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Legal Gangsters: Netflix’s I Care a Lot Uncovers the Dark Side of Legal Guardianship – Part 2

The Netflix movie I Care a Lot provides a dark, violent, and somewhat comedic take on the real-life and not-at-all funny dangers of the legal (and sometimes corrupt) guardianship system. While the film’s twisting plot may seem far-fetched, it sheds light on a tragic phenomenon—the abuse of seniors at the hands of crooked “professional” guardians.

Last week in part one of this series, we offered a brief synopsis of the movie, which revolves around Marla Grayson, a crooked professional guardian who makes her living by preying on vulnerable seniors, and we then outlined the true events that inspired the fictional account. The film’s writer and director, J. Blakeson, came up with the idea after reading news stories of a similar scam involving a corrupt professional guardianship agency in Las Vegas.

In that case, a real-life Marla Grayson named April Parks, who owned a company called A Private Professional Guardian, was sentenced to up to 40 years in prison in 2018 after being indicted on more than 200 felonies for using her guardianship status to swindle more than 150 seniors out of their life savings. While I Care a Lot is fictional, the Parks case also inspired the 2018 documentary, The Guardians, directed by award-winning filmmaker Billie Mintz, and his film details the terrifying true events that ravaged the Nevada guardianship industry.

In a Facebook post, Mintz praises I Care a Lot as “a perfect introduction to guardianship,” but worries that because of the movie’s heavy focus on violence and Russian mobsters, “people won’t believe it’s real.” However, as Mintz points out, “I assure you that everything you see about guardianship is true.”

Indeed, while the Parks case is the most famous, similar cases of senior abuse by professional guardians are on the rise across the country. A 2010 report by the Government Accountability Office found hundreds of cases where guardians were involved in the abuse, exploitation, and neglect of seniors placed under their supervision. And given the country’s exploding elderly population and our overloaded court system, such abuse will almost certainly become more common.

Additionally, although most of the cases that have made the news have involved the elderly, the fact is, any adult could face court-ordered guardianship if they become incapacitated by illness or injury and haven’t put the proper legal protections in place.

To this end, here in part two, we’re going to explain how you can protect yourself and your loved ones from such abuse using proactive estate planning. 

 

How It Happens

Should you become incapacitated without any planning in place (due to illness or injury), your family (or a friend) would have to petition the court in order to be granted guardianship. In most cases, the court would appoint a family member as guardian, but this isn’t always the case. If you have no living family members, or those you do have are unwilling or unable to serve or deemed unsuitable by the court, a professional guardian would be appointed. 

Beyond the potential for abuse by professional guardians, if you become incapacitated and your family is forced into court seeking guardianship, they are likely to endure a costly, drawn-out, and emotionally taxing process. Not only can the legal fees and court costs drain your estate, but if your loved ones disagree over who is best suited to serve as your guardian, it could cause a bitter conflict that could tear your family apart and make it less likely that you get the kind of care you want.

In another scenario, should your loved ones disagree about who should be your guardian, the court could decide that naming a relative as your guardian would be too disruptive to your family dynamics and appoint a professional guardian instead. However, if you have the proper planning vehicles in place, it is highly unlikely for a guardian to be appointed against your wishes.

 

A Comprehensive Plan For Incapacity
Should you become incapacitated, a comprehensive incapacity plan would give the individual, or individuals, of your choice the immediate authority to make your medical, financial, and legal decisions, without the need for court intervention. Moreover, such planning allows you to provide clear guidance about your wishes, so there is no mistake about how these decisions should be made.

There are several planning vehicles that can go into a comprehensive plan for incapacity, but a will is not among them. A will only goes into effect upon your death, and then, it merely governs how your assets should be divided, so it would do nothing to protect you in the event of incapacity.

