Is Your Aging Client Supporting An Unsuccessful Adult Child?

Is Your Aging Client Supporting An Unsuccessful Adult Child?

Feb 16, 2017 | aging, financial advisors, financial capacity, financial elder abuse, financial judgement, handling money for seniors

You may have an older client who has an adult child living in their home. We are not talking about co-housing or multi-generational households folks choose for a variety of sensible reasons. This is not about the daughter who gives up work to move in and take care of your aging client. Rather, this is a somewhat hidden population of adult children who have never quite been able to support themselves.

There may be a mental health issue, substance abuse or other condition which impairs the individual's ability to reliably earn a living. Some of these adults have never succeeded in the workplace. Others have had a setback of some kind and never were able to regain or keep employment afterward. These adult children of your clients may be middle aged, yet dependent on your client for the basics of life: food, clothing and shelter as well as other benefits.

At AgingInvestor.com, we hear from the families, usually the siblings of the adult child who does work yet who receives free lodging and support from the parent. The common thread is a co-dependent relationship between parent and the "problematic" adult child. The parents may feel guilty about the unsuccessful child, they may be intimidated by that offspring or they simply may lack the courage to insist on some other arrangement. You may be thinking, ok, so what's the problem? My client is fine. She has good income. She can do what she wants with it.

Don't draw that conclusion so fast. People are living longer than ever and as clients live on, they may need to liquidate some things to cover their increasing care needs. The family home is one of the things that can be liquidated, especially when assisted living is a better place for an elder client who can't live alone anymore.

The family may agree that your client's home must be sold to raise cash to meet caregiving needs. No one knows what to do with the sibling still living at that home. They won't move out.

Without addressing the issue in advance, this can get ugly. We have seen in the last year alone, several families who were involved in formal legal evictions of the dependent sibling who refused to leave the home. Would your client want that? In other instances, there is a nasty, expensive probate fight going on over the sibling refusing to leave the home even after the parent passes away. The inheritance is held up because the house can't go on the market.

Isn't planning for the future your job? These very unpleasant scenes can be avoided with good strategy initiated by you with your aging clients, about the future of that unemployed adult child who has no plan for what to do next. The family needs to explore every option for the needy sibling. Can he or she qualify for public benefits, such as disability or government-subsidized housing? Do the parents have the means to set up a trust to provide for his or her basic needs? Is there any other option for support? Delving into these things takes time. The social services system can be complicated. The time to start talking with your client about her unsuccessful 55 year old son at home is not on the eve of a crisis. The client who has allowed the situation to go on must be persuaded to make a change before that crisis. No one wants to look at this issue but it can only lead to bad outcomes if it is not explored.

Here are three things you can do now:

1. Find out from any aging client if he or she is supporting anyone. That's basic. Then get more detail. How long has the unemployed middle aged daughter been living in your client's home? What will happen to her when/if your client has to leave her home or sell it?

2.  Connect with your client's estate planning attorney, with permission of course, and see what planning is done for an heir who is not working and does not have a retirement plan herself.  Has your client provided for this need? Is your client's cash going to be tapped for supporting an adult child? Has a trust been set up and what does it allow for your client to do for the adult child and when?

3.  Get advice yourself about what options your client's adult child may have, should your client become impaired and unable to give her offspring support in the home. The county's department of health services and department of social services as well as nonprofit community service agencies are good places to start. Encourage your client to think it through and not burden any other children with an eviction case or probate mess in the future.

By Carolyn Rosenblatt, RN, Elder Law Attorney, & Dr. Mikol Davis, Gerontologist co-founder of AgingInvestor.com

The Worst Misconception About Advisors and Elder Financial Abuse

The Worst Misconception About Advisors and Elder Financial Abuse

Jan 30, 2017 | aging, diminished cognition, elder investor, elderly, financial elder abuse, scammers

Imagine this: your aging client is 86 years old, slightly grumpy, and he thinks he knows better than just about everyone else on nearly everything. He's quite willing to follow your advice, though and that's what makes a good relationship with him.

 

Lately, he's got you worried. He is obsessed with the internet. He spends many hours a day on it and he tells you about this man he met online who has an amazing investment he wants to get into. When he starts telling you about it, it sounds like a scam of the worst kind. You warn him not to do it and he says you don't understand.

 

He asks you to liquidate one of his investments you manage. You do it. He tells you how happy he is that he's got this great thing going now. A month later he calls you and wants to liquidate a lot of his funds to raise some significant cash for his "friend" who has the scammer-sounding "investment". You say, "don't do this!" He won't follow your advice. This is new, and puzzling. What should you do?

 

Rules tell you that you must follow your client's instruction and that you are not supposed to reveal his financial information to anyone. Should you call Adult Protective Services? Can you? You are not sure what to do.

 

Here's the answer: you are permitted to report financial elder abuse. According to the regulators' Interagency Guidance on Privacy Laws and Reporting Financial Abuse of Older Persons, which discusses the issue in detail, you are also permitted to disclose this information to protect against or prevent actual or potential fraud.

