Protecting Spouses of Medicaid Applicants: 2023 Guidelines

Closeup view of senior couple clasping each other's hands.The Centers for Medicare & Medicaid Services (CMS) has released the 2023 federal guidelines for how much money the spouses of institutionalized Medicaid recipients may keep, as well as related Medicaid figures.

What Are Spousal Impoverishment Rules?

Spousal impoverishment is a concern for older couples when there is one spouse who requires long-term care and applies for Medicaid.

Before the federal government enacted spousal impoverishment protections, many healthy spouses faced poverty when their partners needed long-term care. The spousal impoverishment rules are based on the idea that spouses will provide for each other.

Community Spouse Resource Allowance

In 2023, the spouse of a Medicaid recipient living in a nursing home (called the “community spouse”) may keep as much as $148,620 without jeopardizing the Medicaid eligibility of the spouse who is receiving long-term care.

Known as the community spouse resource allowance (CSRA), this is the most that a state may allow a community spouse to retain without a hearing or a court order. While some states set a lower maximum, the least that a state may allow a community spouse to retain in 2023 will be $29,724.

Monthly Maintenance Needs Allowance

Meanwhile, the maximum monthly maintenance needs allowance (MMMNA) for 2023 will be $3,715.50. This is the most in monthly income that a community spouse is allowed to have if their own income is not enough to live on and they must take some or all of the institutionalized spouse’s income.

The minimum monthly maintenance needs allowance for the lower 48 states will be $2,288.75 ($2,861.25 for Alaska and $2,632.50 for Hawaii) until July 1, 2023.

In determining how much income a particular community spouse is allowed to retain, states must abide by this upper and lower range. Bear in mind that these figures apply only if the community spouse needs to take income from the institutionalized spouse.

According to Medicaid law, the community spouse may keep all their own income, even if it exceeds the maximum monthly maintenance needs allowance.

The new spousal impoverishment numbers (except for the minimum monthly maintenance needs allowance) take effect on January 1, 2023.

Home Equity Limits

In 2023, a Medicaid applicant’s principal residence will not be counted as an asset by Medicaid if the applicant’s equity interest in the home is less than $688,000. States have the option of raising this limit to $1,033,000.

Reach out here to the MSW team: Amy Stratton or Kristen Prull Moonan

Does Medicare Pay for Assisted Living?

Physical therapist working with senior woman using a walker.Assisted living facilities support older adults with daily living while fostering their independence. Individuals who do not require round-the-clock nursing but need help with everyday activities like bathing, housekeeping, medications, and meal preparation can benefit from assisted living.

Some seniors choose to move into assisted living following a frightening event, such as a fall. They want to live autonomously but may feel unsafe in their homes.

Averaging $4,500 per month, assisted living can be expensive. Those considering assisted living might wonder whether Medicare, a federal health insurance program for qualifying adults aged 65 or over, will cover the cost.

Traditional Medicare covers only certain health services to those residing in an assisted living facility. Meanwhile, some Medicare Advantage programs may only pay for services that help people remain in their homes.

Does Traditional Medicare Cover Assisted Living?

In short, no. While traditional Medicare supports older adults’ medical needs, it does not apply to most assisted living expenses. Assisted living facilities help residents with everyday, nonmedical tasks, which Medicare typically does not include.

Medicare Part A insures people for hospital stays and up to 100 days in a skilled nursing facility. Skilled nursing facilities provide 24-7, short-term nursing care. Because they deliver medical care, they are distinct from assisted living facilities, which offer custodial or daily life care.

Medicare Part B pays for medical fees for outpatient care, and Part D covers prescription drug costs. Most assisted living expenses do not fall under Medicare Part A, B, or D.

However, traditional Medicare may cover specific medical costs for people in assisted living. Expenses Medicare may cover include:

  • Physical therapy
  • Specific health services like changing sterile dressings
  • Preventative health services like vaccinations
  • Health care transportation

Does Medicare Advantage Pay for Assisted Living?

Private insurance companies that contract with traditional Medicare sell Medicare Advantage plans. Like original Medicare, these plans typically do not cover monthly assisted living bills.

Certain Medicare Advantage plans may offer supplemental home care benefits that help people continue living independently, albeit in their own homes rather than a designated facility.