When it comes to creating your incapacity plan, your best bet is to put in place a number of different planning tools rather than a single document. To this end, your plan should include some or all of the following:

 

  • Durable financial power of attorney: This document grants an individual of your choice the immediate authority to make decisions related to the management of your financial and legal affairs.
  • Revocable living trust: A living trust immediately transfers control of all assets held by the trust to a person of your choice to be used for your benefit in the event of your incapacity. The trust can include legally binding instructions for how your care should be managed, and the document can even spell out specific conditions that must be met for you to be deemed incapacitated.
  • Medical power of attorney: A medical power of attorney grants an individual of your choice the immediate legal authority to make decisions about your medical treatment in the event of your incapacity.
  • Living will: A living will ((sometimes called an advance directive) provides specific guidance about how your medical decisions should be made during your incapacity, particularly at the end of life. In some instances, a medical power of attorney and a living will are combined in a single document.

But here is the thing about all of these documents—they are just documents and not guidance for the people you love. If you really want to keep your family and friends out of court and out of conflict, you cannot just rely on documents to do it. Rather, these documents should be created by a lawyer who will get to know you, your wishes, and be there for you throughout the many stages of life, plus be there for your family and friends if and when you can’t be.

 

Communication is Key

In addition to the above planning tools, it is equally—if not more—important for your loved ones to be aware of your plan and understand their role in it. As part of our planning process, we hold a family meeting with all of the individuals impacted by your plan where we walk them through your plan and explain the reasoning behind your decisions and what they need to do if something happens to you.

By combining your comprehensive incapacity plan with a team of people who care for you, can watch out for you, and know exactly what to do in the event tragedy strikes, we can make it virtually impossible for you to be abused by a professional guardian.

Don’t Put It Off
Although incapacity from dementia is most common in the elderly, debilitating injury and illness can strike at any point in life. Given this, all adults 18 and older should have an incapacity plan. Furthermore, planning for incapacity must take place well before any cognitive decline appears since you must be able to clearly express your wishes and consent for the documents to be valid.

In light of this, you should get your own planning handled first, and then discuss the need for planning with your aging parents as soon as possible, and from there, schedule a Family Wealth Planning Session with us to get a plan started. And if you or your senior loved ones already have an incapacity plan, we can review it to make sure it has been properly set up, maintained, and updated. Unfortunately, a plan put in place years ago is unlikely to work now, so updating is critical, and unfortunately often not overlooked.

Indeed, once you have a plan in place, make sure to regularly review and update it to keep pace with life changes, changes in your assets, or changes in your family structure. And if any of the individuals you have named become unable or unwilling to serve for whatever reason, you will need to revise your plan—and we can help with that too.

 

Retain Control of Your Life and Assets

To avoid the loss of autonomy, family conflict, and potential for abuse that comes with court-ordered guardianship, we invite you to meet with us as your Personal Family Lawyer®. While there is no way to prevent dementia and other forms of cognitive decline or an unexpected illness or injury, we can put planning tools in place to ensure that you at least have some control over how your life and assets will be managed if it ever does occur. Contact us today to schedule your appointment.

 

This article is a service of Stephanie Hon, Personal Family Lawyer®. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge. 

Legal Gangsters: Netflix’s I Care a Lot Uncovers the Dark Side of Legal Guardianship – Part 1

The Netflix movie I Care a Lot provides a dark, violent, and somewhat comedic take on the real-life and not-at-all funny dangers of the legal (and sometimes corrupt) guardianship system. While the film’s twisting plot may seem far-fetched, it sheds light on a tragic phenomenon—the abuse of seniors at the hands of crooked “professional” guardians.

In this two-part series, we’ll discuss how the movie depicts such abuse, how this can occur in real life, and what you can do to prevent something similar from happening to you or your loved ones using proactive estate planning and our Family Wealth Planning process. For support in putting airtight, protective planning vehicles in place, meet with us as your Personal Family Lawyer®.

Note: This article contains spoilers for the movie I Care a Lot.

At the beginning of the movie, we meet Marla Grayson, a crooked professional guardian who makes her living by preying on vulnerable seniors. A professional guardian is a person appointed by the court to make legal and financial decisions for senior “wards” of the court, who are deemed unable to make such decisions for themselves.

