This hour, elder law attorney Jim Koewler at the Koewler Law Firm provides us with a guide to help people who are worried about long term care costs in the future. There are three basic strategies: do nothing, buy insurance, or give away assets. In this segment, Jim goes in further detail about buying insurance. There are two approaches: the “traditional” long term care insurance, and having long term care insurance tied to an asset investment. 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 three of our conversation with Jim Koewler, elder law attorney in the state of Ohio, and we have been talking about preparing for long term care and there’s a lot of considerations, obviously, and how an elder law attorney fits into the picture and we’ve been talking about, you know, really the strategies of how to even start in. Jim, welcome back to the show. Thank you, good to be back. So do you want to give us just a little bit of a summary on what we’ve been talking about the first two segments before we move into part three? Sure, okay. So we’re talking about planning it for long term care because you’re worried about it now you’re not yet needing long term care. So this is what not what elder at turneys call a crisis case. Right, you’re worried about it, you’re losing sleepover it or you’re considering and wondering for losing sleep over it. There are three basic strategies. Do Nothing by insurance or give assets away we have already talked about do nothing, and we are in the middle of insurance. We are using the following criteria to compare these three strategies. The cost of implementation, the risk added to the strategy, financial risk added to the strategy, not health care risk, convenience of implementing the strategy, how much control do you keep over your money and the likelihood of success of the strategy at protecting your assets. So we we were on the slide. We were talking about traditional long term care insurance versus one of the asset based insurance approaches where you can get a whole life insurance or a universal life insurance with a long term care writer or a an annuity with a long term care writer. As opposed to traditional, all we’re doing is ensuring your long term care risks. Right. Okay, so each of these has it somewhat different fit into the criteria. They’re very similar, but the not exact. The cost to implement the strategy for Traditional Long Term Care Insurance is actually quite high compared to other planning strategies. The financial risk, however, is low because with insurance you are paying a premium and that premium is the high cost. Okay, but the rest of your money you’re leaving where it is. You’re not giving a thing away. You’re not changing your investment strategy, you’re not emptying out your IRA, you are simply adding a payment you have to make every year, quarter, monthly, whatever. And but it long term care insurance is not inexpensive, especially the traditional time. It is very powerful. So you’re getting something for your money, but it’s not cheap. Okay, fair your risk. You again. The risk is risk added by the strategy is low, or actually close to zero. Okay, the convenience a very high. You pay the premium, you’re done, you don’t mess with the other assets. You continue to manage in the way you did. is very convenient as long as you pay your premiums. Don’t let them laps. If you sign up for entrance, by the way, put someone else on there to be notified if the premium stop getting paid, because if you suffer from dementia and stop paying the premiums because you forgot, you want someone else to know, not your spouse, okay, someone younger, a daughter, a son, a nice nephew, someone younger than you, to get noticed that you’re not paying the premiums. Okay, it gives you high control of your money. Yes, you have this added cost each year, but the rest of your money you maintain complete control. Okay. So you simply have another bill. Well, you know, every time you add another streaming service, you have another bill. Okay, you gave up control over the subscription for their streaming service. Okay. or every time you decide I’m going to starbucks, you’re giving up control over ten bucks just for a COP Cup of coffee. And I’m picking on somebody from Seattle here, aren’t? I? You are starbucks. My son manages the starbucks. I just don’t like coffee at but the likelihood of protecting assets is quite high with insurance. As long as you talked to auto log turney at the time, you could use the insurance. If you blow through the insure rants and it doesn’t job, it pays for care, but you haven’t anything with your assets during that time, you’ve missed an opportunity to get even more out of your insurance. Okay, and Ouda Law Turney can make the insurance worth two or three times more with the face value. Says or the payouts going to be something, because we know how to use that protect other money. So the money that you didn’t give up, the money over which you maintain control, why you were still healthy because the insurance allowed you to maintain control, is still there at risk if you run the insurance all the way to till it runs out and haven’t done anything with that other money. Okay. So it’s a high likely to protecting assets if you get help from an old law attorney. It’s at best moderate if you don’t get up from out to law attorney and you simply run out the insurance, because if you outlive the insurance now all of your other assets are at risk. Okay. It also is not low because you could get a what’s called a partnership policy which then, however much it paid out, medicapably ignore that much if you’re in a partnership state. Oh, I was a partnership state. Not all states on the partnership program so you have to check on your state before you buy something with that promised. Okay, asset connected insurance. These are the ones tied to whole life, universal life or annuities. There may be one or two others, but those are the big east. Okay, again the costume pump. The strategy is quite high. The insure prants’ is probably going to be cheaper with life and long term care, but the pay up for long term care is plaly going to be lower than if you get a traditional long term care insurance. The risk added to the strategy is moderate because you’ve tied it to an asset and the value of that asset could go up or down. Okay, if you do it to a whole life, the risk is it’s growth does not keep up with inflation. Right. If you tie it to a universal life that is tied to the stock market, you’re going to be on a roller coaster. Okay, if you tied to one of those that it can only follow so much, but you have all the upside. Read the fine print on that really carefully, because their abilities to offer you everything that grows and and control your losses. They’re probably not tied completely to whatever market they’re talking about. Okay, be very careful. And that’s not a long term care is you. That’s an investment issue. Okay. So, depending what asset tie tie you have there you have added some moderate risk to your financial world. Okay, it’s quite convenient because, just like traditional