Let’s face it - death is a fact of life most of us don’t like to face. But the fact of the matter is, it is an inevitability for which we all should plan for and be prepared. And, in the wake of continued medical advances, people are living longer and requiring elder care well into their senior years. Considering the breadth of pre-planning, we asked five local leaders in the field for their expertise on the options and factors to consider when preparing in advance for your health care, senior living, finances, and funeral and memorial service decisions.
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What are the benefits of pre-planning?
NICOLE COOK: Knowledge is power! Being aware of the housing options available in your community and the cost associated with those options is key in effective planning. With more couples choosing to downsize and relocate to retirement communities earlier, having a plan in place and preparing for it financially will better enable you to reach your goals.
PATRICK KELLY: From our perspective, the benefits are two-fold. First and foremost, you get to decide the way you want your service. When you pre-plan, you’re completely in charge. When you leave it to someone else, there are those two questions they can never answer: Did we do the right thing? and Did we do what they wanted?
The second piece of it is, financially, it makes more sense because the cost of funeral and cemetery services literally doubles every eight to 10 years. We are an inflation-proof company, so when you pre-plan, you lock in at the price of that day. It doesn’t matter when you need the service; you can never be charged any more money.
It only takes 10 percent down, then we finance it based on your budget. We’ll show you what prices could be in the future – and what prices were – and show you the trends. We don’t do credit checks; we don’t do banks. Everything is done inhouse, so financially, it couldn’t be easier.
TAMMY GODUSI: We at Home Instead Senior Care frequently see families surprised and overwhelmed when a crisis occurs that involves care for a loved one. We stress the importance of pre-planning in hopes of preventing a crisis and being prepared should one occur. Having a good plan in place can make a huge difference in the quality of care received and allow you to have control over your choices, leading to a positive, healthier outcome.
By having a home care plan in place, families will have the knowledge and understanding of what can be provided at what cost and will be able to handle the crisis with less stress.
JASON CLAMME: From a health care perspective, pre-planning is especially important because it helps to communicate your preferences and choices regarding what medical interventions you would or would not want if you were ever in a condition in which you could not make your own health care decisions.
Recently, there have been some well-known cases of people who have been in unfortunate health care circumstances and were unable to make those decisions. Their lack of pre-planning resulted in considerable family conflict, questioning and difficulties in determining the best route to take.
So, when you think about planning for health care, it is certainly about making sure your own wishes are made known.
However, it is just as important for those who would have to make those decisions for you. It’s a gift for your loved ones to know they don’t have to make the decisions.
HELAYNE LEVY: This is one of the most pressing discussions I have with people, because I think this is the biggest place where people fall short – it’s here that very intelligent, educated people are not connecting the dots or extrapolating out what can happen because it’s not talked about.
Certainly, the people who live through it with their loved ones, parents or siblings get a better idea of what can happen – of how the process actually works in real-life situations – but still fall short if they don’t carry through for themselves. If I can impart any lesson that can be learned on the backs of those who lived the mistake, it would be that.
I don’t want people to feel hopeless if pre-planning has not been done. It is rarely “too late” to do anything but there is always a prime time to plan, and that is before crisis strikes. There are tremendous benefits to pre-planning, and let’s put this in perspective; by “pre-,” we mean in advance of a crisis. And by crisis, we are talking about stroke, car accident or some unexpected catastrophic event.
Planning can be done in a crisis, so by no means do I want people to feel helpless if crisis strikes. You can definitely do crisis planning but think about how that works – in a crisis, there is a lot going on. Decisions have to be made, and with the stress, anxiety and confusion of a crisis, those decisions may not be the best ones that we can make. Whereas in preplanning mode, we can put our intention, attention and understanding to these decisions and actually learn about our options.
Learning doesn’t happen in a crisis. We can only react in a crisis. I think we can all agree that learning in a pre-planning environment is the way to go. Unless we think a crisis won’t happen to us. I do think to a certain extent, we think the bad things won’t happen to us; they happen to other people. This is called destiny planning – fingers crossed and I hope it all works out. But then we are choosing crisis planning.
The power behind pre-planning is that you are able to actually learn about what you are doing and, more importantly, why you are doing it. Contrast this with just doing something just to get through it. I feel people short-change their life care plan and outcomes if they do this.
I think most of us may believe that we will just live and then die. Most of my planning involves the more realistic view that some of us will endure some type of long-term care need, so living and then not dying but instead living and becoming sick.
What benefits extend beyond living will matters?
CLAMME: We often just think about what kinds of life support a person may or may not want, but there can be a number of other health care decisions that might need to be made – things like organ and tissue donation, memorial and funeral planning and disposition of remains.
Also, what personal story do you want to leave behind? What kind of legacy, what kind of advice or wisdom? What do you want to make sure your children and your children’s children know about you?
