This hour, elder law attorney Jim Koewler at the Koewler Law Firm looks at the criteria used to compare planning strategies. There are three basic strategies: do nothing, buy insurance, or give away assets. The criteria Jim uses compare those methods are: the cost to implement the strategy, the risk to your money, how convenient is it to carry out the strategy, how much control does it give you over money, and the likelihood that it will protect your assets. A PowerPoint presentation accompanies this segment — watch this segment on YouTube’s Answers For Elders channel.
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*The following is the output of transcribing from an audio recording. Although the transcription is largely accurate, in some cases it is incomplete or inaccurate due to inaudible passages or transcription errors.
The following podcast is by Mr Jim Koewler, elder law and special needs attorney, helping and protecting those who need long term care. And welcome back everyone to part to a planning ahead for long term care with Mr Jim Koewler, attorney at law in the state of Ohio. And Jim, welcome back. I am so interested in this topic and you’ve hit on so many key points. We’re going to talk about three basic strategies to plan ahead for long term care. ACROST do nothing, buy insurance or give assets away. If you want to see you see this slide and you know if you want to make a decision of whether the plan ahead. Go back and take a look at part one of the podcast. I don’t want to take up time to repeat that because I always use in more time. So the criteria we’re going to use to compare those three methods are the cost implement the strategy, the risk added to the strategy the risk to the money. Okay, we’re not talking about adding to your risk of needing care. We’re talking about health here. Okay, we’re just risk to the money, because there’s risk with money no matter what. Okay, so you got to keep that in mind. The risk of long term caring your future. Doesn’t change the risk of having inflation. It doesn’t change the risk of markets going up and down. Okay it, but does the strategy add risk of some sort to the assets? How convenient is it to implement and in continue to carry out the strategy? How much control does it give you over summer all of your money, and what is the likelihood of this strategy of protecting your assets from the costs of long term care in your future? Those are our five criteria for comparison. So we’re going to apply those criteria one by one to each strategy. The do nothing strategy. Why does that sound like an old, hundred years ago political party? Sorry, just too much just to be while raving on over there was the do nothing party, okay, or maybe the do nothing wing of one of the parties. Just all of a sudden just popped out of my head. The stream of unconsciousness is how I referred to what goes on in my head sometimes. Okay, so to do nothing. Obviously there’s no cost to doing nothing. There’s no added risk because you’ve done nothing. Okay, you’re still subject to inplacent risk, you’re still subject to market risk your subject to not keeping up with interest rates, or you could outstrip everything and blow away the smp five hundred and everything else. Okay, but there’s no added risk by doing nothing, because you’re in the same situation you were before you decided. Now I’m fine, I’m just stand pat. Okay, very high convenience, because you ain’t don’t do squat. You say no, I’m set. I’m fine, I’m holding. You know, twenty and a game of twenty one. I’m going to set. Gives you high control of your money because you haven’t tied any of it up by giving it away, you haven’t put into a trust, you haven’t promised too. Are decided to buy another entrance policy, the premiums of which you must pay. Okay, so high control of your money. However, the likelihood of protecting assets is low, okay, low, it could be called a moderate likelihood of protecting assets. If you look for an elder law attorney in your area, like I am in Ohio. If you seek that attorney at the time, you need care. Okay. Remember, the do nothing strategy is what you decide to do now. Why? You’re still healthy. You can change the do nothing strategy if you want. You can change any time. The question if you want to give assets away, as do you make the five year look back or the three your look right? Yay, but that’s a different question. We talk about that. But even if you go to a crisis case, I we I talked about what crisis cases are as supposed to preplanning and part one. I’m not going to repeat it, but when you need care, that could change your mind. Generally, in my experience, and I’ve gotten nods of agreement from ottaw attorney in Ohio. I don’t know what it’s like in Texas, Massachusetts, main anything, okay, but generally we can protect about forty percent, even the crisis circumstances. Okay, if you plan ahead you’re protecting a hundred percent of what you used to plan ahead. Okay, there’s assuming that it all works out. Okay, you make the five years or the entrance pays out the way it’s supposed to. Except okay. But even if you’ve done nothing to plan ahead and you hit a crisis, someone needs care right now. Generally in Ohio Anyway, and I’m guessing this is not tens of percentage points off from other parts of the country, but it’s definitely going to be percentage points off. California is, in New York of more expensive. Maine is, least as of several years ago, just because I hadn’t known out all attorney in Maine. My God, they were three grand more expensive than us at the time right. I was stunned. The main was at expensive. So it’s