Working with a corrupt doctor, Marla targets wealthy victims and gets a judge to order these individuals unfit to care for themselves and then appoint her as their guardian. From there, she and her business partner/ girlfriend, Fran, move the seniors into a nursing home, seize their homes, and sell all of their assets for their own financial gain.

Marla’s scheme takes a turn for the worse when her latest senior victim, Jennifer Peterson, turns out to be the mother of a Russian mob boss named Roman Lunyov. After Marla has Jennifer placed in a long-term care facility, Roman tries unsuccessfully to get his mother out of the facility, first by bribing Marla, then through the court, and finally by trying to break her out. 

While this may seem ludicrous, this kind of abuse actually happens outside of the movies to seniors with significant assets, even those with caring adult children like Roman. 

At this point, the movie descends into a violent back-and-forth between Roman and Marla, as they each try and fail to kill one another until they both decide that rather than murdering each other, they could make more money by going into business together. 

Fast forward to several years later, we learn that Marla and Roman have become millionaires after starting a global chain of senior care services, called Grayson Guardianships, which employs thousands of crooked guardians overseeing hundreds of thousands of “clients” all over the world.

 

Based On True Events

With its over-the-top violence, kidnappings, and Russian mobsters, some might dismiss I Care a Lot as nothing but Hollywood hype and find it hard to believe that an operation as sinister as Marla’s could ever actually exist. But the fact is, the movie’s writer and director, J. Blakeson, came up with the idea after reading news stories about very similar (less the mob and murder) situations. And knowing such things actually happen makes the movie even more terrifying.

“The idea first came when I heard news stories about these predatory legal guardians who were exploiting this legal loophole and exploiting the vulnerability in the system to take advantage of older people, basically stripping them of their lives and assets to fill their own pockets,” Blakeson told Esquire Magazine. “They run through their money as fast as possible, store them in the worst care home, and just forget about them. Just park them and then move on to the next one, and that felt almost like a gangster’s operation.”

And while the real-life scams never reached a level on par with Grayson’s Guardians, one crooked professional guardianship business in Las Vegas did manage to bilk hundreds of unsuspecting seniors out of their life savings. As we detailed in our previous article, Use Estate Planning to Avoid Adult Guardianship—and Elder Abuse, a real-life Marla Grayson named April Parks, who owned a Las Vegas-based company called A Private Professional Guardian, was sentenced to up to 40 years in prison in 2018 after being indicted on more than 200 felonies for using her guardianship status to swindle more than 150 seniors. 

In her case, prosecutors described how Parks, in a similar fashion as Marla, used a shady network of social workers and medical professionals who helped her track down her elderly victims. On the lookout for wealthy seniors with a history of health issues and few living relatives, Parks was often able to obtain court-sanctioned guardianship during court hearings that lasted less than two minutes.

From there, the guardians would force the elderly out of their homes and into assisted-living facilities and nursing homes. They would then sell off their homes and other assets, keeping the proceeds for themselves. Even worse, the guardians were often able to prevent the seniors from seeing or speaking with their family members, leaving them isolated and even more vulnerable to exploitation.

 

The Most Punitive Civil Penalty

What makes these cases particularly tragic is the fact that for the most part, everything these unscrupulous guardians did is perfectly legal. As Blakeson put it, “They had the law on their side, and there was nothing you could do.” Although guardianships are designed to protect the elderly from their own poor decisions, guardianship can turn out to be more of a punishment than a benefit. 

In a 2018 New York Times article detailing the state of the guardianship system in New York, Florida congressman Claude Pepper described guardianship as “the most punitive civil penalty that can be levied against an American citizen, with the exception, of course, of the death penalty.” 

