The Manchester Living Podcast’s Brian Levy recently hosted Jeff Kort, a Dallas-area financial advisor, and myself, Steve Holman, to discuss the ins and outs of elder law. You can watch the video right here, or look below for 5 important takeaways from our conversation.
5 Takeaways About Thinking Ahead—From a Financial Planner and an Elder Law Attorney
1. Pay Attention to Family Dynamics
It is essential to pay attention to family dynamics as you make your estate plan. Which children live nearby their older parents? Who knows these parents best? Who is willing to take on more responsibility? Is there tension in the room when discussing certain topics? All of this information can help families create the best individualized long-term care or retirement plan.
2. Keep Older Adults’ Independence in the Picture
We might think of independence as the ability to drive, to prepare food, to keep the house orderly and pay bills. It can be scary to lose this kind of independence. Yet maintaining independence can also mean so much more. Older adults can maintain dignity and a sense of control through estate planning. A solid estate plan reflects your goals and values, and ensures that your wishes are carried out.
3. If You Live Faraway, a Trusted Neighbor Can Help
Estate planning and long-term planning need not involve only family members. Sometimes, a trusted friend or neighbor is the best person to check in on an older adult, or even manage some aspects of care. This fact is especially important when grown children live far away, in other states. Having flexibility about who to involve in your particular context can lead to a better quality of life.
4. Understand Your Financial Options for Long-Term Care
Paying for long term care out-of-pocket? With long-term-care insurance? Medicaid? How do you know which to choose? The answer can depend on not only your current financial situation but also on your extended family and friend network.
Generally, if you have less than $300,000 in assets, Medicaid will make the most sense. In the $300,000 to $3 million bracket, insurance can be a wise choice. And for those with more than $3 million in assets, this decision will depend on several variables.
Of course, if you have a family member or friend who can provide caregiving, the equation could change. And keep in mind VA benefits as an option for Veterans—these VA benefits require advance planning as well to leverage their value. The bottom line is that it’s worth a conversation with a trusted advisor before the need for care arises.
5. An Expert Can Help You With Unknowns
You never know when an emergency will arise. It’s hard to account for all the uncertainties of life, not to mention all the different options a good estate plan can leverage. As an estate planning attorney and a financial advisor, it’s our job to know these things. We can offer you advice that can save you money and headache.
Do you need help with your estate or with long-term care planning? The elder law attorneys at Holman Law understand elder law and can ensure you have everything you need. Contact us today to set up an appointment.
Steven C. Holman
Estate Planning and Elder Law Attorney
I love to spend time with my wife and three children and serving the Dallas Fort Worth community. I provide clients with a wealth of knowledge and experience navigating each individual’s Estate Planning needs including Trusts, Probate, Elder Care Law, and Long Term Care Planning. My law firm specializes in assisting clients with complicated legal forms and qualifying for the maximum Medicaid and Veteran (VA) benefits in Texas.
Video Interview Transcript
Episode 5: Elder law and what to do to have all affairs in place before it’s too late
Interviewer: Brian Levy, Manchester Living Podcast
Jeff Kort, Certified Financial Advisor, Munn & Morris Financial Advisors
Steven C. Holman, Estate Planning and Eldercare Attorney, Holman Law
Brian Levy Hi. I’m Brian Levy. I am a partner at Manchester Living and the host of the Manchester Living Podcast. The purpose of this podcast is to help people navigate the complex maze of eldercare. There is a lexicon of eldercare terms on our website at manchesterlivingpodcast.com. Today’s new and noteworthy in recognition of the one-year anniversary of the pandemic, I would like to read a poem called The Little Boy and the Old Man by Shel Silverstein. Said the little boy, sometimes I drop my spoon. Said the little old man, I do too. The little boy whispered, I wet my pants. I do too, laughed the old man. Said the little boy, I often cry. The old man nodded, so do I. But worst of all, said the boy, it seems grown-ups don’t pay attention to me. And he felt the warmth of a wrinkled old hand. I know what you mean, said the little old man. Whether it’s a neighbor or a client or a friend or grandparent, reach out to your elders. Say hi. Let’s jump in. Today’s topic is taking care of business, elder law, and what to do to have all of your affairs in place before it’s too late. We identified the need to discuss both the value of planning ahead as well as the need for expertise in crisis planning. There are three parts of a plan. The goal, the plan, and the execution. Life expectancy is on the rise, in part due to modern medicine. In 1945, the average person lived to be 65 years old. In 1990, it went up to 75. And in 2020, 95 old. 70% of people over 65 will need some form of long-term care during their lives. We started an advertising campaign recently called Let’s Have the Talk. And it’s much like we had the talk with our children about the birds and the bees, now it’s time for adult children to have the talk with our parents about elder care. My guests today are Jeff Kort with Munn & Morris Financial Advisors, certified financial advisor, and Steve Holman with Holman Law: Estate Planning & Elder Care Attorney. I’m excited to have you all here today.
