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Long Term Care & End of Life Considerations

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How many times have you heard it, BUY LONG TERM CARE INSURANCE... O.K., that's the easy message. But there's much more to getting old and while long-term-care insurance and medicare supplement plans should be a part of every senior citizens estate planning issues, there are many other factors to be considered, factors such as incompetency and end of life issues that are tough to talk about. It's an unfortunate fact of life but in most cases, children just don’t speak to their parents about estate planning and long term care or end of life issues because they are afraid. Many children would rather irrationally believe that nothing can or will happen to their parents until they pass away at age 95 with a smile on their face after a good night’s sleep, than speak with them about how they really feel and what they really want if they become disabled or unable to make their own decisions.

Many adult children fear internal family conflicts, emotional distress and arguments among siblings when the topic of disease, disability, incompetency and the death of a parent is broached. Worse still ,a few unfortunates with looser family ties are frightened to bring up the topic "less they get stuck" as the unfortunate, stay-at-home caregiver for their ageing parents. With everybody leading busy lives and wrapped up in their own daily grind, it's also truly unfortunate that most conversations in this regard, if at all, are usually held at family gatherings and holidays, which is exactly the WRONG time to discuss such issues!

Of course, issue avoidance equals conflict avoidance, which while making the relationships run a lot smoother among family members, merely delays the inevitable, sometimes until it’s too late. And for those children who do step up to the plate and care for their ageing parents, the fear of examination and reflective criticism by other siblings regarding the level of care afforded is also a problem. It’s extraordinarily difficult to make decisions impacting a parent’s independence and mobility while other “non-involved” siblings hover, freely passing judgment on your efforts while they do nothing to contribute. I've witnessed the fracturing of sibling relationships as they squabble about standards of care and the squandering of "my" inheritance on luxury care facilities for parents with Alzheimer's... how quickly they forget whose money it is when they see a sibling put in charge of their parents affairs. Most of all though, children are scared of becoming the victim of that famous vehicle bumper sticker quotes: "I want to live long enough to be a burden to my kids" and... "I'm spending my kid's inheritance".

Children though, are not the only ones with fears. Parents too, have their own "angst" to deal with: The greatest fear for any parent who has raised a child and seen them fly the coop and become independent and strong, is probably their eventual loss of control… whether their mind, bodily functions, or their finances. Parents are fearful that any sign of weakness will mean a loss of their independence and control over their own lives and more interference in their affairs by their children. Some parents deal with the increasing frustrations of dealing with a young mind in an old, tired and worn out body that just won't do the things the mind wants it to. Other parents deal with the frustration of calcification or worse still, the onset of Alzheimer's and the full knowledge that there is no cure and that they will eventually be unable to live at home or with the ones they love and need the most as they slip into their own isolation.

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For a well heeled family, laying their finances bare before the children can and often does expose them to exploitation, not only in rare cases by their relatives but more often by disreputable financial service professionals and insurance agents. Unfortunately, this fear of allowing their children in to understand their finances is often the very reason seniors are cheated in the first place. If well educated and caring children became more involved in the parents finances and attended meetings to observe the emotions-based sales pitches of many disreputable salespeople, much of the fraud in our industry would evaporate. Unscrupulous people rely on the elderly being "dumb enough" to pretend they are still at the top of their game. In fact, at one particular "three day designation" seminar for insurance salesmen who market to seniors, the lecturer tells the class to treat their seniors "like intelligent 12 year olds", scare them out of their pants with wild statistics and then offer them a carrot, which they'll invariably bite. As a rule, for elderly clients over 75 years of age, I generally request (unless I conclude the parents are as sharp as the sharpest knives in the drawer) that at least one of their children or a disinterested third-party professional such as the lawyer be in attendance at every meeting I have with them. It provides the child or professional with the opportunity to observe the planning process and later reflect with the client about the topics discussed. This does two things, it either reinforces the information I've discussed with the client and raises the comfort level of the child that their parents really are still at the top of their game, or, makes the child or professional aware of cognitive issues that are developing, which may develop into a custodial care situation down the road for which proper planning is needed.

