What Do Nursing Homes Actually Cost?

What Do Nursing Homes and Assisted Living Facilities Actually Cost?

Most of the planning we do in the elder law area is to help seniors afford the care they need so they don’t run out of money or options before they run out of breath. One of the common questions is: What does long-term care really cost?

I found this link from New York Life that gives the average cost for nursing homes, assisted living facilities, and home health care providers — such as registered nurses (RNs), licensed nurse practitioners, and home health aides. You can look up your specific metropolitan area, but I’ve listed the numbers for my area in central New Jersey here below:

Cost of Long Term Care In Central New Jersey

Cost of Care Type of Care
$12,931 Skilled Nursing Facility – Private Room Monthly Rate
$11,746 Skilled Nursing Facility – Semi-Private Room Monthly Rate
$6,393 Assisted Living Facility – One Bedroom Monthly Rate
$4,995 Assisted Living Facility – Studio Monthly Rate
$77.03 Registered Nurse – Hourly Rate
$22.45 Home Health Aide – Hourly Rate

Another article, found here takes the information from the New York Life study and ranks the various metropolitan areas. The rankings came out like this:

Top Most Expensive Areas For Nursing Home Private Rooms (Annual Cost)

Rank Cost of Care Metropolitan Area
1 $159,359 Fairfield County, Connecticut
2 $156,950 Anchorage, Alaska
3 $155,180 Metropolitan NYC, Long Island, Northern/Central Jersey

There are 25 metropolitan areas listed, but I was floored to learn that Medina Law Group is located in the third most expensive area for nursing home care. That’s simply incredible.

Posted by Victor Medina, Medina Law Group, LLC

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The Risks Of Giving Your Home To Your Children

Some parents consider transferring ownership of their homes to their children. Why? Many believe that it is a classic win-win situation. They can continue to live in the house, while at the same time reduce the value of their estate for tax purposes and provide a valuable asset to their kids down the road.

If you are considering such a transfer, an article in the Wall Street Journal explains why you should think long and hard before doing so. Here are a few factors to consider.

Loss of security
What if one of your children gets divorced and the ex-spouse decides to make a claim on the home? Or let’s say one of your kids loses a lawsuit, or defaults on a loan? In that case, creditors could make a claim on the home—you and your spouse might very well be evicted. Not exactly the way you had hoped to spend your golden years.

Medicaid ineligibility
If you apply for Medicaid assistance to pay for long-term care within five years of transferring ownership of your home, your application will probably be denied. Why? Medicaid has what is called a five-year look-back period for gifting. You could be ineligible for Medicaid assistance for years, depending on the length of time between your transfer of ownership and your application for benefits. Given the cost of long-term care, this could be financially devastating for you and your spouse.

Loss of reverse mortgage option
While reverse mortgages are not for everyone, in certain situations, they can be effective wealth preservation tools. Transferring ownership of your home to your children eliminates this option.

Are there any situations when transferring ownership of your home to your children makes sense? Some, particularly for families with sizable estates and the transfer would reduce estate value to an amount where estate taxes are minimized or eliminated. However, if you plan to live in the home after transferring ownership, it is advisable to take additional legal steps to protect your interests. These include life estates, qualified personal residence trusts, defective grantor trusts, and more. Contact our New Jersey estate planning lawyers to learn more about these options.

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The Bravery of Living With Parkinson’s Disease

The Bravery of Those Living With Parkinson’s Disease

I am spectacularly unqualified to discuss Parkinson’s disease. I don’t have it myself, and there are no close family members of mine living with it. Even so, I’ve been witness to it more than most from my position as estate planning attorney.

The disease intersects my life one of two ways — either I meet a client who has it currently, or I meet the surviving spouse of an individual who died with the disease. In both cases, I am struck by the remarkable bravery and strength of these people.

It’s not that other folks aren’t brave when dealing with disease, but there has been something unique about Parkinson’s condition that has hit a chord with me. I think it must be a combination of seeing how long these people have battled, and how their bravery has continued in the face of decades of frustration (for most) at the sudden physical helplessness that accompanies the disease.

That’s probably the reason why this article from the NY Times touched me as deeply as it did.

I think you should read it.

Posted by Victor Medina, Medina Law Group, LLC

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Do You Need A Lawyer To Create A Will?

Sure, you can create a will without a lawyer. There are even a number of downloadable documents online, and software programs available from your nearest electronics store, to help you do it. However, a recent article in the ABA Journal showcases why the do it yourself approach is not such a good idea.