Indeed, once you’ve been placed under court-ordered guardianship, you essentially lose all of your civil rights. Whether it’s a family member or a professional, the person named as your guardian has the complete legal authority to control every facet of your life. While guardianship is governed by state law and varies from state to state, some of the most common powers guardians are granted include the following:

  • Determining where you live, including moving you into a nursing home
  • Complete control over your finances, real estate, and other assets
  • Making all of your healthcare decisions and providing consent for medical treatments
  • Placing restrictions on your communications and interactions with others, including family members
  • Making decisions about your daily life such as recreational activities, clothing, and food choices
  • Making end-of-life and other palliative-care decisions 

Additionally, though it’s possible for guardianship to be terminated by the court if it can be proven that the need for guardianship no longer exists, a study by the American Bar Association (ABA) found that such attempts typically failAnd those family members who do try to fight against court-appointed guardians frequently end up paying hefty sums of money in attorney’s fees and court costs, with some even going bankrupt in the process.


Protection Through Planning

Given the potential for neglect, abuse, and exploitation that guardianship affords, it’s crucial that seniors and their families take the proper steps to prevent any and all possibility of falling prey to such scams. Moreover, because any adult could face court-ordered guardianship if they become incapacitated by illness or injury, it’s vital that every person over age 18—not just seniors—take proactive measures to prepare for potential incapacity.

Fortunately, there are multiple estate planning tools that can prevent such abuse from occurring. With us, as your Personal Family Lawyer®, we can put planning vehicles in place and offer ongoing advisory and support that would make it practically impossible for a legal guardian to ever be appointed—or need to be appointed—against your wishes.

Next week, we’ll continue with part two in this series on the dark side of adult guardianship and offer tips for how you can avoid the potential for abuse using estate planning.

 

This article is a service of Stephanie Hon, Personal Family Lawyer®. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge. 

Don’t Let Diminished Financial Capacity Put your Elder Loved Ones at Risk – Part 2

In the first part of this series, we discussed the early warning signs of diminished financial capacity in the elderly. Here, we’ll discuss planning strategies that can protect your loved ones from incapacity of all kinds.  

With more and more Baby Boomers reaching retirement age each year, our country is undergoing an unprecedented demographic transformation that’s sure to challenge our society in many ways. There’s been lots of talk about whether Baby Boomers will have enough savings for retirement and the strains the generation will put on Social Security and Medicare. 

But there’s another issue that’s getting far less attention—the coinciding increase in the prevalence of dementia.

Along with a swelling senior population, the nation is expected to see a corresponding rise in those suffering from age-related dementia—cases of Alzheimer’s alone are expected to double by 2050. While the cognitive decline from dementia affects nearly every mental function, many people aren’t aware that one of the first abilities to go is one’s “financial capacity.”

Financial capacity refers to the ability to manage money and make wise financial decisions. A decline in financial capacity not only makes seniors more likely to mismanage their money, but also makes them easy targets for financial exploitation, fraud, and abuse.Last week, we listed six warning signs of a decline in a financial capacity. Here we’ll discuss estate planning strategies that can help protect your elderly loved ones and their assets from the debilitating effects of dementia and other forms of incapacity. 

 

Reducing the Risks

Taking steps to reduce the risks of diminished financial capacity is vital, but stepping in to help manage an aging parent’s money without threatening their sense of independence and privacy can be a real challenge. Even if they’re aware of their own impairment, many are reluctant to ask for help, and some may even deny there’s a problem. 

Ideally, you should address the potential for dementia and other forms of incapacity with your senior family members well before any signs of cognitive decline appear. Waiting until they start showing signs of dementia will only exacerbate the complications and could even invalidate planning efforts. 

Start by having a heart-to-heart conversation with your loved ones about the risks involved with incapacity, and how estate planning can help protect them. Approach the subject with care and compassion. Reassure them that your goal is to make certain they retain as much control over their lives as possible—and talking about the issue early on is the best way to do that.

For example, you should let your aging parents know that if they become incapacitated without proper planning, you’ll have to go to court and petition to become their legal guardian. This process is not only quite costly and emotionally taxing but there’s a possibility that the court could appoint a professional guardian, rather than a loved one such as yourself.

