When you or a loved one is diagnosed with Alzheimer’s, dementia, or another degenerative condition or illness, there are important steps you must take to protect your finances and your future.
A failure to take proactive and protective measures today will cause significant adverse consequences in the future. Don’t be one of the people who say, “I wish I had taken action years earlier when I could have.” Speak with an experienced New Jersey Alzheimer’s and degenerative illness planning lawyer.
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A word from Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright
I know you’re highly stressed and anxious. You have every right to be. Alzheimer’s and dementia make these times for you and your family life changing.
You may very well have a loved one who’s showing signs of memory loss and you’re concerned that it might be Alzheimer’s Disease…or perhaps your loved one has already been diagnosed with Dementia or Alzheimer’s.
I empathize with you and I’m here for you. You’re concerned about getting good health care and wondering where you’ll find the strength and resources to carry on throughout the course of a disease that can sometimes last for 5, 10 or even 20 years.
And then there is the cost… you’re worrying if you might lose everything to Alzheimer’s and long-term care costs.
The 9 Crucial Steps to Alzheimer’s Planning
Here is a brief checklist of what you need to do now.
STEP 1 Start Your Alzheimer’s Planning Immediately
First and foremost, it is important to begin your Alzheimer’s and/or Dementia planning immediately. As soon as the first sign of Alzheimer’s or memory loss is suspected, you must have the proper documentation in place to ensure appropriate life care and financial planning is legally possible. If you suspect a family member may be experiencing some early signs of Alzheimer’s or any other degenerative condition, consult an Alzheimer’s and Disability Planning attorney immediately to evaluate their situation.
Remember to bring important documents with you to your consultation. These documents should include any wills, trusts, powers of attorney, health care directives, and other important estate planning documents that may be useful for your Alzheimer’s planning. Documents about financial assets should also be shown to your attorney. An Alzheimer’s planning attorney will be able to evaluate the situation and provide guidance in determining what steps you should take. Taking appropriate action now can save you lots of time and money down the road, typically helping you avoid a court-mandated guardianship proceeding later.
STEP 2: Consider Drafting a Durable Health Care Directive(s) and a Living Will
THE BENEFITS OF A DURABLE HEALTH CARE POWER OF ATTORNEY AND LIVING WILL ARE IMMENSE
Many of us have heard of the term “power of attorney”, but did you know this powerful document can be applied in the health care context? A Health Care Power of Attorney (HCPOA) is a document that authorizes someone else to make medical decisions for you should you become unable to.
Your HCPOA should include essential provisions, including the following:
- A clear, written declaration stating your intent to give the power to make health care decisions to a designated individual(s);
- Evidence of legal capacity. This is established by your signature when you voluntarily and knowingly sign the HCPOA;
- The signatures of two adults over 18 who witness you signing the document. These witnesses cannot be agents, relatives, or heirs authorized by the document to be directly involved in your healthcare decision-making.
Making the proper choice of who should act as your agent when you are unable to make healthcare decisions is a big one. This individual should be someone you consider trustworthy, responsible, and caring. Keep in mind that the person you select may have to make some of the most important decisions about your life. Always remember (when available) to have your physician and agent receive a copy of the HCPOA.
Alzheimer’s dementia patients must always sign these documents as soon as possible following diagnosis because when the disease can and will fully strike, the person will be unable to legally create and sign the document. If one takes too long to sign his/her documents and he/she lose the capacity to create the HCPOA, a guardianship proceeding in the courts will be necessary, costing significantly more time and money for the family, and always this: A HCPOA can be revoked and/or amended at any time by the signer before a loss of mental competency.
ALWAYS REMEMBER: Spouses and children are not, by NJ Law, permitted to make health care decisions on your behalf just because they are related to you. You MUST create and sign a written HCPOA if you wish to grant them such decision-making power(s).
Why Having a Living Will and Advanced Medical Directive in NJ is Important
A living will is similar to an HCPOA. It states your wishes and intent regarding end-of-life treatment and decision-making. Many individuals have a strong opinion about how they wish to be treated should they become terminally ill and/or terminally unconscious. Some prefer life-sustaining treatment, while others do not. You must dictate your wishes in a written Living Will. For a doctor to honor your end-of-life decision(s), New Jersey law requires clear and convincing evidence that authorizes such decisions. There is no better way to do this than by having a signed living will.
Living wills can be customized to suit your choice(s). For example, some individuals are against prolonging their lives if they become unconscious or terminally ill, while others want to use all means possible to keep them alive. Some of us are against all life-prolonging treatments, but still wish to have hydration (water) given to make them more comfortable. Whatever your wishes, your living will can be customized to suit your exacting preferences.