For the lesser heeled families, many parents are embarrassed and feel they have somehow failed themselves and their children because their retirement funds are inadequate to their future needs or to fund a potential long-term-care situation. They are loath to discuss such matters because it forces them to admit what they perceive as their own failings and they feel like any discussion may be misinterpreted as either a cry for help or a request for a hand out. Some just shrug their shoulders and remark, I know it’s not enough and when it’s gone it’s gone.

Many seniors fear their own mortality and in that respect, I’m guilty as charged. I avoided creating my estate plan until I needed a sinus operation in 2001 because I was sure I’d die some horrible death from an allergic reaction to the anesthetic. Such thoughts are irrational but difficult to overcome.

Kids, here's how to overcome some of those fears your parents may be experiencing... By far the easiest approach for children is to initially engage in financial planning yourself. Perform extensive due diligence, hire a “fiduciary” financial planning firm such as ours, meet with a lawyer and have a simple estate plan prepared for yourself. This will not only secure your future but more importantly, help you understand the process and what may eventually become your role in assisting your parents later in life. In understanding your duties, responsibilities and obligations as a fiduciary to your own estate plan and by putting into place successor trustees and powers of attorney, you'll begin to understand these same obligations to your parent’s estate if called upon to act in their best interest.

Before hiring a financial professional check any State and federal regulatory or licensing authorities for complaints and disciplinary history. This task can be daunting for even younger folks unfamiliar with these waters. People lie about themselves and their expertise and the more money that’s involved, the more some folks lie. Ignore private organizations like the Better Business Bureau. I found a licensed professional who had lied on his BBB application claiming his date of birth as the date of establishment of his business to bump his rating.(A+ at the time, now D-) Of course, he also neglected to mention the three judgments against his firm before he changed the name to wipe the slate clean (Yes, it's often that simple) The Internet, however, is most helpful in this regard and the judgments and other disciplinary history turned up with a simple Google search.

Once you've hired your own professional and completed the process for yourself, share your experiences and insights as well as your new found peace of mind with your parents and this may well throw the door to discourse wide open. However, do not discuss such matters on birthdays, Christmas or Thanksgiving or any gathering that is being held for a different reason!

If you’re still finding it impossible to approach the subject, or your parents duck and cover each time the subject is addressed, give them a Christmas or birthday gift Certificate for an hour of time with a lawyer or fee-for-service financial planner and prepay the professional in advance. It may be just the kick start they need. Always consider... MAYBE they just don’t want to discuss things with you!

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As we get older, we often slowly regress and children burdened down with their own lives and families quickly forget who it was.. who changed their diapers and wiped the tears from their eyes for years, tending to lose patience more quickly! Getting a professional involved who has expertise in long-term-care and end of life planning puts distance between you and the topic you may feel uncomfortable discussing and provides a buffer for those strong emotions you are absolutely going to feel.

What to discuss when the time is right?: Let me preface the following advice with; "bear in mind it is a discussion, not an interrogation!" Tell them about your estate plan and ask them if they’ve taken that important step already. Ask about the adequacy of their retirement funds based on their current and projected lifestyle. Remind them how easy it was to project what was needed as you went through the process and ask them if they’d feel comfortable talking to a financial planner to find out where they stand. If they already have, check the planner’s credentials, particularly those advertising an “expertise” in senior citizen planning. Most of these “designations” are specious one or two day seminars and of no value, other than to teach annuity selling techniques while overcoming an elderly prospect’s objections in order to close sales. Additionally, many insurance agents offer "living trust" packages to seniors in order to gain their confidence. These are illegal trusts often prepared by non-attorneys out of state and they don't work because they contain language not permitted under State law, or they simply are not funded with the parents assets and the estate goes to Probate anyway. Many insurance agents utilize the free lunch or dinner seminars to talk about living trusts, whereby the true motivation is to sell an illegal trust mill living trust first, then follow up by placing all the parents funds in an annuity of some kind, with up to 14 years of surrender penalties. Ask whether your parents ever met the lawyer who drafted their trust and check that he's licensed in your State by the Bar Association. You can search a name on-line in most States. No contact with the lawyer is a very BAD sign. Call us at 310. 260. 1126, we can help investigate these kinds of illegal acts and get things fixed.