The services available through select Medicare Advantage programs may include home modifications like wheelchair ramps and bathroom safety grab bars; in-home assistance with daily tasks; and transportation to the hospital and the pharmacy. Adult daycare is also available through some Medicare Advantage plans.

Seniors looking to live on their own might consider enrolling in a plan that includes services that support autonomy. Many programs are available, and the coverage that is open to you depends on where you live. The terms of Medicare Advantage plans vary. Review your plan options and speak with an attorney before deciding whether to enroll in a Medicare Advantage program.

Does Medicaid Pay for Assisted Living?

Unlike Medicare, Medicaid generally will pay for some of the costs of assisted living. Medicaid is a joint federal-state health insurance program for low-income people, including older adults. Although it does not cover room and board for assisted living, it may help pay for personal care services, on-site therapy services, and medication management.

Before deciding whether to move into an assisted living facility, reach out here to the MSW team: Amy Stratton or Kristen Prull Moonan

Getting Medicare Food Benefits

Person Doing Shopping For Elderly Neighbor.As people age, accessing healthy meals can become more challenging. According to Feeding America, one in five older adults was food-insecure in 2020. Some older adults struggle with affording healthy foods, whereas others have difficulty going to the grocery store and preparing meals when recovering from an illness or injury.

Although original Medicare does not offer food benefits, some Medicare Advantage plans provide a grocery allowance or cover meal delivery. Some programs also include nutrition education and cooking classes.

Certain Medicare Advantage plans may provide Part C food benefits in addition to Part A hospital, Part B medical, and Part D prescription drug coverage. They may also supply vision, dental, and hearing coverage. The Medicare Advantage plans available to you depend on your state.

Medicare Advantage

Medicare Advantage differs from traditional Medicare, as private companies contract with Medicare to offer Medicare Advantage plans. Plans vary, and finding insurance that fits your unique needs is essential.

Potential enrollees should also be wary of predatory marketing practices and evaluate their options before committing to a plan. Even if you qualify for a Medicare Advantage plan with food benefits, traditional Medicare could be a better option for you, depending on your circumstances.

Special Needs Plans

Special needs plans, which tailor membership to beneficiaries who meet specific criteria, offer grocery and meal benefits options.

Qualifying for grocery benefits through a special needs plan generally requires an individual to have an underlying condition. Examples of conditions that can qualify a person for Medicare Advantage food benefits include diabetes, cancer, heart disease, kidney disease, end-stage renal disease, arthritis, an autoimmune disorder, and obesity.

Grocery Benefits

When Medicare Advantage plans have grocery benefits, they typically give beneficiaries a card that they can use to check out at approved stores like Kroger and Walmart.

The benefits only cover whole foods such as vegetables, legumes, meat, and dairy, as well as pantry staples and water. Only covered food items can go on the card. Enrollees must pay out of pocket for soda, baked goods, and processed foods like chips.

Meal Delivery Services

Instead of grocery benefits, some Medicare Advantage Part C plans cover meal delivery services. Meal delivery services can benefit those who face challenges getting to the grocery store and preparing meals. A service must meet Medicare’s nutritional guidelines for Medicare Advantage to cover it.

Many Medicare Advantage plans only supply meal delivery for a set period. This type of plan can suit those discharged from a hospital or skilled nursing facility who only need help with meals for a set time.

Less common is long-term meal delivery coverage for those homebound with chronic medical conditions.

Other Meal Delivery Options

For older adults who do not qualify for a special needs program with meal benefits or who do not elect to enroll in original Medicare, alternative meal resources are available.

  • Meals on Wheels is a federally funded meal delivery program for people aged 60 and above who meet location-specific eligibility requirements.
  • You use the Administration for Community Living’s Elder Care Locator to find meal delivery organizations.

Speak with your attorney to access your options before selecting a Medicare Advantage program with grocery or meal benefits.  Reach out here to the MSW team: Amy Stratton or Kristen Prull Moonan

Pros and Cons of a Medicaid Asset Protection Trust

Bags of money balanced on a scale against family members inside house.A Medicaid Asset Protection Trust (MAPT) is one option a person may consider to protect their assets from Medicaid and nursing homes or long-term care.

