Stretching & Protecting Wealth

Author

Bellomo & Associates

For more information about the author, click to view their website: Bellomo & Associates

Posted on

May 25, 2023

Book/Edition

Pennsylvania - South Central PA

Share This

My estate planning and elder law practice have given me insights into these topics that I never thought possible. I encounter questions on a daily basis in my practice, how can an individual get the most out of retirement and how do you stretch your money and protect your wealth for future generations?

I am an estate planning and elder law attorney who happens to have a Master's in Law and Taxation as well as a Certified Elder Law Attorney under the authorization of the Pennsylvania Supreme Court. However, more than any class or degree I have received, representing numerous families over the years and watching their decisions, and in some cases mistakes, has really provided me the most prevalent insight into these questions and their answers.

I firmly believe it is very important to work with a financial professional to assist you during your working or earning years, as well as heading into your retirement years. Although it is possible for some people to “do it alone,” I’m a firm believer in hiring professionals to provide assistance in their area of expertise.

The small fee you will pay will be far worth it in the long run versus what you would save in the short term. Having a financial professional and a plan for retirement, not only how to get there, but also how you will live during retirement — is imperative. Stretching your money during retirement is similar to when you were saving for retirement, being disciplined, and having a goal in mind.

The one piece that no one ever wants to talk about is the cost of long-term care and how we’re going to pay for it. Although none of us really want to receive long-term care in our home or in a nursing facility, statistically it is a likely possibility that we need to consider.

Long-term care in a nursing home will cost anywhere from 10,000 to $12,000 a month. And in-home care, depending on the amount of care that is being received, can cost anywhere from $17,000 to $20,000 a month. This care is often necessary and needed but if there isn’t a plan in place, it can devastate a family pretty quickly and wipe out all of their savings.

The most obvious way to pay for long-term care is to simply self-insure, and make certain you have enough assets or investments to cover the cost. I find this to be a very difficult proposition, not only because it is impossible to know ahead of time how much care you are going to need, but also because the cost of the care in the future is very unpredictable. I remember at the beginning of my career the cost of a nursing home was around $5,000 a month, and now it is well over $10,000 and in some cases in our area $12,000.

I honestly don’t think it is out of the realm to predict the cost will more than double in a short period of time. But for the people who were planning to self-insure, it was certainly a shock to them when they finally got to the point of needing it and learning that we were closer to $12,000 a month. Although this can be possible for wealthy individuals, it is not typically possible for the middle class, since they cannot accumulate enough wealth to absorb $12,000 a month in costs. The other thing to remember is that often times one spouse is the caregiver for another spouse, and when the good spouse ends up needing care himself or herself, both spouses end up in the nursing home to the tune of $25,000 a month. It would be very difficult to self-insure this kind of need.

Another option is long-term care insurance. I am not licensed to sell insurance and have done numerous blogs on the topic of long-term care insurance. I am a big fan in general of insurance because I love that it could keep an individual in their own home for as long as possible. If you are looking at long-term care insurance policies, I would definitely look at a rider that will pay for in-home care.

Pennsylvania has products that are hybrid policies which are life insurance policies, as well as riders that provide in-home care or nursing care. Pennsylvania also participates in the partnership plan, which will allow an individual who has a long-term care policy to exempt a number of assets equal to the amount of benefit that they have received. I am a big fan of both of these and if an individual is able to afford it, I believe it is absolutely a good investment. You certainly want to talk to an agent to determine if it is something that is possible for you and your loved one, as well as whether it is financially doable.

In many cases, self-insuring or long-term care insurance is not an option, for a myriad of reasons, but often times we are stuck in a situation where a spouse does not have any way to pay for the long-term care, and they are reliant upon the crisis rules. Currently, in the state of Pennsylvania, the crisis rules are very favorable and will allow us to protect 100% of the assets of the spouse in the community. If you are interested in learning more about Medicaid crisis planning, please call our office at 717-844-9218, or click the link here to RSVP to our upcoming workshop to learn more about it.