Discussing your wishes with family members and those close to you is extremely important. While a written living will is clear and convincing evidence of your intentions, it reduces the possibility that family members may dispute the document if the time comes when there is a true “life or death” situation. Obviously, the last thing anyone wants is for their loved ones to be fighting while they are in such a fragile situation.
If what I said concerns you, please call Fredrick P. Niemann, Esq., an experienced Elder Law Attorney, today to discuss your questions regarding an HCPOA or Living Will. Once you understand your options and have made a decision that is right for you, you can draft the document that meets your needs while discussing your wishes with family members. You can reach Fred at (732) 863-9900 or by email at fniemann@hnlawfirm.com.
STEP 3: Consider Drafting a Financial Power of Attorney
Similar to the power of attorney in the healthcare context, a durable power of attorney for finances allows you to designate an agent to handle your financial and legal affairs should you become unable. For example, should you become incapacitated, you can have your spouse or trusted child, or friend pay your bills, handle investments, pay taxes, manage your assets, and more.
Understanding the language of a financial power of attorney (POA) is important before you sign the document. You should clearly understand the effect of signing a financial POA. Always remember, the POA can be revoked by you or changed at any time prior to death or loss of mental capacity. NJ Law requires the following for all financial POAs:
- You, as the principal (creator of the document), must willingly and voluntarily sign the POA, without being coerced by anyone;
- The POA must be notarized by a notary public.
- Most attorneys recommend that you have two legally unrelated witnesses sign the document. This is not legally required but is highly recommended.
New Jersey has instituted stricter laws concerning financial POAs in recent years. The agent, acting on behalf of the principal, may only use the principal’s assets in a way that benefits the principal. If you are the principal and wish your agent to be able to benefit from the assets in any way, you must grant them such power in your financial POA.
The financial POA is one of the most powerful tools in Alzheimer’s and dementia planning. Should a loved one begin to suffer from Alzheimer’s and become unable to manage their financial affairs, a trusted loved one can take over and make the important decisions that the principal would have made were they able to.
Merely having a financial POA isn’t enough. Make sure your written financial POA is specified to your needs. The importance of a well-written document cannot be stressed enough so that your agent can effectively undertake your Alzheimer’s planning. This POA should always include authorizing language regarding banking, gifts, public benefit planning, and trusts, among other key elements.
Elder Care Attorney Fredrick P. Niemann has extensive real-world experience drafting financial POAs, among many other Alzheimer’s Planning documents. He will be more than happy to assist you by answering any questions you may have, educating you about the effects of such documents, and helping draft them. All it takes is to contact him at (732) 863-9900 or by email at fniemann@hnlawfirm.com.
STEP 4: Consider Creating a Revocable Living Trust or a Last Will and Testament
There are numerous types of trusts, but a Revocable Living Trust (aka an inter vivos trust) can be one of the most important for Alzheimer’s dementia planning. This document helps manage your assets throughout your life and continues to do so even after you die.
As the creator of a trust, you will be referred to as the settlor or grantor. The settlor places property in the trust to be held by someone you appoint, known as the trustee. The trustee will hold legal title to the property during the trust, acting with a fiduciary duty to act in the best interests of the named beneficiaries of the trust. The beneficiaries are the individuals you named to receive the trust’s benefits.
Revocable living trusts are a great option for Alzheimer’s planning and overall estate planning because they help families avoid probate, a process in NJ that distributes a deceased individual’s assets to named beneficiaries.
A Revocable Living Trust can also be used for the management of assets throughout an individual’s life, as previously mentioned. It can be revoked by the settlor at any time if the settlor has the capacity to do so. They are also not expensive to create. To learn more about trusts in general, go to our dedicated web page, When Should a Trust Be Used Instead of a Last Will and Testament, which explains trusts in greater detail.
While placing assets in a Revocable Living Trust can be a great tool for Alzheimer’s planning, it is important to note that these trusts can often impact Medicaid eligibility requirements. For this reason, you must consult an experienced Elder law attorney when creating these trusts. An attorney knowledgeable in Alzheimer’s Planning can explain the implications of placing assets in a revocable living trust and ensure your trust is crafted to your needs. To learn more about Medicaid and asset protection planning, please go to our dedicated web page, Medicaid Eligibility and Planning Strategies to Protect Assets and Income.
One alternative to the Revocable Living Trust is the Last Will and Testament (often simply called a Will), the typical estate planning document one thinks of. The Will is a written document that dictates who will receive your property and assets upon your death. To learn more about a Last Will and Testament, go to our page on Last Wills and Testaments. This page is devoted exclusively to Last Wills.
