News & Resources: Blog

Preparing and Reviewing Legal Documents as You Age

Published: November 24, 2022

The concerns you have at 60 are likely to be different from those you had at 40 since many people’s lives follow a predictable pattern. If you had children, they might now be adults. You may be looking at retiring soon, considering the potential for needing long-term care, or leaving your assets to the next generation or a favorite charity.

Hopefully, you started creating legal documents like medical advance directives, trusts, wills, and insurance policies when you were younger. If you didn’t have them drawn up before, don’t worry- you can start now! Turning 60 is a great time to consider creating a plan or revising previous documents.

Long-Term Care Planning

The costs of long-term care can be staggering. According to Genworth, home health aides averaged $61,000 per year in 2021. Meanwhile, a private room in a nursing home averaged $108,000 annually. Unless you are wealthy, you could easily go through all your assets to pay for your care. Spending down your assets leaves you with two problems.

  1. Spending all of your money while still needing years of care, forcing you to rely on Medicaid.
  2. Not being able to leave any assets to heirs. 

What are our chances of needing long-term care? According to the Department of Health and Human Services, someone turning 65 today has a 70% chance of needing some long-term care services in their remaining years. Sixty is a good time to consider purchasing long-term care insurance, setting up a Medicaid Asset Protection Trust (MAPT), or combining both. If you are a wartime veteran, there are additional cash assistance programs available through the Veterans Administration that you may also explore.

By planning before a health care crisis, you have more options for protecting and passing on your assets. A MAPT is a specially designed irrevocable trust. A portion of your estate would transfer to the trust and the remainder would stay in your name or be held in a revocable trust. 

Living Will and Durable Power of Attorney

Doctors and your loved ones want to choose the therapies you would choose for yourself. A living will tells people what treatment you would want in certain situations. A living will can include a Do Not Resuscitate directive, but often it describes other cases too.

Of course, you can’t predict every medical situation that could occur, so some decisions must be made as they come up. A durable power of attorney names a person to make these decisions on your behalf. If you named a person as your medical proxy twenty years ago, the relationship or shared values that brought you together might have changed. You may no longer feel they understand your needs or goals. You can name another person you want acting on your behalf in a durable power of attorney. You can have two different people make financial and medical decisions on your behalf.

Revocable Living Trusts and Last Wills and Testaments

After you pass away, your property transfers to your heirs. However, sometimes this process gets complicated, ruining relationships and costing a lot of money in probate fees. To avoid that happening to your estate, clearly outline who gets what asset and how you want it distributed. For example, if a house is involved, you may want to specify that the heirs sell the property. Or you could say that the house should not be sold and used in another capacity.

A will can include details beyond asset distribution. You could put in burial or cremation instructions if you want a certain type of service, who becomes the guardian of pets, minors, or adults with cognitive impairment in your care.

A trust is a method for transferring property. As the grantor or trustor, you give the right to a trustee to manage the assets for the beneficiaries. The main benefit of a trust is that they avoid probate proceedings, so the executor can start distributing property immediately. Another advantage is that they can often significantly reduce estate taxes, so your beneficiaries receive a larger percentage of your estate.

Getting Started and Reviewing

The first step in the process is checking what documents you already have. Starting from scratch can feel daunting, but we can walk you through the process. If you already have some plans, start thinking about how your life has changed since you created them. If you are married, divorced, or have new grandchildren, you will want to revise old legal documents. Even if your life didn’t change, laws probably did. The strategy from years ago may not be the best anymore. We will review everything and update anything that should change. The more frequently you update these documents, the easier estate administration and probate will be for your family. If you have questions or would like to discuss your legal matters, please do not hesitate to contact our office at 215-364-1111 to schedule a consultation.

CLIENT Testimonial

It can be quite confusing to determine which Medicare plan is best for you. There are several types of plans, and each has its own advantages and disadvantages. Understanding some basic features will help you decide how to maximize your healthcare dollars and choices. You should review your choice periodically, especially as elements of the Inflation Reduction Act of 2022 change prescription medication and vaccine policies. Coverage can also change from year to year..