A MAPT is an irrevocable trust created during your lifetime. The primary goal of a MAPT is to transfer assets to it so that Medicaid will not count these assets toward your resource limit when determining whether you qualify for Medicaid benefits.

However, creating an irrevocable trust comes with a certain lack of control over the assets you transfer to this trust. Before making such a significant decision, consider some pros and cons to see if this long-term care strategy is right for you.

Benefits of a MAPT

1. You Can Still Benefit From the Assets of a MAPT

Although transfers of assets to a MAPT cause you to relinquish your ownership and control of them, the finality of the arrangement is not as harsh as it sounds.

In creating a MAPT, you select a person (trustee) who manages the trust assets for your benefit. So, if you transfer investment accounts to the MAPT, you can still receive the income generated from these investments. If you transfer your home, you can still live there. In exchange for giving up control of your assets to a MAPT, your assets no longer count against you for Medicaid eligibility purposes.

2. Your Assets Are Safe From Medicaid and Other Long-Term Care Creditors

Once your assets are in a MAPT and other criteria are met, Medicaid can’t seize them or ask you to spend them down to pay for your nursing home or long-term care costs. These assets also are not subject to Medicaid’s estate recovery program.

As a result, your heirs can benefit from the assets without the interference of Medicaid or liens it could otherwise file against your estate after you pass.

3. You Can Choose Your Beneficiaries

A MAPT also functions as an estate planning tool. This is because you can designate who receives what remains of the trust upon your passing. The beneficiaries you choose will receive the assets per the terms of the trust agreement, and the chances of a probate court getting involved are diminished.

In addition, you may be able to retain what is called a “limited power of appointment.” This allows you to change who the beneficiaries of the MAPT will be, should your wishes or family circumstances change.

4. Assets Are Protected From Your Beneficiaries’ Creditors

Even though you can designate a MAPT’s beneficiaries now, those beneficiaries do not have full access to the trust’s assets because of how it is structured. This also means their creditors do not have access to it. And, if your child is a beneficiary and is going through a messy divorce, neither does their spouse. You can also designate how bequests to beneficiaries can be used.

5. Protection From Capital Gains Taxes

A properly drafted MAPT preserves the full capital gains tax exclusion on the primary residence (currently $250,000 per spouse). Later, when a person’s beneficiaries sell the home, it would be valued at the market price at the date of gifting and not at the original purchase price. This can avoid or significantly minimize the capital gains tax that your heirs may owe.

Drawbacks of MAPTS

1. Timing Is Everything

For a MAPT to function as intended, it needs to be created in advance to avoid the Medicaid lookback period. In most states, this is five years for nursing home or institutional care. In some states, there may also be a lookback period for community Medicaid care (home aides, local programs, etc.).

If less than five years have elapsed since you created your MAPT, you may still be responsible for some or all of your long-term care costs until sufficient time has passed.

2. Income From MAPT Is Countable by Medicaid

Although assets in a MAPT may not be “countable” by Medicaid toward your resource limit, these assets may still generate income. If this income is payable to you, it may cause you to exceed the income limit permitted in your state.

If this happens to you, you may have other options, such as utilizing a pooled income trust, or may decide you will contribute partially toward your care.

3. Giving Up Control Is Non-Negotiable

A trust will not qualify as a MAPT if you retain control other than the limited power of appointment that may be permitted in your situation. You must accept that a person you select to act as trustee will manage the trust, distribute funds and income from the trust, and also be the effective owner of the assets.

In addition, creating a MAPT but not transferring assets to it is ineffective. You need to fully commit to the concept for it to benefit you.

4. Setting Up a MAPT Is Costly

Creating and implementing a MAPT is a complex legal task requiring many hours of work and expenditures made on your behalf. In addition, because MAPTs are tied to individual state and federal laws, the expertise of a qualified Medicaid attorney is essential.

You should expect that this expertise comes at the cost of several thousand dollars or more. However, your potential savings could be exponentially greater for you and your family. For this reason, the price is often well worth it.

