Eldercare and Estate Planning Considerations for Seniors

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Seniors face many decisions when it comes to Eldercare and Estate Planning. Besides planning for retirement, it is important to plan in case of potential sickness, incapacity, or death. It is difficult to watch a loved one age but having a clear roadmap for what might arise eases the strain on the family.

Medicare/Long-Term Care Planning

Generally, seniors are eligible to sign up for Medicare three months before their 65th birthday. Unless you are receiving Social Security benefits, enrollment is not automatic, and you will not receive a notice to enroll. You must reach out to Social Security by phone, online, or in person to enroll during your Initial Enrollment Period. Not enrolling in a timely manner can lead to gaps in coverage and late enrollment penalties for life.

Medicare consists of Part A, which is hospital insurance and for most people is premium-free. Part B is Medical Insurance and covers labs, imaging, and outpatient doctor visits. Part B has a premium that is set by Congress, which is $148.50 in 2021. Part D is a drug plan subject to a premium. Part C is Medicare Advantage, which is a private insurance alternative to Original Medicare.

Seniors who are self-employed, have coverage in the individual market, or work for an employer with fewer than 20 employees should sign up for all parts of Medicare before their 65th birthday. If you are working for a group employer with more than 20 employees, it pays to compare the costs and benefits of your current employer plan with that of Medicare. SHIP counselors (shiptacenter.org) are available in every county to help seniors enroll in Medicare and answer any enrollment questions.

Medicare covers limited short-term skilled nursing care only and does not pay for care for those who need to be in a nursing home for chronic conditions. It also does not cover custodial care in the home to help with activities of dai- ly living. Long-term care is covered by long-term care insurance, private pay, or by Medicaid. Medicaid is a joint federal and state healthcare program for low-in- come adults, elderly adults, children, and people with disabilities. In many cases, a couple needs to spend down assets to qualify for Medicaid or advance planning is required.

Estate Planning

Many seniors have already written wills and estate plans, and many of these need to be updated. For example, chil- dren may have left the house, and there is no longer a need to set up a trust for life insurance proceeds. The need for life insurance may also have dwindled due to dependents leaving the house, and the increase of retirement assets.

It is important to review the estate planning documents with an attorney and make sure they are up to date and still reflect your wishes. Proper planning will leave your loved ones with a roadmap to deal with difficult decisions and avoid federal and state tax consequences.

A will transfers assets after death according to your wishes. You also need to appoint a Personal Representative to execute the will. Wills are filed with the probate court. Orthodox clients will also want to complete a Halachic Will to comply with the Torah’s laws of inheritance.

A Living Will communicates your treatment wishes should you be unable to make healthcare decisions for yourself. A Healthcare Power of Attorney will appoint an agent to make healthcare decisions for you in cases of incapacity. Orthodox clients may also want to add a rabbi to consult to ascertain the halacha in cases of doubt.

A financial power of attorney ap- points an agent to make decisions for you should you become permanently or temporarily incapacitated. In most cases it makes sense to have these documents go into effect immediately and not upon disability to ensure they can be used most effectively.

A trust is a legal entity to hold, safe- guard, distribute, and control assets. Trusts can avoid or reduce taxes, remove assets from the estate, or set aside money for minors or a charity.

Taxes are the final matter to consider. Estates lower than $11.7 million for individuals are exempt from federal estate tax through 2025. In 2026, the exemption will revert to $5.5 million with an inflation adjustment. In Maryland, estates lower than $5 million are exempt from taxation, and married couples can shelter up to $10 million with proper planning.

In conclusion, given all of the myriad changes occurring as couples or individuals age, it is prudent to plan properly to ensure loved ones are taken care of and their wishes are carried out. Even those without significant assets should engage in the estate planning process.

Michael R. Goldstein, Esq. advises clients on wills, estate planning, and non-profit entity matters in Pikesville, MD. He has a background in insurance and financial planning. He is actively involved in his synagogue and serves on the boards of Jewish Community Services (advisory) and the University of Baltimore School of Law (alumni). Please contact us for a free initial consultation.