Elder law is the area of legal specialization that is focused on the interests of senior citizens. There are a number of different elder law issues that are pressing at the present time, and one of them is the matter of elder financial abuse. It is difficult for experts put an exact number on the amount of the losses, because the vast majority of cases go unreported. This being stated, we are talking about billions of dollars each and every year.
Why do so many instances of elder abuse take place in the shadows? There are a couple of different reasons. Sadly, family members and other people that are close to the victims are often the perpetrators. The people that are abused do not say anything because they do not want to get the abusers into trouble.
In other instances, they are physically afraid, or concerned that the care that is being given by the abusers will be withheld. Dementia is not uncommon among individuals that reach an advanced age. Sometimes, people that are being financially exploited simply do not know about it. This can be because of a diagnosed condition, but it can also come about through a simple lack of awareness.
The acts of financial abuse that are perpetrated by individuals that know the victims could be described as crimes of opportunity. However, there are other types of exploitation. There are door-to-door scam artists out there that can target senior citizens. Telephone-based scams are not uncommon, and email con artists are ubiquitous. There is also the matter of identity theft.
As elder law attorneys, we endeavor to raise awareness about elder financial abuse. We can also help you take legal steps to prepare yourself in advance, and our doors are always open if you would like to have a discussion with one of our lawyers.
Nursing Home Expenses
Elder law attorneys help clients devise nursing home asset protection strategies. Most people will eventually need help with their day-to-day needs, and many will reside in nursing homes. These facilities are extremely expensive. Here on Long Island where we practice law, you are looking at $120,000 a year for a private room in a nursing home.
If you are thinking that you are not too concerned because you will qualify for Medicare coverage when you reach the age of 65, we have some bad news for you. This program will pay for convalescent care after an injury or illness, but it does not pay for custodial care. This is the form of care that nursing homes provide for their residents.
When you evaluate these nursing home expenses, in many cases, you have to multiply them by two for married couples. Paying for significant stays in a nursing home out of pocket could potentially consume all or most of the legacy that you intended to leave for your loved ones.
Medicaid Planning
There is a way to preserve resources for the benefit of your family members if you act intelligently in advance. Medicaid is another health insurance program, and it does pay for nursing home care if you can gain eligibility. However, there is a low asset limit, so you cannot qualify if you are a person of reasonably solid means.
To qualify for Medicaid to pay for nursing home care, you could essentially give your children their inheritances in advance. It would also be possible to establish and fund an irrevocable, income-only Medicaid trust. If you go the latter route, you would not be able to touch the principal, but you would be able to receive income that is earned by assets in the trust until you apply for Medicaid.
This can seem like a simple solution, but timing is everything, because there is a five-year look back period. You have to complete all gift giving at least five years before you apply for Medicaid coverage. If you violate this rule, you will not be able to qualify.
A penalty would be imposed that would be based on the amount of the divestitures as they compare to the cost of nursing home care in New York. For example, if you gave away enough to pay for a three-year nursing home stay, your eligibility would be delayed by three years.
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If you would like to learn more about elder law issues, attend one of our free seminars. There are a number of dates coming up in the near future, and you can click this link to see the schedule.
Mark S. Eghrari, Estate Planning Attorney
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