 

But what if your client think his internet "friend" is fine even if you are seeing telltale signs of fraud in your client's interactions with the scammer? You can report the apparent crime in an online form to the FBI as long as you know enough detail from your client. I think anyone who suspects internet fraud should do this, even if it turns out to be some legitimate thing in the end. It probably isn't. And your client's money could all be gone if you do nothing. Would that be okay with you?

 

Financial professionals need to be clear about your role in preventing and stopping elder abuse. Law enforcement can't always stop the criminals but sometimes they do. No one can stop what is never reported to them. Do not be misled by the misconception that protecting your client's private information is supposed to stop you from reporting apparent fraud and abuse.

 

You could be the difference between your client's safety and your client being wiped out financially. Take a deeper dive and get very smart in an accredited one hour online course about stopping financial abuse. Click here now.

Carolyn Rosenblatt, R.N., Elder Law Attorney & Dr. Mikol Davis

co-founders of AgingInvestor.com and AgingParents.com

 

What Is The Real Cost of Long Term Care For Aging Clients?

What Is The Real Cost of Long Term Care For Aging Clients?

Jan 16, 2017 | aging, finances for elders, long term care, long term care insurance, medicare

Are you doing retirement planning with your clients? Do you understand the real dollars involved in long term care? It goes way beyond out of pocket medical expenses for Medicare premiums, supplemental insurance and medicines. You need to help them free up enough to pay for it.

We are indeed living longer now due to advances in medicine and technology but what is the condition we're in with longevity? It's not true that we're living healthier than the prior generation.

No one wants to talk about the reality that things like obesity, in 30-35% of Boomers are going to affect whether they need to pay for lots of things Medicare does not cover. Obesity is frequently associated with significantly greater risk for heart disease, strokes and diabetes. Boomers have the highest rates of obesity of any age group in the U.S. If you want to pick conditions that are most likely to result in the need for long term care, all of these are among them.

Retirement planning can be very tricky when it comes to considering the cost of long term care. Most people don't want to have a conversation about what would happen if they became disabled. Most would rather change the subject quickly if the issue of possible diminished capacity is raised. "That's NOT going to happen to me!" is the expected response. But the risk is real, and there are plenty of statistics to support an analysis of what it costs to care for a person with disabling health conditions.

According to the Genworth Cost of Care Survey, which comes out annually, 70% of people over the age of 65 will need some kind of long term support as they age. At AgingInvestor.com, we recommend that every financial professional have the latest study on hand and that you share it with your clients when you do retirement planning. Chances are they are not as healthy as their parents were. And what kind of care will they need?

Most people want to stay at home as they age. Many will use home care services to be able to stay at home. Here's an example. My now 94 year old mother in law, Alice, had numerous hospitalizations for a couple of months, for blood pressure issues, the flu and other problems. She simply wasn't safe living independently in her apartment as she recovered. A home care worker came in every day for a cost of $25 per hour, initially for 12 hours a day. That cost is not paid by Medicare.

She's a good example of how we can need care with advanced age even if we do things right. She has always taken good care of herself, doesn't smoke, doesn't abuse alcohol, exercises regularly and keeps her weight in normal range. And yet, after illness she needed 24/7 care. The overall out of pocket costs associated with that bout of illness approached $10,000. She's fairly tough and did recover fully. However at her age that is not what usually happens. Home care could be needed indefinitely at a cost even part-time of at least $20,000 per year.

The extra $20,000 a year any less resilient elder could need is for someone who has neither heart disease nor diabetes. Chronic illnesses put a person at even greater risk of needing expensive care. Full time around the clock help can run $250,000 per year and up, depending on geographic area market rates.

Here's the takeaway: Expect that anyone who reaches the age of 80 is much more likely than not to need cash to pay for help of some kind. If your client is overweight or obese, the risk is very high. Ditto if your client smokes. Be sure to plan for making cash available to cover your client's likely needs in his later years. Most of what is usually required is not covered by either Medicare nor supplemental "Medigap" insurance.

By Carolyn Rosenblatt, RN, Attorney, AgingParents.com and AgingInvestor.com

Aging Clients and Secrecy About Finances

Aging Clients and Secrecy About Finances

Jan 5, 2017 | aging, aging investor, diminished cognition, elder investor, finances for elders, power of attorney, senior investor, seniors finances

Have you ever had a stubborn older client who told you he'd never talk about his assets with anyone but you? He doesn't think he'll ever need help in his life and he wants to be in charge. When you suggest a family meeting to let someone else know what to do in case he ever became ill and unable to communicate, he shuts you down.   This is all too common.

A consistent obstacle to communication we see in our work is the resistance of the older person to discuss finances with anyone, including their adult children or other heirs. The Great Depression led to secrecy about finances for many, as fortunes were lost sometimes overnight and once proud people became impoverished. Talking openly about money was just not done for those who grew up in this time of widespread devastating and sometimes life-ending financial losses. To this segment of our population, openly discussing money was considered rude, unseemly. Some of these Depression-era survivors remain reluctant to tell anyone in their families where their accounts are, what their assets are and what they want done with their assets in the event of incapacity.

