It takes a while to reach the age of 65. It also takes a while to be ready for the retirement age. The age of 64 is a good time to start if you haven’t already.
Many people will make use of Medicaid to ease them through their retirement years. Especially when health starts to decline. Here are some issues to consider before that time.
The first thing, when you sign on to Medicaid, is an evaluation of your assets. It will vary from state to state but it is common for you to sell off what are considered excess assets. For example, Medicaid may feel that you only need one home or one car. Anything extra will be sold off at a fair market value and used for your continued care. From this point on, you will need to keep track of the money you spend so you can show it is going to your extended care. Buying a wheelchair? Keep the receipt. Having a ramp put in? Keep a receipt. Anything of a major purchase will need a receipt so you can show Medicaid that you are spending your money on life related items that you need.
This does not include daily life items such as groceries, an occasional magazine or even a monthly trip to the movie theater. Once you have applied for Medicaid, you will have to show an accounting of your spending on big ticket items.
Once your savings has been depleted, Medicaid will then kick in and take over your cost of living. Again, it will depend on which state you live in but Medicaid will take your social security check less around $60 for your monthly personal expense account. This would also include any pension checks or annuities you might have along with other sources of income.
When Medicaid kicks in, You are also accruing a debt against any assets you might still have like your primary home or car. At the time of your death, your remaining assets will be sold and paid against any debt you have accrued through Medicaid. Anything left is passed onto your heirs. Because Medicaid will audit you, it is good advice to retain a probate lawyer and have a will made. The lawyer will be familiar with your state’s laws and will be able to advise you on a best course of action.
If you plan on shifting assets before applying for Medicaid, realize that Medicaid has a “look back” period of five years. They will audit all transfers made within the last five years of applying for Medicaid. If they find a transaction that they feel was avoiding financial responsibility, they will penalize you and the length of delay of care can be even longer than originally expected. Your local senior centers should have someone to talk to on what is legal and not legal.
POA and Medical POA
Power of Attorney (or POA) is there for someone you trust and appoint to carry out your wishes while you are still alive. It is granted through a notary public and usually a lawyer. The normal POA has the legal right to sign your name to any legal documents while you are absent or physically unable. The advantages for the senior is allowing them to make their wishes known through a trusted person granted the POA to act on their behalf. It is basically for financial decisions.
Medical Power of Attorney (or MPOA) is the same only for medical decisions. If, for any reason, you are incapable of making your own decisions known to a doctor (i.e., coma), the person you designate as your MPOA will stand in for you.
In both cases, it is important that you and your POA communicate thoroughly for it is your wishes they are carrying out in your absence both physically or mentally. It is also very important that this is a person you fully trust. Any action they take on your behalf is legally binding.
One last important thing to consider is that the person you designate is willing to take on the responsibility. I have seen where an adult child has been designated much to the adult child’s surprise. The adult child had no wish or desire to take on that responsibility. The adult child declined and by then it was too late to name another.
If you are a veteran, the VA may have programs that will assist you as your health declines. A few of the benefits listed on the VA website are: disability compensation, pension, education and training, health care, home loans, insurance, vocational rehabilitation and employment, and burial. And this list is far from being complete. These benefits may help you be self-sufficient for a longer period of time.
Laws Will Change
Laws are changing every year if not more frequently. That is why it is important to have someone in your corner that keeps up to date on the current laws. One current attempt by Medicaid is to have your family sign papers that they will be financially responsible to pay any debt that Medicaid declines to pay. It will reduce Medicaid’s support even more. There is no guarantee that this will pass into current law.
These topics are difficult conversations for anyone. Adult children can have an especially hard time trying discuss burial benefits with a loving parent they are not ready to lose. It is important to make sure these discussions do happen. Not only for your protection but the adult children as well.
Now, funeral homes are demanding their money up front. Any hope of using assets of the deceased disappears as they will need to come up with financing within a day or two. Probate can take up to a year.
You can purchase burial plans ahead of time so there will be a place for you to go. But, these may not cover funeral costs. Picking out a coffin, printing bereavement cards and a host of other expenses can quickly overwhelm the adult child who is trying to come up with a funeral of which everyone can be a part. Funeral homes will quickly suggest for your children to max out their credit cards and pay the debt back out of the probate. It will be much easier in the long run to have this planned out in advance. You can have a joint account set up with you and your executor to be used for this situation.
None of these issues can be considered pleasant. But, to ignore it will only let it build up to an even more complicated problem. You don’t have to deal with it alone. Your family can be a great source of support. There are many programs to help you from the VA to Social Security and your local senior centers. If you need to, you can even select a trusted friend or family member to become your POA. Your golden years are supposed to be a reward. By taking control, you can insure that will happen.
*This article was in part from an interview with Evelyn Voss, a care giver with fifteen years experience and over 15 certifications in her field.