid eligibility process. Although there is a cost, the amount of money saved in the long run is significant.
To be clear, very few Medicaid candidates automatically meet all of Medicaid’s strict requirements. In these cases, we employ financial tools such as a trust, to help a loved one gain eligibility. There are also other financial tools we use to help a spouse maintain enough income and assets so that they can live independently. There are also other strategies that can be used to help protect a home, should the individual with dementia pass away.
Connelly Law can provide a comprehensive solution to financial planning for dementia care through the development of legal documents, establishing trusts, creating Powers of Attorneys, Advanced Directives, Wills, etc. We can also develop plans for couples with significant financial assets and complex family situations such as those who have a special-needs child or couples where both spouses have been diagnosed with progressive dementia.
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