going to depend on the cost locally where you are. Okay, but forty percent is about what I can hit. So I’m guessing. You know, the law attorney in Florida can hit three thousand to forty thirty or to forty or forty five percent, and at the law attorney into North Dakota could at thirty five to forty percent. Same Ballpark, probably okay, but that’s at the time you need care. Okay, you’re doing nothing now, choosing to do nothing now, or you’re not paying any tention to what I say and therefore are doing nothing because you’re not thinking about anything about long term care in your future. But if you’re listening, you’re obviously for worse to think about it. You got to hear my littlting voice, but now you’re taking no steps to plant for long term care costs. And that’s okay if that’s what you want to do. Sure. So, strategy to buying long term care insurance, there are two entrance approaches. Okay, you can have a traditional long term care insurance policy, kind of a standalone. It only pays for a long term care some people don’t like that because they if they don’t need long term care before they die. Now, mind you, about three quarters of people are raged. Sixty five will need long term care before they die. Yet, so you are aiming to be one in four if you don’t need long term care before you die. Just keep that in mind. Okay, I’m a poking at your denial right now. Okay, but a traditional long term care insurance policy, if you’d never need long term care before you die, then people view that as wasting the premiums and making are quotes for those who are only listening. Okay, you’ve wasted the premiums. Well, let’s compare that a second to your homeowner’s insurance. You buy your homeowers insurance, you ensure your home against fire, flood, collapse, Snow, falling tree, whatever, and a year later you nothing’s happened. Have you wasted those premiums or did they help you sleep at night, right, okay. Now, if you have a loan in your house, you got to do it anyway. Okay. But let’s say you buy disability insurance. Disability insurance is not required by anybody. No. Does it help you sleep at night? Absolutely. That’s the point of planning ahead. If you get long Term Care Insurance, the point of the insurances to help you sleep at night. Now, so I have a question for you, of course. With you were talking about the fact of Long Term Care Insurance tied to an asset investment, because I’m looking ahead on your your screen. Yeah, what about those people that have traditional life insurance that have been paying on it for years? Then what happens? Okay, if you have traditional life insurance, member, there’s two different too big carecters of life insurance. Okay, there’s term insurance that will not take your money anymore after you reach a certain age because you’ve give be a a real risk at dying. Okay, but while you’re in your big earning years, where your children depend on you to pay for college or mortgage still needs to be paid, etc. Okay, then term insurance, at a relatively low cost, can get you a lot of insurance in case of calamity. Okay. The other route you can go is some sort of cash value policy. A Life, obvious, sorry, a whole life, a universal life. Universal Life Index is all sorts of things. Some of them are tied to interest rate, some of them in tied to the stock market. I’m a whole life fan because it’s if you’re don’t play the stock market, play the stock market. Okay, whole life, in my view, life and any long term insurance, Long Term Care Insurance, life insurance, anything you’re planning way off in the future. You want it to be boring because, yeah, you want it to be there in forty years. You’re not taking fire on this. Okay, if your auto insurance goes away six months after you about the policy because the insurance company collapsed or decided to pull out of your state. Or okay, let’s say you’re in Florida. Your homeowners insurance has had enough trouble with hurricanes. We’re out of here. Okay, you can find different homeowners insurance. Yeah, you can find different auto insurance because they rate you on your age and you’re driving record every year. Okay, so it was going to go up anyway. You can’t buy say you’re not. You’re not necessarily locked in, so you might as well just you know, right. But insurance with cash five your life insurance or traditional long term care insurance, you’re locked in for decades, you hope. Yeah, okay, so you want to get it while you are underwriteable, your relatively healthy. You’re not showing anything that’s going to create a long term care risk to the insurance company. If you’re looking at long term care insurance here you they don’t look at you and say, Oh my God, this person is going to die in five years, we’re not going to do their life insurance. Okay, you’re looking to lock something in if you’re going with some sort of cash value life insurance or a traditional long term care policy. Okay. So with a with and we’re seeing this more and more now, you can buy a life insurance policy, cash value life for insurance policy. I’ve never seen with the term policy, one of those that if you don’t die, that you’re fine. You pay an extra’s premiums, you don’t know next year. You’ve had the premiums. After that, okay, doesn’t build up a cash value. Okay. And, by the way, almost all group insurance, but something you get from your employer is going to be the term type. You get a group rating. I’ve never seen a group cash value insurance. Okay. I have seen group long term care in hurts. The People are able to keep Sarah. Those are great. You get great rates and good coverage. Okay, and that’s not on