Jeff Kort Thank you.
Steven C. Holman Yeah, thanks for having us.
Brian Levy So let’s talk about how to have the talk. Discuss with family and friends first, correct?
Jeff Kort Definitely. It’s not a limitation of who in the family or which friends you’re going to pick. You want to make sure that your wishes are explained. Right? Sometimes that talk comes from the adult children telling their parents. More often, the parents already have a plan and they’re going to tell their kids when they’re ready to have that discussion and what they’re going to talk about.
Brian Levy And the battle ensues.
Jeff Kort It can. It certainly can. And I would say it can be lots of different people who might be in that conversation besides just the adult children and the parents.
Brian Levy So let’s address this. Steve, who should be part of that conversation?
Steven C. Holman Yeah, so I see two sets of families in my office. One are the families that have planned ahead, and the other group is the family in crisis. And the options are limited for those. So the folks who should be in that conversation are the ones who are going to be making decisions or the ones who have the ability to monitor and be responsible for those parents.
Brian Levy So let’s talk about responsibility. There’s medical power of attorney, fiduciary power of attorney. And how is that explained to the family and who decides?
Steven C. Holman Yeah. So typically when a family comes to my office, they’ve got that goal in mind. Hey, my parents can no longer live independently. There’s a potential for losing the ability to take care of themselves. There’s a risk, a danger. And so they need to be able to access potential assets to pay for that care. They need to be able to make decisions. So the medical power of attorney, a financial power of attorney, a health directive for an end of life decision making, are some of that kind of the foundational documents that we need to then allow them to get in touch with folks like Jeff to actually be able to use those assets for the good.
Brian Levy Great. So who do you include in that conversation?
Steven C. Holman Yeah. So it’s usually adult children. It can also be a healthy spouse. It could be siblings. An often common person is a neighbor, someone who is kind of on the lookout for maybe an individual who doesn’t have family close by. And it’s really anyone that has genuine care and anyone who has a sense of responsibility and acumen to kind of be responsible for this person.
Jeff Kort We don’t want to have five of the same power of attorney, right? We don’t have people fighting over that spot. But at the same time, we may want to have more than one person know who’s in charge and what they’re in charge of, making sure that delineation is clear.
Brian Levy What is the best way to initiate that conversation?
Jeff Kort I don’t know that there’s one best way, but certainly, approaching an attorney or a certified financial planner is a good way to get that started to know where that goes. Sometimes it’s going to be the adult parent who says, “I want to have this discussion with these people and I want my ground rules in place,” right? Other times and oftentimes, someone in their 40s, we talk about a 47-year-old. When you’re 40 as an adult, you might talk to your parents in their 70s. Here we should be having that conversation. They may not be ready for it. They may not want to talk to you about it. But that’s a good time to have that discussion. And when the 40s are making that comment and maybe mom and dad are listening or not, they may find out right away. We already have that in place or we don’t want to have that discussion with you. We’re actually going to use our next-door neighbor who is local that we’ve trusted and known for many years.
Steven C. Holman A lot of this is the dynamic between the family members. And that history goes back since the day they were little kids. And I always will mention to my clients, you know better than I do, how to talk to your mom or your dad. Great examples are parents who have not shared their financial condition with their children for many years, and they’re very reluctant to not only give up that information but also to give up their own independence. And so one strategy may be to tell them, “Hey, if you do nothing, here are the alternatives. This is what this looks like if you do no planning. Do you want that? If you don’t, then these are some steps we’re recommending now.” The power of attorney does not always mean that they are giving up authority. They’re just getting another set of eyes to look over their shoulder. And that can be very valuable for them as they age.