5. Potential Effects on Care

It’s important to realize that while the MAPT strategy is designed to preserve assets and wealth, it assumes that a person will rely on Medicaid to pay for a portion of their care. However, Medicaid does not cover all facilities. For example, many assisted living facilities are not licensed as assisted living programs and only accept private pay residents. Thus, relying on Medicaid could affect the choice and quality of care a person may receive.

The pros and cons discussed above are not exhaustive, and there may be other ones that apply to your situation. Investing in a MAPT is a highly fact-specific process, and MAPTs are not suitable for everyone.

You should speak with your attorney to discuss how a MAPT may affect other benefits you receive, your overall estate plan, its tax consequences, and whether it is right for you.  Reach out here to the MSW team: Amy Stratton or Kristen Prull Moonan

After a Dementia Diagnosis: Preparing for the Future

happy multiethnic senior couple.A diagnosis of dementia, a category of diseases affecting memory and thinking that includes Alzheimer’s disease, can feel overwhelming and upsetting. You might worry that you will lose control over your life and ability to make your own decisions. Fortunately, receiving a diagnosis of dementia or Alzheimer’s does not mean that you cannot execute legal documents or make decisions about plans for your future finances and health care.

People with dementia can execute legal documents to plan for their futures when they have the mental state — or capacity — to do so. Capacity refers to your ability to understand the contents of a legal document, such as a will, and know the consequences of executing it. If you know who your family is, understand your assets, and comprehend your will, you can execute a valid will and plan for the distribution of your estate after your death, provided you understand what you are signing and its effect on your life.

The following can help you in planning where you wish to live, what kind of care you receive, and what happens to your assets if you get severely ill or pass away.

Health Care Power of Attorney

Consider appointing a health care agent to make medical decisions if you become incapacitated. You can name a health care agent using a health care power of attorney, sometimes called a medical power of attorney or a durable power of attorney for health care. Your health care agent can make medical choices if you can no longer do so.

Picking someone you trust, such as a responsible child or spouse, or another family member, can give you peace of mind that they will have your best interests and desires in mind when they make decisions. For instance, dementia patients who prefer receiving in-home care can express this wish to their agent.

In the power of attorney document, you can also state your intentions regarding health care and limit your agent’s capabilities if you wish.

Living Will

For an added layer of protection, you can also draft an advance directive or living will that states your desires regarding medical treatment if you are unable to communicate with your physician. Your living will can express whether you want treatment to prolong your life.

Financial Power of Attorney

Using a financial power of attorney, known as a power of attorney for property, you can select a trusted individual to handle your financial affairs if your disease progresses such that you can no longer make financial decisions. Your financial agent can manage your money and pay bills on your behalf, but they cannot use your money for themselves.

In the power of attorney for property document, you can restrict your agent’s powers. For instance, a person might specify that the agent can manage personal accounts, but not sell the family home.

Long-Term Care Planning

After a dementia diagnosis, consider whether you would like to receive long-term care at home or in a facility, and whether you intend to apply for Medicaid or long-term care insurance. If you want to apply for Medicaid, you might need to prepare your finances to become eligible.

Last Will and Testament

Making a last will and testament, also known as a will, can help ensure your assets go to your family and friends when you pass away. You can determine how much of your money each beneficiary will receive and make bequests to individuals. For example, if you have items of sentimental value, you can leave them to specific people. Without a will, your assets will transfer to your heirs according to the law in your state.

Meet with you attorney to discuss your plans for your future. Reach out here to the MSW team: Amy Stratton or Kristen Prull Moonan

For additional support and to learn more about Alzheimer’s disease and related disorders, reach out to your local Alzheimer’s Association chapter.

Will Medicare Pay for Housekeeping Services?

Bath towels of different colors folded in basket.Medicare is federal health insurance for people over 65, some younger people with disabilities, and those with end-stage renal disease. Coverage of housekeeping services under Medicare can depend on several factors.

Coverage Under Original Medicare?

Medicare is comprised of Part A and Part B coverage. It is often referred to as “original Medicare.”

Part A is free for most people and covers a certain number of days related to hospital inpatient stays, care in a skilled nursing facility, hospice care, and some home health care.

Part B covers doctors’ services, outpatient care, medical supplies, and preventive services. There is a monthly premium for Part B Medicare, plus cost sharing of any care received pursuant to Part A or B.