STEP 5 Review the Titles and Form of Ownership on Your Assets, Investments, and Property
It is not uncommon for people in today’s society to own property jointly. One of the most popular forms of ownership is Joint Tenancy with Rights of Survivorship, as typically seen with real estate. Joint ownership of bank accounts is also quite common, typically between husband and wife and parent and child, so each has access to the money in the bank account.
In the case of real estate owned by joint tenants with rights of survivorship, ownership of the property passes to the surviving joint tenant upon the death of the other joint tenant. Therefore, selling the property is not an issue once one owner dies. However, as long as both joint owners are alive, they must both sign a deed for the property to be sold or transferred. If one of the joint owners develops Alzheimer’s, this can be a major issue, as they may lack the capacity to transfer title and/or make such a decision to sell. To protect against instances like this, it is crucial to have a financial Durable Power of Attorney in place.
There are many advantages and disadvantages to owning property as a Joint Tenant with Rights of Survivorship. Don’t make the mistake of failing to review your real estate titles to ensure you are aware of the ownership status of ALL your properties. Have your property titles reviewed by a knowledgeable real estate and Alzheimer’s planning attorney to make sure you know exactly where you stand. This is a crucial part of proper Alzheimer’s planning and will benefit you and your estate in the future.
STEP 6 Start Planning Now to Pay For Long-Term Care in the Future
Many individuals and family members are unaware of the significant costs associated with Alzheimer’s care. Studies have shown that the cost of care for Alzheimer’s patients is, on average, over $400,000 throughout a person’s lifetime.
Not surprisingly, this can be a burden for most families. You are probably reading this, asking yourself, “How can I possibly pay for this assistance without going bankrupt?” In-home care costs around $25 – $30+ per hour or $200 – $360 per day for 12-16 hours of care. If an individual needs to be placed in an assisted living or nursing home to care for their Alzheimer’s, costs can be exorbitant, running between $8,500 and $13,000 per month! So how will you afford this? Make sure you learn your financial options. There are four basic options to pay for long-term care. They are as follows:
- Long-Term Care Insurance (LTC) – LTC insurance is, unfortunately, an option that fewer and fewer families are taking advantage of. Long-term care insurance typically pays the daily rate for in-home, assisted living, and nursing home care of Alzheimer’s patients. The amount the insurance company pays depends on the policy you take out. It is important to sign up for this option at a younger age rather than later in life, as it is often too late to qualify once an individual has been diagnosed with a degenerative disease or the premiums are unaffordable. Waiting until later in life is the principal reason why people cannot afford long-term care insurance.
- Self-Funding – Often, self-funding is the only realistic option for the wealthy. Self-funding means individuals opt to (or are forced to) pay for their care out of their own personal funds. Many less-wealthy families falsely believe this will be the case for them. Fortunately, this isn’t always the case, as many individuals with limited money do have alternative options. I’ll discuss this further on.
- Medicare – The national healthcare entitlement program is available to individuals 65 years of age or older, as well as certain younger individuals with qualifying disabilities. Medicare offers short-term assistance with nursing home costs, but only in situations where there was a prior hospital stay, and the individual has met strict requirements set by the state and the Centers for Medicare & Medicaid Services. Medicare will not pay for your custodial Alzheimer’s care.
- Medicaid – A government program funded jointly by the state of NJ and the federal government; Medicaid is administered by the NJ Department of Health & Senior Services through the County Board of Social Services. Often, the best payment option for individuals with Alzheimer’s and Dementia, Medicaid can cover the cost of medical care, nursing home care, and, in certain cases, home and community services. The downside to Medicaid is its strict financial and medical eligibility requirements. However, if you meet the criteria, you will experience the many benefits of this program.
STEP 7 Educate Yourself About New Jersey Medicaid and Begin Planning Immediately
As previously mentioned, Medicaid is funded by both the federal and state governments. Individuals must meet strict eligibility requirements. One of the goals of the Medicaid program is to keep those who need care at the lowest level of care that is medically feasible. The state helps them reduce the cost of care while allowing the individual to remain in their own home or a low-cost, less-institutionalized facility.
Many individuals believe Medicaid only covers nursing home care. Once they find out it covers in-home care and assisted living, they have waited too long to plan, and as a result, they are forced to personally pay for Alzheimer’s care out of their own savings. Don’t make the mistake of failing to plan. It could cost you money you otherwise would be able to save. Remember, you can get Medicaid-funded care at home!