Brian Levy Sure. And you hit on such a keyword. It’s independence. And adult children with aging parents struggle with, they want to keep their parents independent and parents want to be independent. But there’s a balance. So how do you address that?
Steven C. Holman Yeah, it’s tough. I think our minds are different than our bodies. What’s that saying? Our minds are writing checks our bodies can’t cash. So that’s going to be a dynamic at some point. And I think the independent aspect, the way I try to lean into that from a mindset standpoint is you are taking control of your future. This is you exerting your independence by making these plans today. Because at some point for all of us, we’re not going to be in position to do that.
Jeff Kort Sure. Yeah, I would say that in general, when we’re making those decisions, we need to make sure that we’re clear about who can make that decision when. Right? So while I’m still independent that I’m getting to do that for myself. And the adult children may want to choose to help find out that we’re not as independent as we think we are and that can cause complications. So having those conversations regularly and staying open on both sides is important. Some adult children are looking for when mom or dad is slipping a little bit. “Oh, you forgot that? We need to take over the power of attorney.” And that’s not how that typically should work.
Brian Levy Sure. Yeah, so what are some cognitive and physical clues that it’s time to start having that talk?
Jeff Kort That’s a great question. So hopefully, we’re visiting in person. Not that it’s required, but when we’re in person or we see the room or the house where they’re living, is it clean? Is it cluttered? Are we seeing any things that are looking like they’re not as consistent as it used to be? Those are good ways to start out. And then also conversations via Zoom, on the phone, live. You need to be watching for what kinds of changes are happening in their lives that they can offer. And mom and dad are probably looking at their kids the same way. “Do you see anything like that?” So they want to make sure there’s–
Brian Levy Sure, and you’re probably strategic in scheduling the meetings where you probably prod them to say, “Let’s meet at your house,” so you can get a lay of the land.
Jeff Kort I love that. It’s not required, certainly. But when they’re in their own environment, they’re much more comfortable, right? That’s important. And then on the other side, we can also see what’s going on a little bit easier as well.
Steven C. Holman Yeah, absolutely. Financial planners, accountants, trusted advisers that meet with individuals regularly can be a great resource for the family who may not be local. And they can, so long as there is a power of attorney in place, reach out to the family and say, “Hey, we’ve noticed this. Here’s a heads up.”
Jeff Kort We use a term called trusted contact in our industry where they don’t have power of attorney, but if dad seems like he’s slipping and he’s forgetting some stuff, I can call the trusted contact and ask if there’s been any changes that they’ve seen. Now, dad or mom or whoever it is would have had to give authorization to that person. But it’s somebody they trust so that they’re not going to be put to pasture or they’re losing power of attorney on their own until that’s occurred.
Steven C. Holman And what happens, what I see in my office around the holidays, Thanksgiving, Christmas, we get the family that’s come in to visit, and they’re like, “There’s been a lot of change here. I’ve talked to them on the phone, but I didn’t realize that the newspaper is not being brought in, that the bills are stacking up. And we’ve got to do something.” And hopefully there’s time, but sometimes there’s not. And that’s where the trusted advisors can come in and kind of be that second set of eyes.
Brian Levy Sure. How is Medicare, Medicaid, and long-term care insurance policies come into play during this whole time?
Steven C. Holman Yeah, do you want to tackle the first? Or do you want me to?
Jeff Kort So long-term care is a place where I play. Medicare and Medicaid. I’m going to pass right over there, although we were–
Brian Levy Playing the same set.
Steven C. Holman It all fits. Sure.
Jeff Kort Yeah, yeah. Exactly. So long-term care can happen in lots of different ways. It’s the idea that we need more help than we can do for ourselves, oftentimes just in custodial activities. “I can’t dress myself,” or, “I can’t get in and out of bed on my own very easily,” the activities of daily living or something that we watch for and we’re careful of. If we have a need like that, we might bring in assistance not different from what Manchester can provide, right? Exactly. And the idea that that can be done know an hour a day or an hour a week or four hours every other day or 24/7, those levels of care that are needed are different for different people at different times. And we want to make sure that we can help with that. And one of the ways that we do that is through insurance policies and through the governmental insurance policies like Medicare and Medicaid.
