Elder law is expansive, beneficial for seniors

When I was one of the younger folk of the family, we regularly referred to the elder family members as wrinklies (pronounced "ringk - leez"). Now that I am older, I am one, and my kids do not hesitate to remind me of that fact.

I really do need to update that photo the paper uses for my column.

You have probably heard the term "elder law" bantered about, especially now since the Baby Boomers are turning 65. You have most likely seen it on billboards or the TV or in the Yellow Pages. But what is it, and how does it affect you?

Elder law is actually quite expansive. It is less of an area of law than it is a type of client. Many attorneys, including myself, consider elder law to be the legal matters affecting seniors. It can range from estate planning to elder care to governmental benefits.

Of course elder law includes estate planning. You might think of estate planning as only death planning. However, estate planning also includes lifetime planning. The definition of estate planning we use in our office is: I want to control my property while I'm alive and well; plan for me and my loved ones if I become mentally disabled; and when I'm gone, I want to give what I have to whom I want, when I want and the way I want; all at the lowest overall cost to me and those I love.

At a minimum, you should have health care and financial powers of attorney and a will. Many of you would also benefit from having a trust. Powers of attorney are good only during your lifetime. Wills only take effect after death. And trusts can be used both during your lifetime and after you are gone.

With a properly drafted health care power of attorney, you can usually avoid a court-appointed guardian to make personal decisions about you, your care and your living arrangements. A health care power of attorney should include five essential provisions, among others:

• Appointment of a patient advocate and back-ups.

• Mental health care powers.

• Anatomical gift/organ donation powers, if desired.

• Medical record access and release powers.

• Living will provisions, which are basically when to pull the plug.

With a properly drafted financial power of attorney, you usually can avoid a court-appointed conservator to make decisions regarding your financial matters, your property and your other stuff. With the correct instructions, you also can protect your hard-earned assets in the event of a nursing home admission.

Your will provides instructions regarding the distribution of your financial assets, property and other stuff after you are gone. There are two downsides of a will:

• A will must go through the probate court process to work.

• A will does not control assets jointly owned or that have a beneficiary or transfer/payable-on-death designation.

A trust provides instructions about the handling of your financial assets, property and other stuff. To properly work and avoid probate after your death, your trust must be funded. Trust funding is completely and correctly designating your trust and individuals as owners, beneficiaries and insured parties of your assets.

In addition to estate planning, elder law also includes elder care, which is basically attending to you when you no longer can care for yourself, all by yourself. The focus is on your living arrangements and the supports you need to live safely and comfortably. This also includes caring for the caregiver. If you are caring for a spouse, you want to make sure you have adequate help in order to prevent caregiver burnout.

If you need assistance in your home, you can hire a private service or have family help out. If you are going to pay a family member to care for you, make sure there is a properly drafted caregiver contract in place before you start paying the family member. Otherwise, the payments to the family member could be considered gifts, resulting in a divestment penalty if you applied for Medicaid to fund your nursing home care.

There are variety of assisted care facilities available. These include senior apartments with supports as needed, to adult foster care homes. You might want to investigate long-term care insurance. Most policies now provide for assistance for your care wherever you might be living. It could be in your own home, an assisted care facility or a nursing home.

If you require 24/7 custodial care, then a nursing home usually is the most economical for you and your loved ones. And if you have the appropriate gifting instructions in your financial power of attorney, you can save some or all of your assets for your loved ones, instead of spending them all on nursing home care. You would then be able to apply for Medicaid to fund your nursing home care.

Medicaid is just one of a number of governmental benefits that affect you as a senior or for which you may be eligible. Elder law includes counseling about and assistance with these governmental benefits.

If you are a veteran or the single surviving spouse of a veteran who needs care in your own home, an assisted care facility or a nursing home, you might be eligible for veterans' Pension or Death Pension, also called "Aid and Attendance." Veterans or their surviving dependents also could be eligible for other veterans' benefits, such as Disability Compensation, Dependents Indemnity Compensation, VA healthcare, VA burial benefits and state veterans' benefits.

If you are older than 65, you are usually eligible for Medicare to help pay for your medical needs. Medicare consists of four parts — Parts A, B, C and D. Most Medicare enrollees have Parts A and B, often called "Original" or "Traditional" Medicare. Part A includes hospitalization and rehabilitative care after hospitalization. Part B includes doctors' visits, durable medical equipment and certain home health care services. In addition, you might have an employer-sponsored health care or a private pay Medigap/Medicare supplement policy to go along with Parts A and B. Part C is the Medicare Advantage program, which is the private insurance versions of Medicare Parts A and B. The fourth part of Medicare is Part D or prescription drug coverage.

Medicare counseling includes advice regarding hospital admission vs. observation and qualifying for up to 100 days of Medicare-paid rehabilitative care. It also includes discussions regarding continuing that rehabilitative care to prevent health deterioration, as opposed to the improper and erroneous plateau standard.

If you have 40 qualified earnings quarters, you usually are eligible for Social Security. You have many Social Security benefit options, especially if you are married. You can start taking reduced benefits at age 62; full benefits at full retirement age, 66 for me; or increased benefits after full retirement age up to application for benefits at age 70. If you are married, there might be ways to increase Social Security benefits if you file and suspend or have a spouse apply for spousal benefits early before applying on his or her own earnings record.

Elder law also encompasses general counseling about retirement and financial matters, and the tax effects of IRAs and other retirement plan distributions. Remember as you age and your physiological systems slow down, the effects are not only to your physical systems, but also to your mental systems. This makes sense. Your brain is part of your body. Why wouldn't it be affected by aging just like your heart or your bones?

Be on the lookout for the scammers out there trying to take advantage of you and your reduced financial acumen. Be especially watchful for the annuity peddlers who present annuities, especially deferred annuities, as investment vehicles, so that they can get the high commissions that annuities pay. I have heard very few justifiable reasons why anyone over the age of 65 should purchase a deferred annuity.

Elder law is very expansive. Attorneys who do this type of work for seniors should have a working knowledge of six areas of the law: estate planning, elder law, probate, real estate, taxation and business. Before hiring an attorney to assist you with these matters, satisfy yourself that the attorney is in fact knowledgeable in all six of these areas of the law.

Remember that there are estate planning attorneys, and other attorneys who do estate planning. I believe an attorney should not even draft a simple will or power of attorney unless he or she is familiar with these six areas of the law. Protect yourself and your loved ones.

Matthew M. Wallace is an attorney and CPA with the Wallace Law Firm, PC in Port Huron and can be reached at (810) 985-4320 or at matt@happylaw.com.