Why Planning Ahead Benefits You and Your Loved One
Alzheimer’s is a disease that has a natural and sometimes rapid progression. You simply can never know when the disease will take over, and long-term healthcare will be necessary. For this reason, you may want to look into purchasing long-term care insurance now.
If you are unable to purchase insurance now for the reasons discussed earlier on this page, whether it be due to a pre-existing medical condition or simply because it is too expensive, you should consider planning now to qualify for Medicaid. With New Jersey’s constantly evolving Medicaid laws, it is believed that in the near future, Medicaid planning may have to be done more than five (5) years in advance of when the benefits are needed.
Even if you are currently in a position where Alzheimer’s, Dementia, or another disease has struck a loved one, and you need to obtain care immediately, there is still planning you can do. Meet with a qualified Alzheimer’s attorney to determine how you can help your loved one qualify for Medicaid immediately or in the near future if they don’t already qualify.
Medicaid Eligibility Requirements in New Jersey
Becoming familiar with the requirements to qualify for Medicaid is extremely important since Alzheimer’s and dementia will require long-term care. Before a financial assessment is even taken by the state, the applicant must meet certain general criteria, including:
- Being a U.S. Citizen or a legal alien;
- Being a New Jersey resident;
- Having a legitimate Social Security number;
- Reside in a medical institution or approved home/community-based setting;
Once these criteria are met, the government will evaluate your financial eligibility to ensure your income is below the permissible limit. Only then will you qualify for Medicaid benefits. A single applicant may have only $2,000 in “countable resources” to qualify. Married couples can’t have more than $4,000 combined in countable resources.
Exempt resources include your home (under limited circumstances if married, but not exempt if single or widowed ), a vehicle, burial plots, irrevocable prepaid funeral plans, and term life insurance, among others. Medicaid will also consider all other resources as non-exempt when calculating your financial eligibility. This includes all savings and checking accounts, cash, certificates of deposit, savings bonds, retirement accounts (such as IRA, 401k, TSA plans), nursing home security deposit, other real estate besides your primary residence, a second vehicle, boats, stocks, bonds, promissory notes, and other investments.
While the rules are very complicated, it is usually safe to assume that an individual will qualify for Medicaid as long as they hold under $2,000 in countable resources in NJ.
Questions to Address After The 9 Crucial Steps
Here Are Some Questions For You to Answer
- Does the person with Alzheimer’s have assets that include trusts, life insurance policies, long-term care insurance, annuities, real estate interests, stocks, bonds, retirement plans, IRAs, or other investments?
- Has the person with Alzheimer’s or their spouse gifted or transferred any cash, bank accounts, real property, or personal property to someone within the last 60 months (excluding typical gifts for holidays)? This includes placing another individual’s name on real property ownership.
- Regardless of whether the applicant has enough income to pay for his or her current care, does he or she expect to pay for long-term care costs within the next 12 months?
- Is the Alzheimer’s patient interested in legally protecting assets for a spouse, child, or family member?
If you answered YES to any of the above questions, it is likely in your best interests to consult with Fredrick P. Niemann, an experienced Alzheimer’s and Dementia Planning Attorney, before you apply for Medicaid assistance.
TESTIMONIALS
Mr. Niemann has been a god send to me and my family. He has met with me many, many times with patience, sensitivity and understanding that few people expect from an attorney. My family issues are complex, and Mr. Niemann understands what I want to happen to my estate upon my death especially for my adult incapacitated child and other adult children. He created a special trust for my son. He has followed up with me to help me make decisions without forcing his opinions on me. In the end, he told me, ”Jerri, my job is to explain your choices and help you understand the legal effect of those choices”. He guides me and puts me at ease. He wants you to make decisions that are the right ones for you.
—Jeraldine Vincitore Freehold, NJI join in every word my Mom described about Mr. Niemann. She just raves about him and when she leaves his office, she is calm and totally confident in his counsel, wisdom and advice. Our family is blessed with him being my Mom’s protector and confidant.
—Teresa Vincitore, West Patterson, NJ
STEP 8 Learn From the Experience of Others
As we age, it’s common to see friends and others we are familiar with develop illnesses or debilitating conditions. While stressful to see a friend and/or family member develop Dementia, Alzheimer’s, it is important to learn from this experience to help yourself and your family. Take the following case study, for example:
Case Study
Bob, age 87, has developed Alzheimer’s. Both he and his wife, Liz, age 83, are New Jersey residents and have worked together for many years to fight Bob’s disease.
As is often the case with Alzheimer’s, Bob developed subtle memory loss at first, forgetting where he left his wallet, keys, etc. His physician said it was dementia and was progressing slowly, but unfortunately, the disease accelerated, and soon Bob would not just forget his keys but forget what they were to be used for as well.
