The Independent Investor: Elder Care in an Age of Confusion
Many Americans confess that they are confused when faced with the myriad Medicare choices available to them. Others are simply not planning, nor saving enough to meet the challenge of health care costs in old age. In response, a whole new industry has sprung up nationwide.
It's called "life care planning," an off-shoot and a natural progression for those practicing elder law. What, you may ask, is elder law and why has it become so important? Attorneys that practice elder law are essentially advocates for the elderly and their loved ones. They routinely handle a range of legal issues that usually accompany an older or disabled person.
Many of these topics have been covered in this column: Medicare/Medicaid planning, Social Security, retirement, long-term care insurance, rising health care costs and more. These lawyers can also help with wills, trusts, special needs, probate proceedings, durable powers of attorney, pet trusts and other estate planning matters. These, too, have been topics of many of my columns.
Life care planning takes this concept a step further. In most cases, when someone becomes disabled or reaches a certain age there is a level of care that is required. Life care planners first identify the level of care an individual needs, locates the appropriate care givers, and then figures out and coordinates the necessary private and public resources necessary to help pay for it. But it doesn't end there.
Once we reach a certain age (or our infirmities escalate) someone needs to both monitor and try to predict the next level of care required and most of the time those responsibilities rest on the shoulders of a family member. Unfortunately, most of us are ill-equipped to make the proper medical and financial decisions required. As a result, our loved ones either don't receive the care they need or if they do they pay an inordinate amount of the family savings to pay for it.
Life care planners remain involved, making those decisions for you and anticipating what you will need down the road. They adjust your life care plan accordingly and pursue the best methods to pay for it.
"We provide what the aging population in this country needs and we do it well," says attorney Paula Almgren, and founder of Almgren Law in Lenox. Almgren is one of the few elder law firms in the country with a registered nurse and a public benefits coordinator on staff. They also provide life care planning, including a veterans benefits coordinator for those who might qualify for aid and attendance and other veterans benefits.
Why should I, a financial columnist and registered investment adviser, be so concerned and involved in this area? After all, the traditional role of a money manager has been to protect a client's money, and when possible, earn a reasonable return, so that our clients can retire successfully. The answer should be obvious.
In my experience, if just one member of a family develops a debilitating illness, or is hospitalized for an extended period of time, or enters a nursing home, or needs 24-hour nursing care, a life-time of savings can disappear in a span of a few years. It is my responsibility to protect my clients from all financial pitfalls, not just the financial markets.
I believe that as time goes by, more advisors will realize that the biggest risk to our client's retirement and well-being is not a downdraft in the stock market. It is the far more serious potential downdraft created by a lack of planning in elder care, estate planning and all of the other areas I mentioned and write about.