Not Wise to Wait and Plan

Over the last month I have consulted with many lovely and inspiring clients age 90 and up. These clients share the common goals of making sure they receive quality care for the remainder of their lives while at the same time preserving a portion of their wealth for their families. These clients also present some of the greatest challenges for the elder law attorney because they have waited so long to start the planning process.

By the time an individual reaches their 90’s they often have chronic health care conditions that require more comprehensive care. At a minimum they usually require assistance in the home from paid caregivers or family members. Oftentimes family members have been providing this care without compensation for years prior to seeking planning advice. Sometimes these family members have been being paid under an informal arrangement.  There are asset preservation planning techniques that can be used when family members are the caretakers, but often times they cannot be used retroactively.

Caregivers, both family and nonfamily, can be compensated for the care they provide.   All caregivers know what hard work care giving can be. While many family members rightfully feel it is their moral obligation to care for their family member, at the same time it is possible to preserve a portion of the family wealth by paying the family member for their services.

Here is the catch. To do this correctly, so that such payments are not considered a gift by the State when and if you need to apply for benefits at some time in the future, there must be a written contract that meets all of the requirements of Department of Public Welfare. Most importantly, the contract must be completed before the care giving services are performed, not after.  Just one very important reason why I stress it is NOT WISE TO WAIT.

Many times the family member will say they do not want to be compensated. While this is commendable, they can still accept the payments and save them for any unforeseen emergency care needs of the senior family member or for distribution among other heirs after death.  In this way the care-giving payments help to preserve wealth for future generations.

I do not want to discourage those in their 90’s from planning.  There are useful planning techniques for them as well, however, they are oftentimes more complex. At that age, unfortunately, there is less time left and fewer options.  Crisis planning should be avoided.

Families often are complacent when all is going well. They often feel that everything is under control and there is no need to do anything right now.  That is precisely the time the planning should begin. That is when families have the time and the energy to focus on these complex issues necessary to plan effectively to meet their goals. That also is the time to implement some of the planning techniques so families do not unnecessarily limit their future planning options.

By Leslie Wizelman, CELA | Wyalusing, PA |

This article is for informational purposes only and is not intended to be advertising, solicitation, or legal advice.  This article may not reflect the most recent legal changes.  Individual circumstances vary, and laws differ from state to state.  If you have a question about your specific situation, we recommend that you find a certified elder law attorney in your area.