If aging in place is your goal, then long-term planning needs to be considered. Some things to think about include how the house will function as you age, whether there will be accommodations for the people who will care for you, and how to pay for the care that you might need, says the Record Online in the article “Start planning now so you can ‘age in place.’”
Many homes will need to be remodeled for aging in place, and those changes could be big or small. Some changes that almost everyone has to consider include installing ramps and adding a bathroom and bedroom on the first floor. Smaller changes include installing properly anchored grab bars in the shower, improving lighting, and changing or updating the floor covering to avoid problems with walkers, wheelchairs or unsteady seniors.
Choosing a caregiver and paying for care is sometimes difficult to think about, oftentimes because they are intertwined issues. Many adult children become caregivers for aging parents, and for the most part, they are unpaid. Family caregivers suffer enormous losses, including lost work, career advancement, income, and savings. Stress and neglect of their own health and family is a common byproduct.
You’ll want to speak with an estate planning eldercare attorney about how or if the parent may compensate the child for their caregiving. If the parent is applying for Medicaid and the payment is deemed to be a gift, it will cause a penalty period, when Medicaid won’t pay for care. A caregiver agreement drafted by an elder law estate planning attorney will allow the parents to pay the children that provide them care without having it be considered a gift or triggering a penalty period. Keep in mind, though, that the child will need to report this income on their tax returns.
The best way to plan ahead for aging in place is to purchase a long-term care insurance policy. If you qualify for a policy and can afford to pay for it, it is a good way to protect assets and income from going towards caregiver costs. You can also relieve the family caregiver from duties or pay them for caregiving out of the insurance proceeds.
Without long-term care insurance, the next option is to apply for community and in-home care through Medicaid to pay for care in the home, if available in your state. To qualify, a single applicant can keep $15,450 in assets plus the house, up to an equity limit of $878,000 and only $878 per month of income. For a married couple, when one spouse applies for community Medicaid, the couple may keep $22,800 in assets plus the house and $1,287 per month of income. If the applicant or spouse is on a managed care plan, the couple may keep even more assets and income.
Another option is spousal refusal, which may allow the couple to keep more assets and income. When an applicant has too much income, a pooled income trust may be used to shelter income from going towards the cost of care. This is a complicated process that requires working with an estate planning attorney to ensure that it is set up correctly.
Self-paying for home care is another option, but it is expensive. The average cost of home health care in some areas is $25 per hour or $600 per day for around-the-clock care. When you get to these costs, they are the same as an expensive nursing home.
Planning in advance with careful analysis of the different choices will give the individual and the family the best picture of what may come with aging in place. A better decision can be made, once all the information is clearly assessed.
Reference: Record Online (Aug. 31, 2019) “Start planning now so you can ‘age in place’”