Steven C. Holman You know, there are three ways to pay for long-term care, private pay, long-term care insurance, and government programs, private pay and long-term care allow for that higher level of care and with most folks preferring to stay at home, those two options allow them to bring it in-home care person, and that’s typically the preference for, not only the individuals, but the family. It creates continuity and a familiar place. And as we really try to start with the planning at those two options, can they afford to private pay? Do they have a long-term care insurance policy because that gives the most options for the best quality of care? And then we plan out and say, “Gosh, if the care is going to last 5, 10 years, how long do our resources last? How long does the policy last?” And then we plan the safety nets of Medicaid, the VA benefits potentially, and just try to kind of plan worst-case scenarios from there.
Jeff Kort On our side, we’re hoping that we don’t get to those two spaces and that we’ve planned for our goals and our needs and our wants to include care for long term.
Brian Levy Sure, I’m glad you brought up VA benefits because I get asked a lot about that. You want to address?
Steven C. Holman Sure, yeah. So VA benefits are a– there’s a pension program for veterans who served 90 days during an act of war period, and those states are established by the VA. A married veteran can receive about $25,000 a month, tax-free that can be applied for long-term care. The surviving spouse is also eligible. The general requirements are military service, a need with assistance for activities of daily living, and then they have to satisfy some financial requirements. There are some ways to legally allow someone to become qualified who may not be qualified on the surface. The nice thing with VA benefits is that those funds get direct deposited into your account, and then they can be used for any type of need or service and that person requires. So it’s very flexible and, again, it can be home care, it can be assisted living. It’s a lot of options.
Brian Levy And tell me about the criteria to be considered for VA benefits?
Jeff Kort Qualify.
Steven C. Holman To qualify the financial requirements?
Jeff Kort Yeah.
Steven C. Holman So there’s kind of a two-prong test. One is you can’t have assets that are accountable by the VA over about 130,000. Okay, now, your primary residence not countable. Your car is not– kind of similar to Medicaid. The income requirement is a little different. So they look at what your unreimbursed medical expenses are. So if you have a long-term care insurance policy, it’s kind of a good idea just to kind of wait–
Brian Levy Not use that, yeah?
Steven C. Holman Yeah, just wait. Save that one for the rainy day. Use the unreimbursed medical expenses against what your income is, and so the VA will say, “Gosh, if you made $3,000 a month, and your unreimbursed medical expenses are $3,000, we show on our calculation of zero net gain. So you’ll be eligible for that full $2,500.” Now, if you are only spending 2,500 a month, and you have a $3,000 in income, you have a $500-gain in the eyes of the VA. They will reduce that pension dollar for dollar. So instead of 2,500, you’re only getting 2,000. So when we try to plan for VA, we want to make sure we can show that unreimbursed medical expenses high as your income. And so that’s part of the planning process to maximize that benefit.
Brian Levy Very interesting. So as an attorney, what haven’t I asked you that I should be asking you?
Steven C. Holman A lot of this– going back to Jeff’s point, it’s getting the right people in place. And then when you have the right people identified, how are they going to have access to your assets? A lot of folks have a DIY approach, where they’re like, “Hey, we’re just going to put each other on these joint bank accounts, and I can write the checks, and we’ll be good.” And that’s how that works, but there’s some risk to that. If you’re on a joint bank account, that other person now is part owner and their creditors can reach those accounts. And that may not be what you plan for. The other issue that comes up is we have a caregiver child who’s close to mom or dad, and they’re involved in the caretaking, spending the money, and you have other siblings who may be out of state, and you’ve got two different stories kind of being created in each of their heads. We have the. caregiver who feels that either they’re the hero or they’re the victim, right? They’ve been forced upon or “I’m doing this for them, and I’ve earned this, and the other children don’t have the full picture.” And when it comes time to administer the estate, there can be some adversarial conversations there about what happened.
Brian Levy So the moral of the story is plan ahead.