Liz, exhausted from caring for Bob at home, finally agrees to take him to adult day care after her children convince her. It turns out to relieve her burden significantly, but Liz worries that she will not be able to pay for this forever. She inquires about the steps she should take to ensure Bob’s financial security and quality care.
Having started thinking about Alzheimer’s planning, she should first look at her Power of Attorney. Liz already has a financial and healthcare Power of Attorney as well as a Living Will, but nothing beyond this. What else should she do?
Unfortunately, since Bob is not in a nursing home, none of the time, sacrifice, and costs spent so far can be used to reduce the family’s Medicaid spend. This is so even though Bob would undoubtedly be in a nursing home already had Liz and their children not cared for him all these years. So is the unforgiving world of Medicaid.
Bob and Liz have a home valued at $500,000 and an older-model Cadillac. They have $380,000 saved, but Liz still worries because this amount was $675,000 just last year.
So, what would an experienced attorney like Fredrick P. Niemann, Esq. recommend in this situation?
Instead of nursing home placement, which the family does not want, first we would immediately consider Medicaid home care benefits under Managed Long-Term Services and Supports (MLTSS), an option now consolidated under New Jersey’s recently approved Medicaid state plan.
Once an application is filed and after pre-application planning, we would designate Bob as the “institutionalized spouse”. Because of this label, all assets spent from here on out will be taken from Bob as his Medicaid spend down. This essentially provides a shortcut to qualifying for Medicaid, which in turn can save Liz and the family tens of thousands of dollars.
In sum, by undertaking pre-filing planning and then applying for home-based services, Liz and Bob have effectively established a snapshot date. Therefore, all money spent on Bob’s care, including his adult day care after the “snapshot date,” will count toward his Medicaid spend-down. Additionally, they may qualify for certain veterans’ benefits, which could provide up to $2,295 in extra income each month.
By speaking with a qualified Alzheimer’s Planning attorney, Liz has gained an education on the topic and is now able to take steps that will save her family many, many tens of thousands of dollars. She has also ensured Bob will qualify for additional care services in the home. Finally, the Veterans Administration may cover a significant portion of Bob’s care, giving them yet another significant benefit.
Obviously, Liz can rest much more easily knowing she is receiving proper assistance from Medicaid and the VA. Having financial security can lighten the burden on anyone’s shoulders.
Medicaid laws are extremely strict, and qualification requirements are confusing. Don’t be intimidated because you don’t understand the laws. Not many people do. You need proper advice to start saving and receiving the benefits you are entitled to.
TESTIMONIALS
I am happy to refer the many families I work with daily to Fred Niemann. He is extremely detailed and able to handle all the aspects of elder law that most families need assistance with. Many of the families will make a point of thanking me for referring them to Fred and are able to refer him to others as well. Therefore, I recommend his services highly to anyone seeking a lawyer with integrity, knowledge of his trade and a good reputation.
Christine Meyer – Eldercare Advisor at A Place for Mom
STEP 9 Seek Advice of a Skilled Alzheimer’s Planning Attorney
Families with a member who has Alzheimer’s or another serious disease are often in a vulnerable position and need assistance. People have tons of questions regarding Medicaid eligibility, financial security, nursing home care, estate planning, and many other important topics.
In most cases, Alzheimer’s, Estate, and Medicaid planning is critical. Families need to be protected and assured that their assets and resources are not wasted when they could otherwise be receiving government benefits.
So where should you turn for help? Does someone know Medicaid laws? Financial planners? Accountants? Insurance salesmen? Who is in the best position to handle these diverse, complex issues as a whole and bring expertise in the overall situation as opposed to a single area? It is crucial to obtain advice from someone who considers the whole picture and ensures that all your rights are protected and that your resources are used effectively.
Fredrick P. Niemann Esq.
Fredrick P. Niemann, Esq. has knowledge and many years of experience in Alzheimer’s Planning and would be more than happy to answer your questions. Just as you wouldn’t want someone who is an expert in administering first aid performing a heart operation, you don’t want someone who lacks expertise in Alzheimer’s/Dementia planning advising you during such a critical period. Proper advice in a time of crisis can help take a significant weight off your shoulders by protecting your rights, preserving your assets and income, and preventing unnecessary costs.
For more information about any of the topics discussed or if you have any questions regarding Alzheimer’s planning, please contact Fredrick P. Niemann, Esq., a qualified NJ Elder Care and Elder Law attorney. He can be reached at (732) 863-9900or by email at fniemann@hnlawfirm.com.
Written by Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a New Jersey Alzheimer’s Planning Lawyer