Yahoo Finance 4 Major Moves To Help You Avoid Going Broke When Paying for At-Home Care
When her mother developed Alzheimer’s disease, New Mexico resident Leonie Rosenstiel was unprepared to navigate the endless maze of elder care.
While she was able to stem the cost a bit in the beginning of her mother’s disease when around-the-clock care was not required, she said, “Hiring a full-time, individual caregiver turns much more expensive very quickly.”
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Rosenstiel, president of Dayspring Resources, said she spent $60,000 per year in home care as management services and commercial guardians were “deliberately trying to make sure they disposed of as much of [my] money as possible.”
She went on to write a book about her bad experience, called “Protecting Mama: Surviving the Legal Guardianship Swamp.”
So what can be done to mitigate the cost of at-home caregivers and prevent giant money pits? To find out, GOBankingRates spoke with Stuart Schoenfeld, elder care attorney and partner at Capell Barnett Matalon & Schoenfeld.
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Try To Offset Cost With Long-Term Care Policies and Medicaid
While Medicaid was initially designed for lower-income individuals, the program has evolved to be more accessible for middle-class (and sometimes even upper-class) individuals. The caveat, however, lies in being able to qualify for it when the government asks to see the last five years of your financials (referred to as the “five-year look-back”). If you make a certain amount of money, you’re on your own figuring out how to pay for care.
That’s where Schoenfeld advises clients to protect their assets and income by transferring them to a trust.
“Part of the planning process is to do it as early as possible to get through that five years,” Schoenfeld said.
This is absolutely a situation where inside knowledge and early education could give you a leg up. As CFP Nicole B. Simpson wrote, it’s the “lack of understanding regarding Medicaid and Medicare (that) can cause great financial harm.”
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Live in California or New York
While a move is not feasible for everyone, Schoenfeld points out that, in California and New York, “the five-year look-back doesn’t apply to Medicaid” for at-home care. It does, however, apply to nursing home care. These are part of state incentives to have family care for their loved ones at home. So, if a family member has an unexpectedly sudden need for at-home care and planning five years into the future is off the table, you are financially positioned much better by residing in one of these two states.
Look at Overall Spending
In the same way forgoing your morning Starbucks every day can help save thousands of dollars annually, many people do not realize they can re-allocate money from other places by simply taking a spending inventory. This can result in having more money to put toward caregivers or other qualified professionals without it feeling like such a financial strain.
“See where else they can cut back on spending,” Schoenfeld said. “Sometimes people come to me and I say, ‘I can’t help you until you can find the money or get your spending under control.'”
Avoid Scammers
Avoiding con artists can be easier said than done, especially given the physically and emotionally vulnerable nature of an elderly or infirm relative. That’s why it is always important for families to do their research and ensure they are getting the right financial professionals on board.
“Make sure the elderly aren’t getting scammed and that their money is safe wherever it is invested,” Schoenfeld said.
Financial advisors are typically looking out for the best interests of their clients; but, Schoenfeld cautioned, even they have to be watched: “I’ve had six, seven, eight clients where the kids called and said their money was stolen and they were taken advantage of.”
Smooth talkers may seem alluring when hiring a professional, but word of mouth and individual background checks are typically your friend.
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This article originally appeared on GOBankingRates.com: 4 Major Moves To Help You Avoid Going Broke When Paying for At-Home Care