A court-appointed guardianship would mean that a total stranger would control all of their affairs—financial and otherwise—which is something they likely wouldn’t want. Professional guardianships also open the door for potential exploitation and abuse by unscrupulous guardians, which is something that’s on the rise given the sharp uptick in the senior population.

However, unless you have the legal authority to make your parents’ financial decisions, your ability to manage their money will be seriously limited. You might be able to work together with them for a while without such authority, but at some point, their cognitive impairment will likely reach a stage where you’ll need to assume full control—and that’s where estate planning comes in. 

 

Put a Plan in Place

The best option would be for your aging loved ones to put in place a comprehensive plan for incapacity as soon as possible. This way, they can choose exactly who they want making their financial, medical, and legal decisions for them if and when they’re no longer able to do on their own. 

There are a number of planning tools that can be used in an incapacity plan, but a will alone is insufficient. A will only goes into effect upon death, so it would do nothing should your elderly parents become incapacitated by dementia. 

While a will is important in planning for death, your parents should also put in place planning tools specially designed for incapacity. One such tool is a durable financial power of attorney. This document would give you (or another person of their choosing) the immediate authority to make decisions related to the management of their financial and legal affairs in the event of their incapacity. 

The downside of financial durable power of attorney is that it sometimes is not accepted by banks and other financial institutions, and you might still end up needing to go to court to get control of your parents’ affairs. 

A revocable living trust is a MUCH better estate planning tool to transfer control of your parents’ financial assets to you without court intervention should they become incapacitated. A revocable living trust, created while your parents have the capacity, can plan for the transition of their assets to your care and control in a way that feels safe and secure to them. Bring your parents to meet with us for a Family Wealth Planning Session to learn more about how this would work. 

Yet having the legal authority to make your parents’ financial and legal decisions is just part of an overall incapacity plan. They’ll also need to put in place planning strategies designed to address their healthcare decisions and medical treatment like medical power of attorney and a living will.  

We can help your aging parents and other senior family members develop a comprehensive incapacity plan, customized with the specific planning vehicles to match their unique needs and life situation.

 

Don’t Wait Until it’s too Late

While incapacity from dementia is most common in the elderly, debilitating injury and illness can strike at any point in life. For this reason, all adults age 18 and older should have an incapacity plan. Moreover, such planning must be addressed well before cognitive decline begins, as you must be able to clearly express your wishes and consent for the documents to be valid. 

Given this urgency, you should discuss incapacity planning with your aging parents right away, and schedule a Family Wealth Planning Session with us to get a plan started. If your senior family members already have an incapacity plan, we can review it to make sure it’s been properly set up, maintained, and updated.

Of course, if you notice any signs of diminished financial capacity or other suspect behaviors, you should immediately contact your Personal Family Lawyer® to address the issue. While there’s no way to prevent age-related dementia and other forms of cognitive decline, make sure your parents and other senior relatives know that they can use estate planning to have control over how their lives and assets will be managed if it does occur.


This article is a service of Stephanie D. Hon, Personal Family Lawyer®. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session, ™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.

Don’t Let Diminished Financial Capacity Put Your Elderly Loved Ones At Risk – Pt 1

With more and more Baby Boomers reaching retirement age each year, our country is undergoing an unprecedented demographic transformation that’s been dubbed “The Greying of America.” This population shift stands to affect many aspects of life, especially your relationships with aging parents and other senior family members.

By 2060, the number of Americans aged 65 and older is projected to nearly double from 52 million in 2018 to 95 million, which will account for 24% of the total population. And as early as 2030, the number of those 65 and older is expected to surpass the number of children (those under age 18) for the first time in history.

Coinciding with the boom in the elderly population, the number of Americans suffering from Alzheimer’s and other forms of dementia is expected to increase substantially as well. The Centers for Disease Control (CDC) estimates that the number of Americans with Alzheimer’s disease will double by 2060 when it’s expected to reach 14 million—more than 3% of the total population. 

