Caring for aging parents
Discussions with aging parents about financial affairs, nursing or retirement facilities, and similar subjects are often difficult for both the children and the adult. But putting off decisions until there's an emergency can result in inadequate and unnecessarily expensive solutions.
Among the questions to be addressed: is there adequate long-term health-care insurance, is there a will or trust and where are these important documents, and are the parents capable of handling day-to-day finances?
In the past, when Mom and Dad got too old to live alone, they went to a nursing home. Today, there are alternatives, depending on the type of care needed and the ability to pay for it. Care options for the elderly include:
Skilled nursing care offers 24-hour service in a hospital-like setting, with an average cost of about $100 a day.
Assisted-living facilities, with "home-like" residences, offer daily meals, help with bathing and dressing, 24-hour supervision, and limited nursing services. Costs average $70 a day for a private room.
Continuing-care retirement communities have a campus-like environment, where residents begin in an apartment and then move to an assisted-living unit or a nursing facility if their needs change. Costs average $50,000 to enter, with a monthly fee of $1,000 or more.
Adult day care offers group programs for those who need some daytime supervision. These facilities generally operate 9 a.m. to 5 p.m., Monday through Friday, and often provide transportation to and from the facility. Costs average $50 a day.
Home care health aides help the elderly at home with bathing and meals, while nurses perform more skilled services, such as inserting catheters. Average cost is $75 per visit.
Once you've sifted through the options, how do you pay?
About half of the $78 billion spent on nursing home care in 1998 (the most recent year for which cost figures were available) was paid by Medicaid, the funds for which come from state budgets.
Medicare, which pays for health care for people 65 and over and those who are disabled, covers hospitalization and doctors' services. But Medicare is limited primarily to short-term, recuperative care. So Medicare does not pay for long-term medical services, such as assisted living or adult day care. Medicare may pay for home care if a doctor deems it necessary and a Medicare-certified home health-care agency provides the service.
Some church-supported homes offer low-cost help and there are a few federal grants available, but most of Kentucky's poor count on Medicaid.
Medicaid pays for health-care services for the very poor of any age. To qualify, nearly all of a patient's assets must be depleted.
For those elderly who wish to protect their assets in case of long-term illness, long-term care insurance policies are available. These are often dubbed
"Medigap," because they can pay many of the costs not covered by Medicare.
What is your chance of having to go into a nursing home? According to the National Association of Insurance Commissioners, one person in three who turned 65 in 1999 will stay a year. One person in 10 will stay five years or more, with the chance of longer stays much higher for women than for men.
For more information, the Kentucky Association of Not-For-Profit Homes and Services for the Aging is offering free tours in May of facilities in Lexington, the Louisville area, and northern Kentucky. For details call Louise Schroader Epperson, the association's executive director, at (502) 992-4380.
How to decide on long-term care insurance
When deciding whether to buy long-term care insurance, there is no definitive answer. However, the United Seniors Health Cooperative, a Washington-based consumer
organization, suggests that insurance be considered if:
· You have more than $75,000 in assets (not counting house and
car) for each person in the household;
· Your annual income is at least $30,000 for each person in the household;
· You'll spend no more than 10 percent of your income on long-term care insurance;
· You could still afford the policy if its cost went up by as much as 30 percent.
What you should know to administer a will
Heirs are often tapped as executors to administer a will after a death. Being chosen is an honor and a way to shepherd the family fortune. But it can also be a big headache if you're not prepared. So you will want to have a detailed conversation with anyone naming you as an executor-take notes on those details and keep them where you'll be able to find them.
Executors must observe a strict standard of care in carrying out their duties, which include:
· Getting the will probated. This usually involves having a lawyer petition the court to approve the will. (A trust is not probated.)
· Collecting the assets, so they can be distributed according to the terms of the will. The executor must find all car registrations, stock certificates or account statements, mortgage papers, deeds, pension benefit papers, and savings accounts.
· Making sure the assets are valued. A valuation is needed for estate tax purposes, but it is also done for the sake of the heirs who receive their assets at a tax basis that is the value at the date of death.
· Filing the necessary tax returns, federal and state, and paying the taxes. Taxes include federal estate tax and state death tax, and any income tax the estate might owe. The executor must also file the decedent's final income tax return.
· Canceling credit cards and other accounts.
· Paying the estate's debts.
· Distributing the estate's assets. The executor may also need to manage the estate's assets until they can be sold and the proceeds distributed.