Alzheimer’s disease is somewhat misunderstood by the general public. We all know that it exists, but there are aspects of it that are surprising to many people, and we will explain them here.
Widespread Impact
You may assume that the disease strikes a relatively small percentage of seniors, but in fact, the numbers are alarmingly high. About 32 percent of individuals that are 85 years of age and older have contracted the disease. In all, there are over 6 million Americans with Alzheimer’s.
The senior population is growing due to the fact that the baby boomers are entering this phase of life, so experts expect more people to contract Alzheimer’s. They estimate that the numbers of people with Alzheimer’s will double by 2050.
People with Alzheimer’s disease eventually need help with their day-to-day needs, and family members and friends typically step up to the plate. There are over 11 million unpaid caregivers in the United States that are assisting people with dementia.
From an economic perspective, if these caregivers were getting paid, the price tag would be over $250 billion. In all, about $355 billion in expenses related to Alzheimer’s disease will be incurred in 2021.
Incapacity Planning
From a legal perspective, there are steps that you should take to prepare for the potential impact of Alzheimer’s disease or another type of dementia. Hopefully, there will be no need for the plan to be activated, but it is better to be safe than sorry.
If you will be using a revocable living trust as your estate plan centerpiece, you will act as the trustee while you are alive and well. To account for possible incapacity, you can name a disability trustee in the trust declaration.
For the management of property that is not held by a trust, you can execute a durable power of attorney for property. You can add a healthcare proxy to name someone to make medical decisions on your behalf.
Another advance directive for health care that should be included is a living will. This document is used to state your preferences regarding the use of life-support measures like feeding tubes, artificial hydration, resuscitation, and mechanical respiration.
Long-Term Care
Many people with Alzheimer’s disease require nursing home care at some point. In the New York City area, you can expect to pay over $170,000 for a year in a nursing home, and Medicare does not cover long-term care.
These costs can consume a significant chunk of your legacy, but there is a solution in the form of Medicaid. This jointly administered federal/state government health insurance program will pay for the custodial care that nursing homes provide.
Since it is a need-based program, you cannot qualify if you have significant assets in your name. To qualify for Medicaid to pay for nursing home care, you could establish and fund an irrevocable, income-only Medicaid trust.
As the name would indicate, you would not be able to dissolve the trust or act as the trustee. You would have the ability to receive distributions of income that is earned by the assets in the trust until you apply for Medicaid.
This sounds easy enough, but you cannot create the trust today, apply for Medicaid tomorrow, and be approved next week. There is a five-your look-back period, so the trust must be funded at least five years before you submit your application for Medicaid coverage.
If you violate this rule, your eligibility is delayed. For example, let’s say that the state determines that the average cost of nursing home care is $170,000 a year. You fund a trust with $340,000 two years before you apply for Medicaid.
This amount would pay for two years of nursing home care, so your eligibility would be delayed by two years. Clearly, this strategy can be effective, but advance planning is key.
Schedule a Consultation Today!
We are here to help if you are ready to work with a New York City elder law attorney to put a nursing home asset protection plan in place. You can send us a message to request a consultation appointment, and we can be reached by phone at 212-973-0100.
While he was in law school, he worked as an aide to the late John Sparkman, Senior Senator from Alabama. This gave him the opportunity to gain intimate knowledge of the workings of government, and this background has served him well.
He started his private practice in New York in 1974, the first Sikh to be admitted to the bar in the state of New York.And in 1995, when he narrowed his legal focus to the areas of estate planning and elder law, the prestigious American Academy of Estate Planning Attorneys accepted him into their membership.
Special needs planning is an important aspect of the field, and Mr. Khalsa has intertwined his empathy with his expertise to become a leading advocate in this area. Shortly after the Education for All Handicapped Children Act was enacted in 1975, he won the first case in New York that was adjudicated under this law.
S.J. Khalsa has a penchant for philanthropy, and he has raised well over $20 million for charities nationwide. He is a deeply spiritual man who represents the Sikh religion at religious and interfaith gatherings all over the globe.
He believes that successful professionals should contribute to the fabric of their communities, and to this end, he works with law enforcement in New York.
Mr. Khalsa is a graduate of the FBI Citizens Academy program, and he is active in their Alumni Association. He is a member of the FBI/New York Police Department Joint Task Forces on Civil Rights and Hate Crimes, and he sits on the Community Engagement Council that advises the FBI Assistant Director for New York.
He is the author of the highly acclaimed book, Estate Planning Essentials: A Guidebook for Modern Families. Lawyers of Distinction recognized him for his excellence in 2020, naming him a 2020 Power Lawyer, and he is a member of the prestigious American Academy of Estate Planning Attorneys.
Mr. Khalsa lives in Manhattan with his wife, and he has two grown children and four grandchildren. He likes to travel, and he is an avid golfer. As the co-owner of Kundalini Yoga East in New York along with his wife, he instructs practitioners and aspiring yoga teachers.
- NYC Nursing Home Cost Projection for 2031 - May 21, 2023
- Advanced Estate Planning: These Trusts Can Provide a Solution - May 19, 2023
- Testamentary Trust vs. Living Trust: What’s the Difference? - May 10, 2023
See Larger Map Get Directions