 

A Decline in Financial Capacity

Although Alzheimer’s is the most common cause of dementia in older adults, it’s not the only one. In fact, the National Institute on Aging estimates that nearly half of all Americans will develop some form of dementia in their lifetime. And while the cognitive decline brought on by dementia affects a broad array of mental functions, many people aren’t aware that one of the first abilities to go is one’s “financial capacity.”   

Financial capacity refers to the ability to manage money and make wise financial decisions. Yet cognitive decline brought on by dementia often develops slowly over several years, so a diminished financial capacity frequently goes unnoticed—often until it’s too late. 

“Financial capacity is one of the first abilities to decline as cognitive impairment encroaches,” notes the AARP’s Public Policy Institute, “yet older people, their families, and others are frequently unaware that these deficits are developing.”  

Ironically, studies have also shown that the elderly’s confidence in their money management skills can actually increase as they get older, which puts them in a perilous position. As seniors begin to experience difficulty managing their money, they don’t realize they’re making poor choices, which makes them easy targets for financial exploitation, fraud, and abuse.

 

Watch For Red Flags

As you spend time with your aging parents and other senior relatives, this provides an ideal opportunity to be on the lookout for signs that your loved ones might be experiencing a decline in their financial capacity. The University of Alabama study “The Warning Signs of Diminished Financial Capacity in Older Adults” identified six red flags to watch for: 

1. Memory lapses: Examples include missing appointments, failing to make a payment—or making multiples of the same payment—forgetting to bring documents or where documents are located, repeatedly giving the same orders, repeatedly asking the same questions.

2. Disorganization: Mismanaging financial documents, and losing or misplacing bills, statements, or other records.

3. Declining checkbook management skills: Forgetting to record transactions in the register, incorrectly or incompletely filling out register entries, and incorrectly filling out the payee or amount on a check.

4. Mathematical mistakes: A declining ability to do basic oral or written math computations, such as making changes.

5. Confusion: Difficulty understanding basic financial concepts like mortgages, loans, or interest payments, which were previously well-understood.

6. Poor financial judgment: A new-found interest in get-rich-quick schemes or radical changes in investment strategy.

 

Managing Diminished Financial Capacity

If you notice your parents or other senior family members displaying any of these behaviors, you should take steps to protect them from their own poor judgment. It’s vital to address their cognitive decline as early as possible, not only to prevent financial mismanagement and exploitation but also to ensure their overall health and safety.

There are several estate planning tools that can be put in place to help your aging parents and other senior family members protect themselves and their assets from the debilitating effects of dementia and other forms of incapacity. In part two of this series, we’ll discuss the specific planning tools available for this purpose, and provide some guidance on how to address this sensitive subject with your elderly loved ones.  

Next week, we’ll continue with part two in this series on protecting your elderly loved ones from diminished financial capacity. 

As your Personal Family Lawyer®, we can guide you to make informed, educated, and empowered choices to protect yourself and the ones you love most. Contact us today to get started with a Family Wealth Planning Session.

This article is a service of Stephanie D. Hon, Personal Family Lawyer®. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session, ™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.

 

 

What You Should Know About Long-Term Care Insurance

With people living longer than ever before, more and more seniors require long-term healthcare services in nursing homes and assisted living facilities. However, such care is extremely expensive, especially when it’s needed for extended periods of time.

Traditional healthcare insurance doesn’t cover such services, and although Medicare does pay for some long-term care, it’s quite limited, difficult to qualify for, and requires you to deplete nearly all of our assets before being eligible (or do proactive planning to shield your assets, which we can support you with). To address this gap in coverage, long-term care insurance was created. 

Intensive Care

First introduced as “nursing home insurance” in the 1980s, long-term care insurance is designed to cover expenses associated with long-term skilled nursing services delivered in a nursing home, assisted living facility, or other senior care settings, though some of today’s policies cover care delivered in your own home as well.

Such intensive care is required when you are no longer able to care for yourself, often at the end of your life. These policies cover the cost of skilled nursing services that support you with basic self-care tasks, such as bathing, feeding, and using the bathroom. 