Steven C. Holman Plan ahead, have a conversation, make sure that you’re on the same page with your financial adviser, the caregivers, anyone else involved in your process. Yeah.
Jeff Kort Sure. And not just plan ahead but plan and replan often, right? So the plan may change. It definitely will. Right? People come in and out of our lives. Finances make changes. Our health has differences that go over the course of time. And so we need to make sure that we keep those things current. Or we might get divorced or remarried or take on another friend, and there might be financial implications to all of those things as well.
Brian Levy So as the financial adviser, what haven’t I asked you that I should be asking you?
Jeff Kort Well, I think that there’s a great set of information along with long-term care of how we pick what we’re doing and why we choose a policy to work for us or not. I tell folks that if you’ve got less, just make a big heuristic. If you’ve got less than 300 grand or you have more than 3 million, you probably are not a candidate for a long-term care insurance. You probably aren’t going to buy when you lay off 300 because you’re going to spend it down, and we’ll go to one of the other policies. If you have more than 3 million, you may not need to use an insurance policy. You might just do it out of your own resources. That said, between 300,000 to 3 million, there’s an awful lot of people who could use that benefit. And I have a lot of folks who are over $3 million and say, “Yeah, I know I don’t need it for that, but I’m a little more conservative. I’d rather have that.” And so then there are a lot of options over on that high-end side, right? Maybe we buy an annuity or an insurance policy for my life that covers costs that we can borrow from, or we use the long-term care policy. And in a long-term care policy for those folks that fit inside there, there are so many variables associated with it. How much do I need to make it inflate each year? Can I make changes to that? How many years am I going to live, and do I need it to protect for all those things? And so making sure that myriad of options are there are considered very carefully.
Steven C. Holman Sure. Jeff, that’s a good point. We don’t know how long someone is going to need the long-term care, and we don’t know what level they’re going to need it as it goes along. And that’s a challenge when we get folks who are trying to plan a crisis. We just got diagnosed with this condition. They’re going to need assistance with walking. There’s some early-onset dementia, and so we know it’s going to cost us X. I said, “Okay. Well, the doctors told you how this is going to progress over time. What’s the estimate? Are they going to need more services, and how do you factor that in?” And I think that’s a great time to talk to Jeff and understand what the policies cover and what their other assets are doing. And it’s almost a stress test. You’re running a stress test on their assets.
Brian Levy Planning is important. Planning in crisis mode is not advisable.
Jeff Kort It’s tough, right? Emotions are involved and–
Brian Levy You can’t, right? It’s like cramming for a test.
Jeff Kort Yeah, exactly, right.
Brian Levy Not a good idea.
Steven C. Holman Yeah.
Jeff Kort But it happens a lot.
Steven C. Holman It does.
Brian Levy It does. It really does. Because families that I talk to on a daily basis, we talk about, “Well, how do I afford that?” And I tell families, “This is what your rainy-day fund is for.”
Jeff Kort That’s exactly right.
Steven C. Holman Oh, yes. It’s elder care, so.
Brian Levy Very helpful. Thank you both for being here today.
Jeff Kort Sure.
Brian Levy I’m going to move on to the next segment of the show called The Nugget. And I’m really excited to feature Anita Mapungaw for National Caregivers Appreciation Day which was February 21st. Anita is a manager in one of our care homes. And I wanted to recognize Anita and all of the caregivers around the world for being the real angels in our industry.
Anita Mupingo We are spending 12 hours a day with these people who have, I mean, over the year have become like our family because their family was not able to come and see them. And so when you spend that amount of time with somebody, you’re bound to know everything about them and even things that even their daughters and sons and grandsons didn’t even know. And so I think it’s especially important to remember how unique everyone is, especially at our house. We have all ladies. We don’t have any gentlemen just yet, but we know each and every one of them because they’re unique, just like you’re unique, just like Sandy’s unique. I’m unique in my own way. And so we have certain residents that when they’re starting to feel a bit agitated or low when you just play some music that they liked back in the day, music from the 40s or 30s, I mean, you would just see them light up. And we have residence where we have– Dean and Sandy bought us some baby doll, some pretty baby dolls. We have residents that when you just give her the baby doll, they feel like they’re holding their grandbaby or their son. So it’s amazing that when you get to spend this much time with them, you know that Mrs. Smith is– she just wants you to sit with her and just ask her how growing up in Arkansas was. We have a resident that she will talk to you about how she grew up and when she got married, the first car she drove. I mean, just that 15 to 20 minutes of sitting there and listening. I mean, it changes her whole day. It makes her whole day. So it’s just about– I mean, like I said, we spend 12 hours with these ladies every day. And so we’re bound to know what they like and what they don’t like. And so it’s been a blessing.