long term care insurance, you still main control. Maintain control over the rest of your money. So that hasn’t changed. It’s have to pay this cremium every month, quarter, annually, whatever. Okay, again, you have controller. I’m sorry, that Conping us as high because you just pick your premium. You maintain control of your money. Is High because you as long as you pay the premium, you’re done. You’ve carried it out. And again, the likely to protect an assets is high if you could help from an no to law attorney. It’s moderate. If you run out the policy and if you, if you forget, forget to get help from an no to law attorney and you could potentially run out the policy and still have your assets out there way to be grabbed by Medicaid. Okay, so that’s what we’re looking at. Those of the criteria applied to insurance. So we’re into our last strategy. So are giving away assets. Has Two gifting approaches. Direct gifts to a person or it could be to a charity, but generally we’re talking about protecting money inside the family. So it’s going to be a person or into a trust, and you need to use an irrevocable trust here, or irrevocable if you’re of that pronunciation. forect about preference, because if you use a revocable trust, that’s just the same as you owning Medicaid or be able to take you to re tell you to revoke the trust and use the money. Okay, so you have to use an irrevocable trust for it to work. With an irrevocable trust the cost is quite low. You may balk at what an older law attorney or an estate planning attorney, and for this I think you need one, an elder law attorney, someone who does long term care, because you want a trust written for long term care in mind. And I love estate planning attorneys, but most of them don’t understand long term care risks and you can read their powers of attorney that they write and realize they don’t understand long term care. They don’t. Okay, and I try to reach out to as many estate play atterneys as I can and say I’m not messing with your Aria, I’m not trying to write wheels and powers of attorney, I don’t do probate, so I leave your alone. Please leave mine alone. Let me help your clients and let me put the estate plan back together should they need long term care. So go to an elder law attorney. You can find one. If you’re in Ohio, please call me. If you’re not in Ohio, you can find an Ole law attorney, probably through Nayla and AELA. That’s the National Academy of Outer Law Attorneys Dot Org. There is a find a lawyer button there. Okay, and then check the website to see if they really do long term care. I know people who call themselves out a low attorneys and all they do is right wheels. Technically, I guess that’s outer law and as long as they pay the fee. Nay, that will take their money and include them on the right right. Need their website to see what they really do. Okay. So, but it’s as compared to long term care costs. The cost to create a trust is low. Okay, few thousand dollars, okay, depending where you are. Yeah, this added by the strategy is moderate because when you are using the give things away now strategy, you run the risk of not going five years without needing medicaids help for long term care. Sure, okay, that’s the risk you run. That’s why it’s moderate. Convenience is low. Over the money you put into the trust or other assets, whatever it is. Okay. Now, if we put your house into a trust, actually convenience is still fight high because it still acts like a house. You can still live it. You’re going to heal your the beneficiary of the trusts attendant. Now, okay, of the trust as the owner, or you maybe a subtenant of the recrust, as the owner of one of the beneficiary, one of the death beneficiaries of the trust being the direct tenant and you’re a subtenant. That’s the approach, all right. Friend of mine taught me that approach because I’ve gone direct tendency with the trust and I realized the bat the added value of his approach. But but the house sects like a house. You can still live in it, you still pay the utilities and the UPKEEPING, Ceter okay, just like it was before. But for other assets, there yours anymore. Okay, you don’t get the benefit of the stock market going up and down with stuff that you put into the trust and have riding the stock market roller coaster. Correct. So and it so. People have to be willing to give things up and put them in the trust, and that level of inconvenience is something they don’t like the control over the money because it’s not your money anymore inside the trust. True, is low. You have to build to give it up. That also means you’re not putting everything you got into the trust. You have to hold enough back to support your lifestyle, but your income. How much more do you think you’ll need? Yes, I’m asking you to look under Crystal Ball. When I do this with clients, we talked. Now the house is different. I’ll put the house into a trust, no problem by itself, lock, stock and ball, because that is either all that are all out. Okay, but again it still lacks their house, but with other assets. I ask people to estimate with they think they need, and then I insist that they add an extra ten percent and that’s what they keep. Okay, at least an extra ten percent, because I’d rather they keep more for their own lives before they need care. Try to shelter a bit more. That doesn’t benefit them a benefits their children and grandchildren. I love the children grandchildren, but I’m stored of my clients and I want them to have a good life for right long as possible. Absolutely, and then the likely to protecting assets is moderate, again, because you may not get through the five years. Right. There is also an added risk with the strategy. Now I’m going thinking back to the risk added by the strategy. This is going to be risk, probably as much in your mind as anywhere else, but it is. It was your money before you put it in the trust. So what’s in your mind is very fair. The trustee may not invest it manage it the way you want them to. Write. Well, you know what, tough. You gave up control. That’s the whole point of this. If you give up control and go five years letting you medicates. Hell, all, Medica’s enough. On touch it Gould you. You’ve outlasted. Look back period. Okay, but the cost of that is you have to give up control of someone else and it’s not your ownership anymore. Right, right, because it’s the lack of legal ownership that allows medicate to agree. Correct. Okay. So should we go to segment four at this point? Sure, let’s go to segment warm. Okay. So everyone, I just want to let you all know that we are again giving this presentation on Youtube. Go to answers for elders on Youtube and you will find it there. Will also absolutely put it on our website. So anyway, just stay tuned for that. In the meantime, we have more to share on this topic planning for long term care and what is all involved with Mr Jim Taylor at turn it law in Ohio, and we’ll be right back right after this state of Ohio residence. 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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