There are three basic types of plans:

  1. Original Medicare
  2. Medicare Advantage
  3. Medigap

Original Medicare

Medicare is a government health insurance plan for people 65 and older. Original Medicare, sometimes called traditional Medicare, comes in several parts. Each part covers different things and has various associated costs. 

Most people do not pay for Part A as it was deducted from their taxes paid while working. It is primarily for hospital visits and nursing care. However, there are many fees associated with being in a hospital that Medicare does not cover, which you still might have to pay out of pocket.

Part B requires monthly premiums, which can be deducted from your social security. You can elect to enroll in part B through Original Medicare. It covers a portion of doctors' visits, durable medical goods, and more. 

Part D covers the cost of many prescription medications. You can add it to Original Medicare or purchase it as part of a Medicare Advantage plan.

Medicare Advantage

Medicare Advantage is offered through private insurance companies that Medicare approves. Most plans include Parts A, B, and D of Original Medicare with some variations from the original. There are a wide variety of Medicare Advantage plans, including Preferred Provider Organizations (PPO) or Health Maintenance Organizations (HMO). PPOs tend to have higher premiums and offer more choices than HMOs. Medicare Advantage HMOs and PPOs often have higher premiums than traditional Medicare because they usually cover more expenses, including prescription drug costs, vision, hearing, and dental.

However, the overall costs, premiums, plus out-of-pocket expenses for Advantage plans can be lower than Original Medicare because the private insurers manage patient care and limit choices. They assemble networks of hospitals and physicians to control their costs and reduce their customer's premiums. They also restrict access to certain providers and increase the cost of care obtained out-of-network.

Traditional Medicare allows people to seek care from any provider participating in Medicare, which includes virtually all hospitals and physicians.

Medigap

Medigap is a co-insurance or supplement to Original Medicare. You can enroll when you first enroll in Part B. It is also available through Medicaid, a union, or a former employer when you qualify for both programs. You can’t have both Medicare Advantage and Medigap plans. Medigap helps cover expenses that Original Medicare does not cover, such as co-pays and deductibles. Due to the enrollment restrictions, you should strongly consider Medigap when you first become eligible.

The Right Choice for You

With all the different plans, parts, choices, and restrictions, it is crucial to consider your priorities for care. Limited access to doctors and hospitals may become important if you need specialized medical care, such as cancer treatment. Before enrolling, consider what specialty hospitals are included in Advantage plans. Likewise, Advantage plans can make it difficult to see a specialist for ongoing and chronic conditions due to limitations in long-term care services. An estate planning lawyer or elder law attorney can help address long-term care planning and the potential to qualify for Medicaid when necessary.

The Kaiser Family Foundation has put together a cost analysis to help you determine when Medicare Advantage would save you money. As you can see, the longer you stay in the hospital, the less advantageous an Advantage plan becomes.

Consumer Reports notes that the JAMA reported that seniors on Advantage plans often get more preventive care than those on traditional Medicare plans. JAMA published a comprehensive paper about how Medicare plan choice affects spending and discovered that Medicare Advantage enrollees usually spend less.

Consumer Reports notes that the JAMA reported that seniors on Advantage plans often get more preventive care than those on traditional Medicare plans. JAMA published a comprehensive paper about how Medicare plan choice affects spending and discovered that Medicare Advantage enrollees usually spend less.

A Guide in Choices after 65

Enrolling in the right Medicare coverage is one of many decisions that will affect your quality of life in your senior years. We are here to help you navigate a wide variety of choices.

If you have questions or would like to discuss your legal matters, please do not hesitate to contact our office at 215-364-1111 to schedule a consultation.

- Medigap, Medicare Advantage, and Traditional Medicare

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CLIENT Testimonial

Scott explained estate planning very thoroughly and in terms we could understand. He let us know our options and we feel that he is very knowledgeable, professional and also a compassionate person. We recommend Scott to our family and friends!
- Fred T., Willow Grove, Pennsylvania

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