Presumably when you have a long-term relationship with your client, she trusts you and trusts your judgment. That gives you leverage. You may know more about her finances than her family, her friends or anyone in her life. You are charged with the task of long range planning and you look ahead. In doing so, it is up to you to urge your client, gently, repeatedly and with ongoing persistence that she find someone she can trust to appoint to protect her if she has an accident, falls ill, or can't speak for herself.

Sometimes persistence pays. The power of your relationship is a tool to persuade your client to come around. This is not a situation to ignore just because your client resists. The older she is, the more there is at risk. Anything can happen to her health at any time.

If your client resists, we encourage you to repeat your requesting a week or a month. Do it in a tactful way and paint a verbal picture for her of what would happen if she were no longer able to speak for herself. Tell her how frustrating it would be to have to refer her account to your legal department for a decision about getting a court involved if she could no longer communicate. Tell her how upset that would make you feel. Express your own concerns and make it your problem.

We hope that every single person in your book of business has an appointed trusted other for you to contact. You may well need that and it can be up to you to urge your client to take care of that most important piece of legal business, the Durable Power of Attorney, if she has not done this. Diminished capacity can sneak up on your client and you'll need help.

It's a new role you have with the oldest clients. They are living longer than they thought they would and with longevity come the risks of impairment in all ways.

If you'd like to take a little deeper dive into managing clients with diminished capacity, you can get a lot of expertise in a one hour online course by clicking here.

By Carolyn Rosenblatt, RN, Elder Law Attorney

AgingParents.com and AgingInvestor.com

Will Your Senior Clients Be Harmed When Obamacare Is Repealed?

Will Your Senior Clients Be Harmed When Obamacare Is Repealed?

Dec 21, 2016 | aging, elderly, finances for elders, handling money for aging parents, long term care, Obama care

The short answer is "yes", unless every one of them is high net worth. For those who are very wealthy, there will be no effect as they will pay out of pocket. However for any client who lives long enough to spend down everything and to get low on funds the effect will be palpable. Though neither party is talking about what happens to seniors of modest means with the repeal of the Affordable Care Act here's the hidden truth.

Low income seniors who could not afford the high cost of long term care had no choice when they ran out of money except a nursing home. Until Congress passed legislation called Community First Choice (CFC), that is. This is a bipartisan supported program that is optional for states. It gives seniors and disabled people a choice to remain at home and supports family caregivers. If a state adopts CFC, it receives extra federal funding (6%) to pay for personal attendant services. This funding is critical. States who want CFC must make the initial investment in home and community-based services before they see savings over the long run.

According to the National Council on Aging, eight states have adopted it so far and at least four more are applying for it or are considering applying. With our growing senior population it is right to give elders a choice of not having to go to a nursing home, a fate many dread and fear.

Even though care at home is normally cheaper and better than nursing home care, there is still a bias in our Federal law that compels states to pay for nursing home care, but not home care. It makes no sense. The CFC is an effort to eliminate the bias in the law favoring nursing home care and promote doing what is better for our elders: allowing them a way to pay for home care using family to provide it with financial support.

Repealing the ACA will de-fund this successful CFC program.

The Republican Platform states: "Our aging population must have access to safe and affordable care. Because most seniors desire to age at home, we will make homecare a priority in public policy and will implement programs to protect against elder abuse."

Really? If this is a priority, how has a helpful program for seniors been ignored in the dialog about the necessity repeal Obamacare? And what about the millions of people ages 55-64 who need health insurance and can't afford it? Expanded Medicaid and subsidies help them now. Those programs are on the chopping block in the oncoming rush to "cut government spending".

The elder and disabled adults who need Community First Choice funding and all community based efforts to keep them out of nursing homes are not marching in the streets. They need total care or help to maintain themselves at home. They are not in the news. They are a population without a voice except by aging organizations who fought for CFC in the first place. Any client who spends a fortune on long term care over years and depletes her assets could end up needing Medicaid. Those are the most at risk folks. No matter how skilled you are no one can make money last forever for those who are less than high net worth.

Do not be fooled into thinking that those who relish the idea of quickly trashing Obamacare really are concerned about what happens to low income seniors. These seniors comprise a significant part of our population. The elders with modest means and modest savings who need long term care can't pay for it. They are the ones being forced to go to a place they don't want to be.

The Money Follows the Person Program, which assists states in making home and community-based services more widely available expired in October 2016. If Congress is throwing out all things related to the Affordable Care Act, what are the chances of renewing this program?

If you have aging clients who might live long enough to run out of funds, this will directly affect what happens with them. If you are planning for them for lifelong financial safety, consider that much of what formerly was in place to keep them out of nursing homes will likely be gone should they live to be 100 and are no longer wealthy. Be sure to keep in mind that nursing homes are about three times the cost of staying at home with care in place there.

By Carolyn Rosenblatt, RN, Elder Law Attorney, Dr. Mikol Davis, Geriatric Psychologist, AgingInvestor.com