Financial planning for the elderly is like a minefield to navigate. Elders have a list of choices, involving their needs and wants, that may seem difficult to maneuver through. Often, an aging person wants to remain independent, but needs assistance with health care. Often, he wants to set aside money for his heirs in his will, but needs to save for the potential of long-term institutional care. He may need to apply a reverse mortgage to him home to pay medical bills or just support a retired lifestyle, but wants to keep the home debt-free to transfer the property to younger family members.
Financial planning for elders is thus tricky, and elderly law varies from state to state. Sometimes, a transfer of assets, money or property, disqualifies a person for several years from receiving Medicare or Medicaid. Sometimes it disqualifies the elder from being admitted into a long-term care facility. Proper planning can allow gift-giving and transfers of assets to happen, without running to a brick wall of time restrictions when health assistance is needed.
But financial planning for such gift-giving must allow for enough years to pass, so there is no restriction on government health assistance, or admittance into a long-term care facility, when it is needed. Despite the most carefully laid plans, sometimes an elder’s health fails earlier than anticipated, and changes might need to be made.
Elderly law attorneys usually take care to respect the elder’s wishes, and see what the law in their state permits from there. Legislation often changes, to researching elderly law in your state or checking with an attorney is vital before you, or your aging family member, make a decision that has a long-term effect on the elder’s ability to care for himself, remain independent, gift-give as he wishes, or transfer property as he sees fit.
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Some financial benefits to an elderly person include the reverse mortgage. If a senior citizen has lived in his home long enough for the equity to fund a day-to-day lifestyle, and to foot the medical bills, he may choose the reverse mortgage rather than keep his home as a debt-free property to transfer to an heir later. A reverse mortgage can keep an elder in his home, comfortably, thus avoiding the need for institutional care. Often, this is a deep desire of both an elder and the rest of his family.
Home equity loans can also accomplish these same ends. It’s a bit of a payout from the elder’s point of view – they are now able to use the money that they spent years putting into the home. If in-home care is needed to keep an elder safe, healthy, and cares for, a home equity loan can help pay for such private care.
Usually, this money is not sufficient to pay a round-the-clock caregiver, should one become necessarily. The money from a reverse mortgage or a home equity loan is not considered income, and a lump sum is not treated as an asset. This money cannot count against the elder when and if the day comes when he wants to be eligible for an institutional facility, or for a government-subsidized health insurance program like Medicaid.
Financial planning within elderly law also consists of drawing up wills and living trusts, deciding conservatorship and powers of attorney, and helping transfer and protect monetary gifts.
Adam J. Roa handles manners dealing with elderly estates, as well as finances. Adam is available as a Maryland elder law lawyer for any cases in which the caregiver has or is planning to take advantage or the caregiver to elder relationship. If you suspect any fail play in any of these areas please contact Mr. Roa or you local attorney at law.