Health care pre-planning is bigger than just one decision. It’s much more robust and there’s a lot more to it than people might realize.
LEVY: I have had some people comment, when we are discussing the need for a living will, “Well, if I’m incapacitated, I won’t care what happens to me.” While for some of us, incapacity will look this way – where you are not at all aware of what is happening to you – there is another type of incapacity, in which you are very much aware of what is happening to and for you but are unable to participate in any decision-making or articulate your wishes and desires.
But the importance of this discussion really affects you way before an end-of-life decision needs to be made. The truth is, when you are incapacitated, you are unable to make important personal decisions for yourself that can affect your very definition of life. These decisions take place way before an end-of-life discussion. There may be periods of time when you are incapacitated but very much alive, during which time decisions need to be made that affect those things most personal to you – for example, decisions surrounding where you live (and that could be decisions about your state of residence) your health care agent determines in your incapacity.
Many people don’t realize that if, for example, you have appointed your daughter, who lives in Michigan, as your initial health care agent, she can move you to her state of residence if such a move would be more convenient to oversee your care. She would also make decisions about the type of medical attention and treatment you receive, your dietary needs, who can visit you, and the type of setting in which you receive care. These are things people don’t think about when considering decisions about their health care power of attorney and advance directive because they are only thinking about end-of-life decisions. But that is not the only scope of the health care agent’s authority over you.
COOK: There are many decisions on retirement planning that are not end-of-life or health-related. Finances, proximity to family for support, and upkeep and physical demands of your home are all things to plan for as you decide where you will spend your retirement years.
KELLY: The idea of a living will is, a lot of times, to take care of someone if he or she is unable to make sound health care decisions for themselves. Again, by pre-planning, at least that piece is taken care of and doesn’t have to wait for probate or insurance or be decided by someone else.
It’s kind of a peace of mind document. It helps people to say, If I do become incapacitated, these are my directives and these are the people I trust to carry them out. When you pre-plan, there is no one else who can make these decisions.
You’ve made them; they can often times be irrevocable.
What challenges or disadvantages can arise from failing to pre-plan?
LEVY: I meet with people who have never consulted with an elder law attorney prior to seeing me. The fact-finding and interview processes are very different in an elder law context. We are not only considering the legal aspects of your life but, more so, how the legal intertwines with the personal and financial aspects of your life.
Part of the discussion includes what one’s parents experienced as they aged, diagnoses, infirmities, need for long-term care and their ages at death. Then we explore family dynamics, including the type and personality make-up of children, if there are any, as well as the children’s spouses – and often the level of influence those spouses have over our children. We consider whether this is a client’s first or subsequent marriage. Are there joint children from the marriage or is this a blended family?
What is the client’s vision of their near and long-term future? What exactly do they want to have happen? What if the actual need is different from what they want?
If you thought life was complicated, imagine having to make critical decisions during a time of crisis. For me, pre-planning is essential if you have the foresight to see its benefits.
KELLY: When you don’t pre-plan, you’re leaving everything up to the people you leave behind. You’re asking your family members or loved ones – or in some cases, strangers – to make decisions on your behalf at a time that is very emotional. And if it’s your family member, it’s probably the worst day he or she has experienced.
Because you didn’t pre-plan, now you make them sit with a funeral director and make them answer a great number of questions before they can leave. If you haven’t done any financial documentation, they must try to figure out how to pay for it.
When you pre-plan, you can finance these costs. When you wait until you’re dead, everything is due. When you fail to pre-plan, you’re literally saying I’m going to make someone else do these things for me. Pre-planning saves the heartache of all of that.
CLAMME: Often, when advance care planning kicks in, it is because of a health care crisis, which can also include a lot of strong emotions, financial considerations and family dynamics. The decision- making process can become much more difficult if families don’t have care planning documentation already in place. Consequently, decisions may be made using information from sources other than the person needing the care.
COOK: Planning under stressful circumstances can lead to a feeling of being out of control and making regrettable decisions.
It is never too early to start engaging in your planning process. Make sure your loved ones know your plan and preferences. Failing to pre-plan financially can impact your choice of retirement destinations or health care options.
At what age or stage in life should you begin thinking about pre-planning?
GODUSI: The average age of home-care recipients is 69. I think pre-planning should start years earlier, considering health conditions can change.
I know most of the clients I speak to want to participate in and make their own decisions about home care. That being said, at Home Instead Senior Care, we ask each client to think about his or her goals for aging in place.
For example, long-term care insurance policies tend to be more affordable and obtainable before age 55, and tend to get exponentially more expensive and difficult to obtain after the age of 55.
It is also important to plan in terms of where you want to live and the support you have available. You would want this before any age-onset physical challenges take place.
