It’s a basic combination of procrastination and lack of knowledge. Most people know that they should have some type of an estate plan in place, but they just haven’t gotten around to it yet. Or, perhaps they made a plan 10 or 20 years ago, and it’s now outdated due to family changes or tax law changes. Procrastination is the enemy of good planning. Don’t let yourself wait too long so that dementia, sudden illness, or death will prevent you from doing proper planning. In the last week alone I had to make three visits to clients in the hospital, two visits to clients in a nursing home, and two visits to clients at home on oxygen. Don’t put yourself or your family in that crisis mode. Plan ahead.
Good estate planning encompasses how decisions will be made if a person dies or becomes incapacitated, and elder law planning takes things a step further to look at how your assets can be protected in the event that you need to move to a long-term care facility. Everyone should consider both.
If you succeed in reaching the ripe old age of 65, the odds are slightly greater than 50% that you’ll spend some time in a long-term care facility. The average length of stay in a long-term care facility is about two and a half years, and the cost of care in our area is about $11,500 per month. That’s a little over $135,000 per year, and over $335,000 if your length of stay at the nursing facility matches the national average. Some people, however, will end up in the nursing home for 5 years, 10 years, or even longer. If you’re telling yourself, “I’ll never go to a nursing home,” your thoughts are similar to about 99% of the population. Nobody wants to end up in a nursing home, but the unfortunate statistics show that only 27% of people succeed in dying at home. Don’t take that gamble.
A great myth about Medi-Cal is that you can’t qualify unless you have no money at all, or that the state will take everything from your family when you die. Proper planning can change all of that. Learn what can be done.
If you don’t yet have an estate plan, you should consult a knowledgeable attorney. If you have a plan, but haven’t looked at it for 5, 10, or 20 years, I suggest that you pull it out, take a good look at it, and see whether it still accurately reflects your wishes. We also had a significant tax law change in 2012, and many of the older trusts should be changed to better fit your family under the new tax laws. If your plan was prepared without looking towards the potential need to have Medi-Cal pay for your long-term care, then your existing durable power of attorney may actually hamper the Medi-Cal planning efforts that someone might want to do on your behalf. Be proactive. As Gen. George S. Patton said, “Be prepared for the unknown by studying how others in the past have coped with the unforeseeable and the unpredictable.” Don’t let yourself delay to that point where the lack of a plan hurts you and your family.