These are known as activities of daily living (ADLs) and generally include:

  • Ambulating (walking or getting around)
  • Feeding
  • Bathing
  • Dressing and grooming
  • Using the toilet
  • Continence management
  • Getting in and out of bed or a chair

Before your coverage kicks in, most policies require that you demonstrate you have lost the ability to engage in at least two or three ADLs. Most policies also have a deductible, or elimination period, which is a set number of days that must elapse between the time you become disabled (eligible for benefits) and the time your coverage kicks in. 

Many policies offer a 90-day elimination period, but others can be longer, shorter, or even have no elimination period at all. Of course, the shorter the elimination period, the more expensive the premium.

Additionally, long-term care policies typically come with a predetermined benefit period, which is the number of years of care it will pay for. A benefit period of three to five years, for example, is a quite common duration for such policies. Most policies also come with a cap on the dollar amount of coverage that will be paid for care on a daily basis, known as a daily benefit amount.

Getting Covered

Obviously, the younger and healthier you are when you buy the policy, the cheaper the premiums will be, so the sooner you invest in coverage, the better. In fact, most policies exclude certain pre-existing conditions, so if you wait until you become ill, it can be impossible to find coverage.

For example, if you have any of the following conditions, it generally disqualifies you from obtaining coverage:

  • You already need help with ADLs
  • You have AIDS or AIDS-Related Complex (ARC)
  • You have Alzheimer’s Disease or any form of dementia or cognitive dysfunction
  • You have a neurological disease, such as multiple sclerosis or Parkinson’s Disease
  • You had a stroke within the past year to two years or have a history of strokes
  • You have metastatic cancer
  • You have kidney failure

Increasing Premiums, Decreasing Benefits
With the elderly population booming, there has been a surge in demand for long-term care services, which has led to a marked increase in the cost of such policies. At the same time, many insurers have been cutting back on the benefits their policies offer.  

Given this, other types of hybrid policies are springing up. One increasingly popular type of hybrid policy combines long-term care insurance with life insurance. With this type of policy, if you don’t use the long-term care benefits, the policy pays a death benefit to your family when you pass away.

If you are looking to purchase long-term care insurance, you should speak with multiple insurance providers and compare their benefits, care options, and premiums. Different companies may offer the same coverage and benefits, but they can vary dramatically in price. Always ask about the insurance company’s history of rate increases, including the amount of the most recent increase.

Choose Wisely

For the best chances of success when shopping for a policy, get help from a fee-only planner, who is not compensated based on your choice of coverage. Or, if you are working with a commissioned agent, meet with a lawyer like us with experience in elder law, who can review the policy terms to ensure it’s a good fit for you before you sign on the dotted line. 

When meeting with an insurance provider, you must get answers to the following three questions about your policy:

  1. How long is the elimination period before the policy begins paying benefits? 
  2. What capacities, or ADLs, must you lose before coverage kicks in? 
  3. How many years of care are covered?

Buying long-term care insurance should be a family affair because you are going to need your family members to advocate for you and file a claim for the policy when you need to use it. Given this, make sure your family knows what kind of policy you have, who your agent is, and how to make a claim.

What’s more, you should pre-authorize the right person to speak to the insurance company on your behalf, and not just rely on a power of attorney. That said, you should definitely have a well-drafted, updated, and regularly reviewed power of attorney on file as well.

Keep Your Policy Updated

Once you are in your 40s, your long-term care policy should be reviewed annually to evaluate new insurance products on the market and update your policy based on your changing needs. Whatever you do, once you have a policy in place, make sure you don’t miss a premium payment, because if you stop paying, even for a short period of time, you’ll lose all of the money you invested and will have no access to the benefits when you need them. 

Reach out to us, as your Personal Family Lawyer®, for support in finding the right long-term care policy for your particular situation. Long-term care insurance, along with life insurance, are key components in your estate plan. When combined with the right estate planning vehicles, you can rest assured your family will be protected and provided for no matter what happens to you. Contact us today to learn more.

 

This article is a service of Stephanie D. Hon, Personal Family Lawyer®. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge. 
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