Ask your parents if they feel comfortable in their neighborhood and whether it is where they can see themselves retiring. Take time to drive around and investigate whether they are close to important amenities and realize that if the nearest store or senior center is 5 miles away, an aging senior may become housebound and dependent on the child for even the most basic of needs, (shopping, doctor visits, pharmacy runs, etc.) once they no longer feel comfortable driving. For those with limited means, a move into the suburbs, the country or to a retirement community can mean better senior care and services, a more senior friendly community and a better standard of living on a lower budget… as well as a peaceful weekend place for the grandchildren to visit!

Ask who should step in and make medical and business decisions if either of parent becomes disabled? Sometimes, awkward questions about children regarding their financial stability and competency to manage the affairs of the parents are better asked by the planner or lawyer. At the very least, have them work with their planner to make a list of assets and where important documents are located and make sure the responsible parties get copies. There’s nothing like a scavenger hunt for wills, trusts, property deeds, insurance policies, bank account numbers and savings books in the middle of a family crisis to ruin one’s day.

Ask them whether their doctor is comfortable treating elderly patients or whether a change to a Gerontologist would be appropriate. Share with them how your recently executed powers of attorney help you sleep at night because you know that no matter what, your affairs are in order. Most people have strong feelings about end-of-life issues. In some cases, parents are happy to discuss how much care is too much, and whether they want to consider the gift of life through organ donation with their children. In other cases, they may rather speak to someone not as emotionally attached because they understand how upsetting it is. They are old enough to have lost their parents already and remember the trauma. Also discuss any funeral or cremation services that have been arranged or paid for in advance. It was tough for me to receive a letter from my mother just recently with a little pre-paid burial insurance card in it, that includes a phone number in England etc. etc.. My brother will be making the arrangements and he received his copy also, which upset him, but it's a great relief in some ways for us to know that this is what Mom wants and that we only need to follow her wishes to get things accomplished.

A few other tips… let them know that you are willing to be involved as they make financial, estate, long-term care and end-of-life decisions but remember who’s in charge. If parents decide on an uneven distribution of wealth, for example if one child sacrifices their time and money to care for the parents while the others just wait for their inheritance, make sure the thought process behind such decisions are documented to prevent nasty infighting down the road.

If a financially stable sibling is too lazy to get involved, hit their greed button. Let them know that unless they help, the likelihood is there won’t be anything left to inherit. In larger estates, I often advise the parents of lazy children who are just waiting for an inheritance to create “incentive trusts” which delay distributions and only distribute an amount equal to the earnings of the child annually to them. In this case, greed is good in both cases.

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Finally, hire someone who acts in a fiduciary capacity like our firm to discuss your asset mix and tolerance to risk if there is any indication that you may need to financially support your parents down the road. This may be the case if your parents have not considered purchasing long-term-care insurance to cover their needs and no longer qualify. If they are healthy but living on a fixed income and you have the means, discuss perhaps something simple, like paying the annual premiums on a Medicare supplement and long term care policy for your parents. Providing your parents are healthy now the expense would be manageable if shared among siblings and could mean predictable expenses and financial stability for you as well as greater peace of mind for them in the event long-term-care is needed. It could save the house and your parent’s assets from liquidation and end up being a really cheap “inheritance” policy.

In recent years, many innovative policies have been introduced to compete with traditional long term care products. Some of these include life insurance and / or annuities with a long term care feature that protect seniors from financial ruin if they need the coverage, but at the same time, could refund the premiums and a whole lot more if the policy is never used. By taking over payments on some of these newer and more innovative products, you could be saving both your parents and yourself from financial ruin. Please call me personally at 310. 260. 1126 to learn more about these innovative long term care solutions or with any other estate or elder care issues you may have.

Nigel B Taylor
CA Insurance License Number 0716446

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Disclosures: Taylor & Associates (TA) is a CA Registered Investment Adviser regulated by the CA Dept. of Business Oversight. Insurance Planning Services offered separately and distinctly by Nigel B Taylor under individual CA insurance license number 0716446.

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