Other Articles You May Like

The Risks Of An Adult Child Getting An Advance On Their Inheritance

As we grow older, our desire to support our children often intensifies. A trend that is becoming more prevalent is parents choosing to give their adult children an advance on their inheritance while they are still alive. Essentially, this means gifting a sum of money to the child during the parents lifetime and including in their estate planning documents that if the gift is not repaid, it will be considered an advance, affecting the childs share of the estate. While there are several concerns I have with this approach, two major ones stand out: the potential impact on Medicaid eligibility due to the gift being considered, and the risk of unequal distribution of assets among the children. One significant issue arises if the parent requires long-term care. Medicaid, the government program that assists with long-term care costs, imposes a five-year look-back period to assess any gifts made during that time. If a gift is identified, a penalty is calculated, which could prevent the person from qualifying for Medicaid until the penalty period is served. Providing an advance during your lifetime is indeed considered a gift and may significantly affect your eligibility for long-term care assistance. Additionally, we cannot predict the financial demands that may arise toward the end of our lives, especially when it comes to potential long-term care needs. Giving away money during your lifetime with the expectation that everything will be equalized may be risky, as theres no guarantee of how much money will be left in your estate. For instance, if an advance of $300,000 is given to one child, deemed an advance, and after paying debts, funeral expenses, and legal bills, there is insufficient remaining to reimburse the other children, an unfair situation arises. As a general rule, we advise against providing advances during your lifetime. While there may be specific exceptions based on individual circumstances, seeking counsel before making such decisions is crucial. Without professional guidance, we do not recommend this course of action. Join our free educational workshop to delve deeper into estate planning and inheritance strategies. By attending, youll gain valuable insights to make informed decisions about your assets and your familys future. Reserve your spot now!  

My Spouse Has Been Diagnosed with Dementia. Are We Going To Lose Everything?

Has your spouse been diagnosed with dementia? You may wonder if you're at risk of losing everything, but the short answer is no. However, it's crucial to take the time to gather resources and learn about the diagnosis. Seek advice from healthcare professionals, organizations like the Alzheimer's Association, and other experts who can provide guidance. Once you feel comfortable with this information, it's wise to consult an elder law attorney to understand asset protection and the differences between care in assisted living facilities and long-term care facilities, as this can significantly impact how you'll pay for care. Planning for dementia can be challenging due to the variable progression of the disease. Some individuals may experience a slow decline while others deteriorate rapidly, and in certain cases, the journey could span 15 to 20 years or even longer. It's essential to seek advice early and regularly, allowing you to create a comprehensive plan and maintain a sense of control over the situation. In our office, our elder care coordinator, Meg Motter, assists families in developing a life care plan. This plan provides detailed instructions from start to finish and is continually adjusted as needed. It serves as a lifeline, empowering our clients' families to feel in control of the situation rather than being controlled by it.Considering the high costs of care, it's essential not to leave things to chance. Take action now and consult an estate planning and elder law attorney if you find yourself in this situation.To further support and equip you with valuable information, we invite you to register for our free educational workshop. Join us and gain valuable insights into dealing with dementia and securing your family's future. Don't miss out on this opportunity secure your spot today!

Moving Out of State?

Are you planning to move out of state? Bellomo & Associates, an estate planning and elder law firm based in York and Lancaster, Pennsylvania, is here to assist you. Our services cover everything from basic estate planning documents to asset protection and more. One common question we often receive is about the validity of documents when moving to a new state. Generally, if your documents were valid in the state where they were created, they should also hold validity in your new state. However, its crucial to remember that a confused mind may lead to complications. In many cases, it makes sense to consider redoing your documents according to your new states rules and regulations. Each state has its own specific requirements for documents like Powers of Attorney. If your new state has stricter or different requirements, you may encounter difficulties in having institutions accept your documents. While you may eventually prevail, it could be a hassle and time-consuming process. Let me share an example we experienced in the Commonwealth of Pennsylvania. A client moved from Arizona with documents deemed valid in Arizona at the time of creation. Despite having an affidavit from an Arizona attorney, we faced considerable difficulties in Lancaster County when attempting to accept the Will for probate. To avoid potential confusion and refusals to accept your documents, we strongly recommend updating your documents if you have the capacity to do so after moving. Although this might not be the technical rule, its a safer option for you and your family. Take the necessary steps to ensure your documents comply with your new states regulations. To learn more about estate planning and how to protect your assets, we invite you to join our free educational workshop. Register now and secure your spot!

Local Services By This Author

Bellomo & Associates

Estate Planning 3198 E Market St, York, Pennsylvania, 17402

We Educate so what happened to the Bellomo Family doesn't happen to yours!Our firms mission is to ensure that you and your family never needlessly, painfully suffer. Every team member has a personal story that has brought us here to advocate for you and your family. We want to replace your burden with peace of mind. We have the answers, but more important, we have your back.Bellomo & Associates, LLC advises Individuals and families, business owners, senior citizens, and their families about the estate planning and elder law challenges facing them today. For seniors and their families facing the issues of aging, or for those of any age who wish to protect their familys financial future, we counsel clients and provide solutions on Asset Protection; Specials Needs Trusts; Wills; Trust Design; Medicaid; Estate Planning; Nursing Home Matters; and Estate Administration. For our clients who own businesses, our team assists them with succession planning for their business in conjunction with their estate planning.  We have office locations in York, PA, and Lancaster, PA.We offer FREE workshops!  Our workshops are fun and entertaining ways to learn! We provide you with the information to decide what is right for you. If after attending, you decide we arent the right fit no problem! Youll never feel any pressure from our team.