KELLY: As soon as you’re mature enough to understand that this is an investment. It’s a great investment for a young person. As soon as you can do it, treat it like it’s a payment on something you can throw some money at every month, and when it’s paid, you’re going to have it for the rest of your life. If you’re in your 20s or 30s and you’re going to live to 80 or 90, these costs could be hundreds of thousands of dollars to do the same thing we’re doing today for$10,000. The costs just continue to escalate, the services will never go down and you can never be charged more.
COOK: For adults, it is never too early to begin pre-planning, even if it’s just discussing where or when to retire, or even what your plan will be should something unexpected happen.
CLAMME: At Lower Cape Fear Hospice, we go out and talk to people of all ages. I’ve even spoken to groups at UNCW to tell them it’s never too soon to do this kind of work. Once you’re an adult and make your own decisions, this pre-planning can begin. Accidents can happen just as often as health issues related to aging. Many times when it is a younger person, the choices are even more difficult because that’s not the way life is supposed to go.
LEVY: Certainly, any time there is a change in circumstances, such as health condition, a diagnosis, change in marital status, death or illness of a family member. Everyone who has attained the age of majority must have his or her legal estate planning foundation in place, which includes powers of attorney for financial decision-making and health care, including the living will, which is also known as an advance directive.
What advice do you have for people who are hesitant to begin these discussions?
CLAMME: Our “Begin the Conversation” program really encourages people to do two things. One, to put the documents in place – some basic forms, like a living will and a health care power of attorney – that can be a voice for you when you are unable to speak for yourself.
But the second piece – and why we named the program, “Begin the Conversation” – is we as a people and culture need to be able to tear down some of the walls surrounding end of life. The only promise life provides us is that each of us will one day face death, so why not have meaningful conversations about what that can be like?
Also, if there is an unforeseen crisis, you know you are giving your loved ones direction so they can journey through it with more information, knowledge and confidence. Too often, we hear from family members who thought this would never happen and have no idea what their loved one would want. That’s the kind of regret I want to save people from.
ELLY: Try to look at it like anything else you’re planning for or insuring against – you have car insurance, renters’ insurance, life insurance, health insurance. This is something everyone is going to need. Doesn’t it make sense to put something in place? It’s not a what-if; it’s a when.
Death affects people differently – we talk to 80-year-olds who still don’t want to talk about it, and we talk to 20-yearolds who get it. I don’t know that there is a time that’s right for everybody; it’s a very intimate decision. Once you’ve made this decision, you are really admitting to yourself that you are not invincible and that’s hard for some people.
The bottom line is, it makes sense for someone to put a plan in place – just like you’re planning your career, just like you’re planning your family. This should be part of your financial and insurance package as you’re preparing yourself to do anything.
COOK: Ask someone you trust to assist you in this process. Seek out an expert if you need it. The benefit of planning and having your preferences known will give you and your loved ones’ peace of mind.
GODUSI: It does not have to be depressing to have the discussion of where and how you want to age in place. Pre-planning ensures you can make the choice of remaining at home – where most would prefer to be – and promotes peace of mind for family members. Concentrate on the positives of pre-planning: less stress on the family, knowing what to expect and participation in choices.
How can people plan for long-term elder care, and ensure longevity of savings?
GODUSI: The majority of home care services are privately paid by seniors or their families, with cost depending on hours needed per week – another great reason pre-planning is so beneficial.
It is important to understand the government programs that help pay for the cost of senior care. Qualifying for government programs like VA benefits and Medicaid does not happen quickly. It is time well-spent to research programs that help with senior home care. Medicare does not pay for senior long-term home care. Medicare.gov is a good resource that explains what is covered under Medicare benefits.
At Home Instead Senior Care, we can provide support with financial planning for senior home care. Our long-term care specialist can provide direction on the various options.
COOK: Speak with a reputable expert regarding options. Realize that all long-term care policies are not the same. Do your research and know what services are covered.
CLAMME: Start the process early and before the need is apparent, so you can take the time you need. There are some agencies and resources out there to help navigate, but it could be as simple as doing your own research online and touring different facilities. Maybe go through your faith community, if you have one, or through your senior center.
Lower Cape Fear Hospice also has a number of services many people aren’t aware of. We have palliative care, which is an extra layer of care and support, for people with serious illnesses who want to stay comfortable and independent while curative treatment is ongoing.
LEVY: There are two ways to plan for elder care. One is to design your foundational estate planning documents so they permit the asset protection planning to be done by someone other than you. This means that within your financial power of attorney, you are authorizing the agent you name to engage in asset protection planning if you are unable to do so for yourself. This embodies one of the more significant differences between estate planning law and elder law.
Another way is to do trust planning or financial long-term care planning through the asset-based long-term care products. My practice is geared more towards pre-planning versus crisis planning as a matter of choice, but I will assist with crisis planning if a client needs it.