Brian Levy Anita, we’re real proud to have you on the Manchester team. All right, guys, it’s time for the lightning round. This is one of my favorite parts of the show. Are you ready?
Steven C. Holman Ready.
Jeff Kort As ready as we’re going to be.
Brian Levy Right. Jeff, how long have you lived in Dallas?
Jeff Kort 26 years.
Brian Levy Steve. As an attorney, scale of 1 to 10, how good are you at keeping secrets?
Steven C. Holman I’m a 9.
Brian Levy Nice. Good to know.
Steven C. Holman It’s my kids. I can’t keep secrets from them. I got to tell their mom.
Brian Levy Fair enough, Jeff. Last vacation destination.
Jeff Kort We went to Colorado in August.
Brian Levy Good for you. Where did you go to college, Steve?
Steven C. Holman I went to Willamette University.
Brian Levy Where’s that?
Steven C. Holman Salem, Oregon.
Brian Levy Salem, Oregon.
Jeff Kort Beautiful.
Brian Levy Jeff?
Jeff Kort I’m an Indiana University graduate.
Brian Levy Of course. How many attempts did it take for you to pass the series 7? Bad boy. How long did it take you to pass the bar?
Steven C. Holman I did first time in California and Texas. And I have to say that my wife told me that she was pregnant when I was driving down to Austin to take that ride for that test. So no pressure.
Brian Levy No pressure whatsoever. Exactly. Who is your celebrity crush, Steve?
Steven C. Holman I got to go with my wife. She’s my celebrity.
Brian Levy Wow. Well played. [crosstalk]–
Jeff Kort [crosstalk] my wife, Stevie Nicks. Yeah.
Brian Levy Okay, of course, the music [crosstalk].
Jeff Kort [crosstalk].
Brian Levy Right. Jeff, Mac or PC?
Jeff Kort I’m a PC person.
Brian Levy Steve, surf or turf?
Steven C. Holman I got turf.
Brian Levy Jeff favorite snack food.
Jeff Kort Chocolate, anything.
Brian Levy Chocolate, anything. Steve, second language?
Steven C. Holman No, a little Spanish. That’s about it.
Brian Levy If you could go to space today with no guarantee of returning, would you go?
Steven C. Holman I wouldn’t. I keep it here.
Brian Levy Stay here with the family?
Steven C. Holman Yeah.
Jeff Kort Yeah, not a chance.
Brian Levy I’m shocked. Wow. Both of you, can you write in cursive?
Steven C. Holman Only my name.
Jeff Kort Yes, oh, clearly.
Brian Levy Can you [crosstalk]–?
Jeff Kort My handwriting was bad when it started. [inaudible] that now, but it’s in cursive?
Brian Levy Right. Well, I do the lightning round to give my viewers a better opportunity to get to know you guys. Other than that, what’s the best way for my viewers to reach you, Jeff?
Jeff Kort So you can reach me at my office number. 972-692-0909 or my cell. And I don’t give it all the time, but almost all the time, I do. 9-723-330-809 in this world. Well, we’re not in the office all the time, but I’m pretty accessible.
Brian Levy You are pretty accessible. Steve?
Steven C. Holman Yeah, my office number is the best, 972-474-7828. And you can schedule an appointment with me for free initial consultation.
Brian Levy Very well. Well, thank you guys for being here. I really appreciate it. I am the host of this podcast, and you can see the podcast on Facebook at Manchester Living Podcast. You can find us on the website at manchesterlivingpodcast.com. And, of course, I have a face radio. So you can follow us up on iTunes at Manchester Living Podcast. Thanks for joining us today. If there’s anything I can ever do for you, please don’t go back to Google. Call me. 2-146-499-922. Thanks for joining us. [music]