The article discusses the case of Ann Aldrich, a Florida woman who used a downloadable form to make a will in 2004. Her will left her assets to her sister. The will also said that if Ann’s sister died before she did, Ann’s brother should receive her assets. Ann’s sister did indeed predecease her, so one would think that her assets would go to her brother. Pretty simple, right? What could possibly go wrong?

As it turned out, plenty.

It seems that the downloadable form did not include something called a residuary clause. This clause provides for assets not listed specifically in the will. As a result, the Florida Supreme Court decided that the assets Ann acquired after she made the will, in 2004, would have to be distributed according to the laws intestacy. That is, these assets would be distributed as if Ann had never made a will at all!

The end result of this mess was that two of Ann’s nieces cited the will’s lack of a residuary clause in asserting an interest in Ann’s estate. They prevailed. According to Barbara Pariente, one of the concurring justices in the court’s decision, the case highlights the danger of using pre-printed forms rather than seeking legal counsel. She described this approach to estate planning as “penny wise and pound-foolish.”

So, do you need a lawyer to make a will? No. A better question, however, might be “should you consult a lawyer to create your will?”

You be the judge.

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Elder Law Is…About Having Options

Elder Law is….About Having Options

When people meet with me to discuss our elder law planning, they learn that my emphasis is on giving seniors options as they get older and their care needs increase – not necessarily qualifying for one benefit or another.

Here is a fantastic article from the New York Times talking about the author’s mother’s last days, which were able to be spent at home with a dedicated caregiver.

Our planning is about maximizing our client’s ability to dictate the course of their own care. We want to make sure that staying at home is as viable an option as affording a stay at a nursing home of their choice.

Posted by Victor Medina, Medina Law Group, LLC

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When Was The Last Time You Reviewed Your Beneficiary Designations?

Maybe it’s the IRA you have meticulously made contributions to for the last twenty years. Or the retirement plan you established with your employer the very day you began work at the company. Or that insurance policy you bought many years ago.

You created them not only to protect your financial future, but also the financial well being of the people you love—that is, the beneficiaries you named in your planning documents. But what if your personal situation has changed over time? Maybe you have gotten divorced, or your wife has passed away, and you have remarried? Perhaps your son or daughter has gotten married, and you’re not exactly overjoyed with his or her choice of spouse?

Change is a fact of life. The question is, do the beneficiary designations in your planning documents reflect the changes in your life and the lives of your loved ones? If they don’t, the consequences can be devastating to the very people who are most important to you at this stage of your life.

We understand that it is easy to put off reviewing your designations. It’s not the kind of thing you wake up one Saturday morning and say to yourself “By golly, I think this is the perfect day to tackle those beneficiary designations.” But as your estate planning counselors, we consider it our duty to make sure that your designations, and your estate plan as a whole, are up-to-date and capable of achieving your goals.

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With Premiums Rising Dramatically, Should You Keep Your Long-Term Care Insurance?

Long-term care insurance is not for everyone. When clients ask us whether it is right for them, we consider their overall plan and unique situation. Sometimes we recommend long-term care insurance, sometimes we don’t, depending on the client’s needs and goals.

But what if you’ve already bought long-term care insurance, and you’ve seen your premiums rise dramatically in recent years? First of all, you’re not alone. A recent article in the New York Times noted that some premiums have gone up as much as 40 to 60 percent in recent years. The reason is that many insurance companies have suffered major losses on policies written more than ten years ago, and they are looking to recoup those losses. (A number of companies no longer offer long-term care insurance at all.)

If your premiums have increased, should you keep the policy? Make changes to it? Look for a cheaper one? Here are some factors to consider:

  • If your policy is more than two years old, you probably will not be able to find a cheaper one to replace it if you choose to cancel the existing policy. It may also be harder to qualify for a new policy
  • If your premiums have risen more than 20%, you may want to reduce your daily benefit to try and keep the premium down
  • You might be able to reduce your premium by lowering the rate of inflation protection. However, make sure it is not applied retroactively

Given that every family is unique, with particular needs and goals, it is advisable to discuss matters such as long-term care insurance with an experienced elder law attorney. We can review your policy and your existing plan to determine whether it is in your best interests to keep your existing policy. We can also recommend other tools and strategies that can help ensure you get the long-term care you need without losing your life savings. Contact us today for a consultation.

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Reverse Mortgages Doing Damage From Beyond the Grave

Reverse Mortgages Doing Damage From Beyond the Grave

Here is an article from the New York Times on reverse mortgages. The article focuses on the damage done to children after elderly parents take out reverse mortgages so they (the parents) can stay in the home as medical care costs begin to increase. Many times, the children lose the home as the mortgage companies look to foreclose on the property soon after the owner-parents die.