I have a lot of clients with pretty significant sums of money saved to an IRA, 401(k) and other company pension plans. Let me say at the outset – I am a big proponent of my clients spending their money on themselves to travel, recreate, upgrade or retrofit a residence to age in place, check off bucket list items, learn new things or have new experiences.
However, I always anticipate that my clients may meet with what I call an “untimely” or unexpected death. Should this happen, this pretty significant IRA or other type of qualified money is now available to be passed on to a younger generation, and how effectively this is done is purely up to you. If you give it no mind, then your heirs or beneficiaries can inherit your IRA at his or her own life expectancy for Required Minimum Distributions, which will create a very beneficial outcome known as “stretch out.” But there may be no predator or creditor protection associated with that IRA because the U.S. Supreme Court removed creditor/predator protection for inherited IRAs in the June 2014 landmark case, Clark v. Rameker.
Inherited IRAs are often the prime target in a divorce proceeding and the subject of divorce settlements because it is usually the largest bulk of liquid money that is not routinely available and accessible to younger people.
We know that our children have not, and will not, have their own retirement plans. Employees today are rarely with a company for 20 or 30 years and we know that defined pension plans are non-existent. When a parent can pass on a retirement account to children, there are distinct tax and growth advantages available to children and grandchildren and it can act as a pension for what has been called the “pensionless society.”
Our children have not saved money for their “rainy day,” let alone their retirement. For some, these types of retirement accounts will be the largest source of liquid money they have ever received. How will your child handle such a windfall? Will they be disciplined enough to just pull out their RMDs (Required Minimum Distributions) and save it rather than spend it? Will they be able to resist the urge to withdraw and spend? Most importantly, there are ways to provide divorce and creditor protection of inherited IRAs while also optimizing this concept of stretch-out (tax-deferred compounded growth for your younger beneficiaries) simultaneously.
Children and grandchildren aside, there are strategic ways to use your IRA money and other taxable assets without immediately incurring the taxes associated with liquidating the monies. These options provide for amplified death benefits or an amplified bucket of money available for long-term care needs when the IRA is transferred to a long-term care vehicle without incurring taxes.
Again, the more attention and intention you dedicate to exploring such options, the more understanding you will have to make what you already have in assets work for you. This is what I mean by taking personal responsibility for your outcomes.
How have senior living options changed, and why is it important to pre-plan for those options?
COOK: Today’s seniors are not necessarily waiting until their 90s to transition into a different setting. With many independent living communities now focusing on maintaining one’s vibrancy and active lifestyle, the 55-plus demographic is embracing the opportunity to downsize and enjoy their retirement years. They see the value in having a more carefree lifestyle without having to worry about maintaining a home, as well as the benefit of having fitness and lifestyle programs at their fingertips. Some communities have full-service restaurants with full ABC licenses, but offer flexibility in how these are utilized.
It is important to research and understand the format for each community and determine which one is the best fit based on your individual financial portfolio. The earlier you begin planning and saving for this, the broader your options will be.
GODUSI: More and more seniors are planning to age in place at home instead of a nursing home when they require care. Nine out of 10 seniors 65 and older want to stay at home for as long as possible.
As Americans are aging, it is predicted that, by 2020, 56 million Americans will be age 65 or older, and 70 percent will need assistance at some point. It is important to pre-plan to know the options, learn about available senior resources, plan for the cost and be prepared with knowledge and understanding that can lessen stress and lead to a healthier outcome. Home Instead Senior Care can provide guidance and expertise toward planning for aging in place.
Why is it important to understand the difference in senior living options?
COOK: Unfortunately, there is not a one-size-fits-all scenario. Senior living options are designed to accommodate different lifestyles and abilities. Finding one that suits your current lifestyle and meets your budget and criteria for the future is important.
Some retirement communities – commonly labeled “independent living” – require residents to be fully capable of living independently, with no assistance required, and offer programs to maximize their potential.
Anti-aging therapies are also finding their way into the more prominent communities. Many also offer a continuum of care, allowing residents to transition to a different area should their health decline.
Thorough research of the available options and services offered by each takes time, but is worth the investment.
GODUSI: It is important to not confuse home care with home health.
Home health is medically necessary and doctor-prescribed care completed by medical professionals, such as physical therapists, occupational therapists, social workers, registered nurses and home health aides. Home health providers perform health services, such as administering I.V. medications, changing wound dressings or helping with prescribed exercises.
Home care provides caregivers who are professionally trained to assist seniors in daily living activities like bathing, dressing, meal preparation, eating, transportation, running errands, medication reminders and light housework. Sometimes, home care’s most important goal is to provide companionship and mental stimulation by engaging clients in conversation and other activities. Home care ensures seniors’ safety by recognizing and alerting family members to potential signs of