Original Medicare does not generally cover housekeeping services. Original Medicare labels these services as “homemaker” services, which also include shopping, cleaning, and laundry. If you cannot clean your home for medical reasons, then these costs would be out of pocket.

Coverage Under Medicare Advantage?

However, some Medicare Advantage plans may cover cleaning services. A Medicare Advantage Plan — also commonly referred to as Medicare Part C — is another way to get your Medicare coverage, except through a private insurance company. Many Medicare Advantage plans will cover things original Medicare may not cover and provide additional benefits. However, these companies must follow the rules set by Medicare.

Medicare now allows these private insurers to pay for some limited housecleaning if it is linked to a specific health issue. For example, if you suffer from asthma or breathing conditions, these plans may cover filtration or air cleaners, periodic washing of linens, vacuuming and carpet cleaning, and other similar services. If you suffer from an immune deficiency condition, it may be possible to get coverage for periodic disinfectant cleaning services. However, ongoing or regular services are not likely to be covered.

A senior’s eligibility for Medicare Advantage plan options will depend on what plan options are offered in their area. For more information on Medicare coverage, reach out here to the MSW team: Amy Stratton or Kristen Prull Moonan

MSW Recognized in Tier 1 by Best Law Firms/US News & World Report

We are proud to share  the news that our firm has been recognized in Tier 1 by Best Law Firms  — in conjunction with U.S. News & World Report — in the practice area of Closely Held Companies and Family Business Law.

The U.S. News – Best Lawyers® “Best Law Firms” rankings are based on a rigorous evaluation process that includes the collection of client and lawyer evaluations, peer review from leading attorneys, and review of additional information provided by law firms as part of the formal submission process.

The professionals at Moonan, Stratton & Waldman organize and maintain your business entity, whether it be a for-profit corporation, limited liability company, general or limited partnership, or a non-profit corporation.

Learn more here.


5 Smart Estate Planning Strategies for High-Net-Worth Families

Smiling multigenerational family in vineyard.If you are a high-net-worth individual, it’s essential to have a comprehensive estate plan in place. However, every family’s circumstances are unique, and there is no one-size-fits-all solution for estate planning.

Below are five estate planning strategies that may be right for you:

1. Make Sure You Have An Estate Plan

For higher-net-worth individuals or families, it is essential to have basic documents in place, such as a will, power of attorney, and advance directives. However, it is equally important to consider whether you need to take additional steps to avoid estate taxes or ensure long-term care, should you need it.

Start planning sooner rather than later. More options are available to you when you have time on your side.

2. Consider Options to Avoid Estate Taxes

There are numerous ways to avoid estate taxes, many of which require you to make an “irrevocable” transfer of your assets. This does not mean you cannot benefit from the income generated by your assets, but rather that you title the assets to a trust managed by someone else.

Here are some examples of options that can help lower your estate taxes and accomplish other goals you may have:

  • Charitable Remainder Trusts: These irrevocable trusts can pay you or beneficiaries annual income from assets you donate to the trust. The remainder of the assets will go to one or more charities you designate. They can help you plan for retirement, reduce your taxable estate, and accomplish your philanthropic goals.
  • Spousal Lifetime Access Trusts: A spousal lifetime access trust (SLAT) is one way to transfer your wealth to the next generation. In a SLAT, a spouse makes a gift into the trust to benefit the other spouse. As a result, this removes the gifted asset from the spouse’s combined estates.This allows you to take advantage of the current

    federal lifetime gift and estate tax exclusion (currently $12.06 million per person, or $24.12 million for married couples), which is set to expire in 2026. The spouses can still retain some access to the assets. Any post-gift appreciation in value is excluded from federal taxation for both spouses’ estates. However, federal rules permitting this trust will sunset on December 31, 2025.

  • Grantor Retained Annuity Trusts: A Grantor Retained Annuity Trust (GRAT) is a trust through which you may transfer appreciating assets to your heirs and minimize gift or estate taxes. High-net-worth individuals and couples can use GRATs to freeze the worth of their estates and transfer any increase in the value of their assets to their loved ones, all with minimal tax consequences. A GRAT is also another way for you to plan for your retirement.To establish a GRAT, a donor creates a trust for a certain number of years and, during those years, is paid an income stream or annuity from the GRAT. When the GRAT ends, whatever assets remain will pass to your chosen beneficiaries. If certain conditions are met, you can minimize estate and gift taxes.