While the article has some quotes from lawyers, they are lawyers for consumer affairs and the mortgage industry. What I found lacking was any discussion about the failure to consult lawyers about long-term care planning before taking out the reverse mortgage. The article does a poor job of reporting that taking out a reverse mortgage was far from the only option the parents had to “age in place” and pay for home health care or aides.

By the time the situation gets as far as the parents dying and the kids trying to save the home, it’s too late. The damage is done and it’s largely about salvaging the scraps. If the parents had consulted an elder law attorney before they spoke to a reverse mortgage salesperson, the home would have been saved and the kids wouldn’t be forced to come up with 95% of the market value to pay off the reverse mortgage company to stave off foreclosure.

There are lots of reasons why people don’t consult an elder law attorney before taking action. Sometimes it’s because they don’t want to pay money, sometimes it’s out of ignorance that an elder law attorney can help, many times a combination of the two. We see now the consequences of that failure to consult a lawyer.

Don’t let it happen to you. The small investment you make in planning and counseling today can save hundreds of thousands of dollars for you and your children. That’s not overstating it – we do it everyday for clients.

Posted by Victor Medina, Medina Law Group, LLC

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The Importance Of Funding Your Revocable Living Trust

Revocable living trusts are one of the most powerful tools in the estate planner’s toolbox and offer a number of advantages over wills. These include avoiding probate, reducing delays in the distribution of assets, greater control over your assets while you are alive and in the event of incapacity, greater privacy, and more. Unfortunately, many people who create a revocable living trust fail to fund it adequately.

What do we mean by “funding” a revocable living trust? Essentially, it involves retitling your assets into the name of the trust, as well as making sure that the beneficiaries of any life insurance policies or retirement accounts coincide with the provisions of the trust. If you fail to fund your revocable living trust, your estate plan won’t work as you intended and the trust will be only as valuable as the paper it is printed on. The consequences of not properly funding your trust include:

  • Assets held outside the trust cannot be managed by the trustee. So, for example, if you become incapacitated, your loved ones will need to establish a court-supervised guardianship or conservatorship to manage those assets not in the name of your trust
  • Assets held outside the trust are subject to probate, defeating one of the main benefits of creating the trust in the first place
  • Assets held outside the trust may not go to your intended beneficiaries

The bottom line is this—make sure your revocable living trust is properly funded. And, be sure to keep it up to date, so that any changes in your personal and financial situation, together with those of your loved ones, can be taken into account. In this way you can be sure your revocable living trust is helping you to accomplish all of your goals and maintain complete control over your affairs. Contact us today to review your trust, determine that it is indeed properly funded, and make any necessary updates to ensure it addresses your current needs and goals.

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If You Don’t Plan Ahead, New Jersey Has An Estate Plan For You, And You’re Not Going To Like It

In New Jersey, if a person passes away without a will or trust, his or her estate assets are distributed according to what is known as intestate succession. It’s an estate plan of sorts, and for most people, not a very good one.

Certain assets are not subject to New Jersey’s intestate succession laws. These include funds in an IRA, 401(k) or other retirement account, proceeds from life insurance policies, property owned in joint tenancy or tenancy by the entirety, payable-on-death bank accounts, and securities in a transfer-on-death account.

Most other assets are transferred according to intestate succession. So, “who gets what” according to the state of New Jersey? It can get quite complicated, but let’s look at just a few examples.

Let’s say that when you die, your spouse is still alive, you and your spouse have living children and other descendants, and your spouse has no other descendants. In this case, your spouse inherits everything.

Or let’s say your spouse survives you, as do the children you had together and children that you had from a previous marriage. In this situation, your spouse inherits the first 25 percent of your assets (but not less than $50,000 or more than $200,000), together with one half of the balance. Your descendants get everything else.

Obviously, it can get complicated. But the question you need to ask yourself is:

Is this is how you’d like your assets to be distributed?

The answer is probably no, because the state’s plan is like using an axe when a scalpel is called for. It’s based on a formula, with no regard to your actual relationships with your spouse, children, and extended family.

“Who gets what” is just one reason to have a plan of your own, designed and implemented by an experienced New Jersey estate planning attorney. The plan we can create for you not only lets you decide who gets what, but it can also allow you to make sure your wishes are carried out with regard to medical care and financial decisions in the event of incapacity, name guardians for your children, obtain assistance to pay for nursing home care, and much more.

Don’t settle for New Jersey’s “estate plan.”

To learn more about New Jersey’s plans for your estate if you don’t have “a plan”, visit: http://www.nolo.com/legal-encyclopedia/intestate-succession-new-jersey.html

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