here just because it’s you’ve got to be off with through your employer or some other group. You know, hey, if your member of the Medical Association in your State or the Bar Association of something, see if you can get them to make some deal with some insurance company and get longer care insurance added to the list. Okay, by the way, you want to prefer rate. I get through the bars. I get a lot of solicitations the Bar Association, but there’s no price breaks on it. Okay, it’s a mailing list. Okay, to be careful and a few of those in my life. Oh yeah, that’s sure, we all get. Okay, Oh, you remember, Oh you remember at AAA, let’s offer you our long term care insurance. It’s okay. What price break do I get? Oh, none, no, okay, if you’re got to get a group writing, get a price break on it. Otherwise, go look for the insurance on your up sure. Okay, so, because those are selling with mailing lists, are offering you the high quality insurance most of the time. Now, okay, so you can now get a life insurance policy with a long term care writer, or you can flip it on its head and get a long term care insurance policy with a return of premium writer, which means, excuse me, which means if you die without needing it, then the premium goes back. Now, mind you, no interest on the premium, but you haven’t wasted your money. It hasn’t grown, we haven’t wasted your money. Your family now gets that as a payout upon death. Okay. Yeah. Or if you have a lot of money you want to drop right now, yeah, you can also buy there are some places where you can buy an annuity. You know one of those? Yeah, pay for it now and it paids you income over time. Okay, you can drop a lot of money, and we’re talking like in a minimum of Fiftyzero all at once, single premium up front, and you can buy an annuity and it has a long term care writer on it. So if you don’t, if you need long term care, then it’s going to eat your investment first. So be aware, right, right, it’s going to eat your money first. But most of these have a multiplier. You put down Fiftyzero to buy this annuity and you never need long term care, then you’re going to get the fifty grand plus whatever interesting group, okay, or whatever other investment method it uses to grow. Okay. Some of nuities are tied to the stock markets. Were trying to interest again, a nuity should be boring. So I think it should be tied to interest rates. Okay, again you want to play the stock market. Play the stock market. Obulous. Okay, that’s just Jim on investing in my investment portfolio is so wonderful I wouldn’t take any of my advice. There we go. So, but if you you worried about it, you want to do it now. But you’ve got you like annuities, or you’ve got a big pot of money, you want to just deal with it all at once. To be done, you can get an annuity and generally you get one and a half times the so if you put pick fiftyzero down, you might get, said you five thousand of Long Term Care Insurance, but I’ve seen as high as two and a half times. You put fifty down and you got two, Fiftyzero of Long Term Care Insurance. Should you need that? Okay, so that’s another possibility. Yes, and I think one of the things that we’re you know, talking about long term care carronshirts. We’re going to go even more in this discussion here in our next segment and remember to everyone go to Youtube, go to answers for elders. You’ll be finding this power point as we’re talking about it. If you’re interested more information, and Jim is available to speak with you. He’s also on our website and I in the meantime. Jim, what is your website, just so people can go to you? My website is protecting seniorscom protect with an IG, senior with an s on the end, like more than one seniorcom. That’s short for protecting seniors and people with special needs. And Jim, you are in the state of Ohio, but also there’s elder law attorneys all throughout the USA and you know we encourage every single family to visit one to learn a little bit more about them. And Jim will be right back with protecting your long term care benefits coming up in the next segment. State of Ohio residents, you have a friend to help you navigate long term care while protecting your assets. You can reach Jim at www dot protecting seniorscom or just email him at j Koewler afe. That’s j Taylor AFE at Protecting Seniorscom
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Founder and CEO of Answers for Elders, Inc., Suzanne Newman proclaims often, “Caring for my mom was the hardest thing I ever have done, but it was also my greatest privilege.” Following a career of over 25 years in sales, media, and marketing management, Suzanne Newman found herself on a 6-year journey caring for her mother. Her trials and tribulations as a family caregiver inspired an impassioned life mission outside of the corporate world to revolutionize the journey that so many other American families also find themselves on. In 2009, she became the founder and CEO of Answers for Elders, Inc., subsequently hosting hundreds of radio segments and podcasts, as well as authoring her first book. Suzanne and Answers for Elders, Inc. have spent 14 years, and counting, committed to helping families and seniors along their caregiving journeys by providing education, resources, and support. Each week on the Answers for Elders podcast, Suzanne is joined by vetted professional experts in over 65 categories including Health & Wellness, Life Changes, Living Options, Money, Law, and more. Suzanne lives in Edmonds, Washington with her husband, Keith, and their two doodle dogs, Whidbey and Skagit.
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