3. Engage in Gift Planning

Gifting wealth up to your lifetime exclusion may be a smart estate planning strategy for many high-net-worth families. This allows you to gift up to your lifetime exclusion before your death and not owe any gift tax on gifted amounts until you exceed this threshold.

Based on 2022 gift tax exclusions, a married couple could give away up to $24.12 million without tax consequences. In addition, after they exceed the lifetime amount, they can continue to gift at the annual limit of $16,000 (as of 2022) every year without owing gift taxes.

However, you should gift cautiously while fully informed of your state’s rules. Many states have their own rules regarding gift and estate taxes, which may be incompatible with federal tax rules.

4. Invest in Life Insurance

Another strategy to consider is investing in a good life insurance policy. Life insurance can be used to pay estate taxes and to devise assets or specific amounts to your loved ones.

For example, if a large part of your family’s estate will be illiquid assets, such as real estate or a business, your estate could owe more in taxes than is available to it in liquid funds. Your estate can use the proceeds of a life insurance policy to pay these taxes, so your heirs do not have to sell a family business or investment properties.

You can also use your life insurance policy to “equalize” inheritance. For example, perhaps one child is better suited to run a family business. In this case, you could leave this child your business and another child a life insurance policy equal to the company’s value.

5. Don’t Forget About Portability

Consider whether you may qualify for portability before the current federal estate and gift tax exclusions expire in 2026. If your spouse passed away within the past five years, you might be able to file an estate tax return and transfer their unused estate tax exclusion to yourself. So even if you do not pass away until after 2026, you may be able to add millions in tax exclusions to the benefit of your heirs.

You must follow specific procedures to elect “portability” of your spouse’s unused gift and estate tax exemption, and there are exceptions to which estates may qualify. However, if this is an option in your family’s case, it could result in hundreds of thousands of dollars in tax savings.

Speak With a Professional

In considering all the estate planning strategies available to you, it is important to speak with an experienced estate planner. Keep in mind, too, that when it comes to trusts, each state has its rules and laws that govern which ones are or are not permissible, in addition to varying estate or gift tax rules.

Your estate planner can help determine which strategy is best for your circumstances. Reach out to the MSW team: Amy Stratton or Kristen Prull Moonan

No Will? You’re Putting Your Kids at Risk

Actress Anne Heche at NBCUniversal's 2014 Summer TCA Tour.Many people delay the conversation or thoughts of having to prepare a will. Confronting the possibility of one’s death is not easy. However, as the recent death of Anne Heche shows us, not having a will can place a significant burden on your children and cause undesirable complications. Even if difficult, planning ahead may be a better solution than the alternative.

What Happened With Actress Anne Heche?

Anne Heche’s case is a good example of why a person may want to consider creating a will sooner rather than later. Heche was divorced with two children from different relationships when she passed away. Her eldest son is 20 years old, but her younger son is still a minor.

Although they are assumed to be her sole heirs, only her oldest son is of age to administer her estate. He has filed a petition for a guardian ad litem to be put in place to protect his younger brother’s interests. The guardian ad litem may be a financial burden to Heche’s estate, and the costs of securing this professional will potentially reduce the assets available to her sons.

Even though her eldest son is dealing with his mother’s estate, this is undoubtedly very difficult for a person to go through at such a young age. Heche’s eldest son likely will not be able to do this all on his own and will need the services of a probate attorney — likely further increasing the costs of administering her estate and depleting how much is left for her children.

It has also been reported that an inventory and appraisal of her estate is needed to determine its worth and what assets she had. This process requires further professional involvement and fees that her estate must pay. In addition, it is possible that the father of her youngest son may seek to intervene in the estate’s administration to ensure he is treated fairly. Litigation costs could rack up quickly if there is any disagreement related to this.

Preparing a will and other estate planning documents can make legal proceedings significantly less complex and expensive and keep your situation as private as possible. It can also make it easier for your loved ones to know exactly what you want to happen to your assets and possessions.

Who Inherits When You Die Without a Will?

Many people do not realize that if you pass away without a will, your local state laws on intestacy will determine who qualifies as your heirs and inherits your property.

For example, in many states, if a person passes away unmarried but with children, the children will inherit everything. But what if the person had a long-term partner or was engaged to be married? They may have wanted their significant other to inherit some of their assets, but a “default” state law may lead to a different result. Or, what if you have no living children, siblings, parents, or spouse? Your property may go to the government instead of friends, grandchildren, nieces, or nephews. Having a will prevents these scenarios from happening.

Choose a Guardian for Your Children

Another benefit parents should consider is their ability to choose a guardian for their children in advance.

This matters, for example, when the other parent is not living or cannot be located. If a person does not set forth their wishes ahead of time, multiple parties may step up after a person’s death and argue over who should care for any minor children.

A court may be tasked with making this decision, and it may not be what you would have wanted. This can be expensive, traumatic for all involved, and a long process. Courts will generally try to appoint the individual a person has selected if your wishes are in a will or other planning document.

The Bottom Line

The bottom line is that having estate planning documents in place makes your wishes more likely to be honored and less likely that a court will decide what happens. This is also true where you may be incapacitated and unable to voice your wishes. While Anne Heche’s situation is not unusual, it is avoidable.

For information on preparing a will or other estate planning documents, reach out to the MSW team: Amy Stratton or Kristen Prull Moonan

Photo credit: Mingle Media TV

Majority of Adult Children Cannot Support Boomer Parents, Surveys Find

Boomer dad and GenX son sitting on couch at home and talking.A recent survey by the American Advisors Group (AAG) finds that 55 percent of adult children say they are not financially prepared to help their Baby Boomer parents cope with rising inflation and living expenses.

“Americans want to see their parents age with grace and dignity and have the resources they need to live comfortably, but for many families the current economy is making that difficult,” AAG Chief of Marketing Martin Lenoir said in a news release.

AAG surveyed more than 1,500 adult children, ages 40 to 55, across the country. Known as the “sandwich generation,” this group faces the responsibilities not only of raising their children, but also of serving as caregivers for their aging parents.

Among the survey’s other key findings:

  • More than a third of adult children say they worry that their parents will become a financial burden for them.
  • Nearly 60 percent say they cannot afford any kind of professional elder care for their parents.
  • Yet almost half admit they have never broached the subject of finances with their senior parents.
  • A full 50 percent of them do not know how much debt their parents are carrying.

1 in 3 Adult Children Already Assisting Their Parents Financially

Another survey, conducted in 2020 by GoHealth, Inc., explored GenXers’ and millennials’ involvement in their parents’ financial and health care needs. It found that one in three GenXers and millennials are supporting their parents financially. Nearly the same number are managing, or helping to manage, their parents’ health care.

The survey’s 2,000 GenX and millennial respondents also reported the following:

  • On average, they spend 11.5 hours per week managing their parents’ health care by providing transportation, scheduling doctor visits, and explaining insurance claims. They also estimate they’ll spend 14 to 16 years continuing to do so.
  • 2 in 5 spent more than $10,000 of their own money supporting their parents in 2020.
  • The vast majority (86 percent of GenXers and 82 percent of millennials) worry about having enough money to support themselves and their parents.

Squeezing the Sandwich Generation

Adult children will continue to feel the pressure for the foreseeable future. Every day, on average, 10,000 Boomers (those born between 1946 and 1964) reach age 65, and another 10,000 of them turn 75. According to research by the Blackstone Group, an independent research firm, nearly 80 percent of middle-income Boomers do not have any savings designated to cover their retirement care.

Meanwhile, 30 million Boomers retired from the workforce amid the COVID-19 pandemic. Saddled with college debt, as well as rising inflation and housing costs, those GenXers and millennials who still depend on their parents for financial assistance or housing may no longer be able to count on that support.

Have ‘The Talk’

It’s important for families to have an honest and respectful financial conversation before a medical event occurs or the need for care arises. Talking about money with aging parents can be a delicate matter, but it’s necessary to understand both the degree of care that may be needed and the financial resources available to provide it.

For help planning for the future of your Boomer parents, or for your GenXer and millennial children, reach out to the MSW team: Amy Stratton or Kristen Prull Moonan