Why You Should Have a Living Will

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A living will lays out your preferences for life-sustaining medical treatment.  It is often accompanied by a health-care proxy or power of attorney, which allows someone to make treatment decisions for you if you are incapacitated and the living will does not have specific instructions for the situation at hand.  “Living will” and “advance directive” are often used synonymously, but a living will legally only applies after a terminal diagnosis, whereas an advance directive is much more comprehensive and includes the health care proxy.

As of 2017, only around one in three American adults had an advance directive for end-of-life care prepared. Those who are older than 65 are more likely to have an advance directive prepared than those who are younger, as are those have chronic illness more likely than those who are not. People may be unwilling to prepare these documents because they fear that they won’t necessarily reflect their wishes at the time they become relevant; sometimes patients become more willing to undergo treatments they rejected when they were younger as they age and develop medical problems. However, the documents can be changed as long as they are properly executed. And if you continue to communicate your values with your proxy, they can make decisions based on your most recent preferences.

So why is a living will important? It reduces ambiguity which can prevent family disputes during what is already a difficult time. It may seem like something that can be put off, but life is unpredictable; one never knows when these documents could become relevant. Furthermore, it needn’t be a hassle. A living will is a straightforward document, however it’s important to work with legal counsel to make sure your beliefs are properly stated. Other health care documents should also be prepared at that time, like a health care power of attorney that designates a person to make health care decisions for you if you are unable.  Once you have signed any documents make sure you keep them updated, especially if you change states, and be diligent in communicating with whomever you named to act on your behalf.

If you need a living will or health care power of attorney or already have one that you would like reviewed, get in touch with our office by calling us at (318) 255-1760.

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Top Traits Needed for Building Wealth

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If you are a part of the millennial generation or younger, there is a steady path you can pick that can over time make you a self-made millionaire. It does not require a unique set of skills, specialized knowledge, or even excessive risks. Americans who achieve millionaire and multi-millionaire status using this technique took an average of about 32 years to accumulate multi-million-dollar wealth with some achieving it in as early as 18 years. They are called saver-investors, and when you encounter one, at first glance, they might not seem that rich.

Saver-investors typically are ordinary people without any particular advantages in life. They did not come from a wealthy family. Nor did they have unique or advanced skill sets that brought in high salary income. Primarily, investor-savers did not attend elite universities, get advanced degrees, inherit money or own high-end cars, clothes or homes. What saver-investors do have is the disciplined ability to follow two simple rules. The first rule is you must save 20 percent or more of your income and have the discipline to live off of the other 80 percent. The second rule is you must consistently and prudently invest your savings. Prudent investing means doing your homework for each investment vehicle and then continuously monitoring its progress. Typically, a saver-investor puts their money in retirement plans like a 401(k), equities, and real estate and then let valuations grow.

If the key to building wealth is so simple, then why isn’t everyone rich? Quite simply, it comes down to habits, the financial habits of people. It requires enormous fiscal discipline and a long-term commitment to become a saver-investor. It can require sacrifices, like running a side business or working a second job. John Jacob Astor famously said, “Wealth is largely the result of habit.” Long-term wealth creation is built on the foundation of consistent application of sound financial habits.

One habit is to eliminate distractions by learning how to say no often. If something is not aligning with your goals and dreams and will keep you from moving forward, it is a distraction and should be eliminated. When you do say yes, say it infrequently. Say yes to the things that are directly tied to your goals and dreams. Every day you need to learn something new. Grow your financial literacy and develop new skills. Use this new knowledge or expertise often to maintain and perfect your skills. Save money because it gives your options, empowers you, and gives you freedom. Opportunities are only as good as the financial resources you have to take advantage of them. Surround yourself with other like-minded individuals because social circles influence our feelings, thoughts, and behaviors. Calendar your day by the hours or even half hours to be highly effective. Isolate blocks of time in pursuit of those things that will help you build a foundation for success through financial independence. Finally, develop patience.

Acquiring wealth as a saver-investor takes time. When things get tight in day to day life, remember to survive until you thrive. It isn’t good luck that is going to make you wealthy; it is the persistence of good financial habits that will.

Part of living off 80% of your income includes choosing to live a modest life. Warren Buffett famously still lives in his first home purchased in 1958. Drive an ordinary car and wear simple clothes and jewelry. If you have children, send them to public schools. If they need more or better education, then supplement their learning by teaching them or signing them up for free online courses. There has never been a better time for humans to become knowledgeable about how to gain wealth. The internet has put a wealth of information in the palm of our hands. If you genuinely want to be wealthy, then develop good habits, live beneath your means, and employ the saver-investor method.

The next step is to plan to protect your wealth. If you have questions or need guidance in your planning or planning for a loved one, please do not hesitate to contact our Ruston office by calling us at (318) 255-1760.

The Top Long-Term Care Myths

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According to the U.S. Department of Health and Human Services, someone turning age 65 today will have a 70 percent chance of requiring some long-term care (LTC) service and support during the remainder of their life. In the case of women, the typical LTC need will last about 3.7 years compared to men who will need about 2.2 years of care. While approximately one-third of today’s 65-year-olds may not ever need long-term care 20 percent of those who do will require it for more than five years.

The statistics are clear; older Americans should be carrying a long-term care insurance policy to protect their future but only about 7.2 million Americans 65 years or older currently own a traditional long term care policy, and this number has held steady for the last seven years. While LTC insurance is overall considered expensive and finding the right plan for you in the myriad of insurance products available can be confusing and vary from state to state. According to A Place for Mom, there are seven myths about long term care that anyone age 50 or more should understand.

One myth is that a person has to get rid of all of their assets to receive Medicaid which will qualify them for federally available LTC benefits. In general, the rule is a person is not allowed to keep more than $2,000 in countable assets to be eligible for Medicaid. Exemptions in some states can include your home (if a spouse, minor or disabled child still lives there), assets that cannot be converted to cash, and burial plots or spaces. Also, personal property, one vehicle, and prepaid funerals generally qualify as exemptions. The Community Spouse Resource Allowance rules permit the non-applicant spouse to keep a portion of the couple’s countable assets to prevent them from becoming destitute. Before making any attempt to spend down assets to qualify for Medicaid speak to an elder law attorney as the federal five year “lookback” rules have penalties and exceptions.

No, Medicare will not pay for long term care expenses except in the most specific and narrow of circumstances. Medicare will cover skilled in-home care from a nurse, occupational therapist, physical therapist, speech therapist or social worker for up to 21 days if ordered by a physician. In the case of a skilled nursing facility, Medicare pays for the first 20 days with no co-pays but if the stay is between 21 to 100 days, Medicare only pays a portion, and the beneficiary must pay the balance.

Another myth is that a person thinks they are too young to think about long term care insurance let alone the need to pay for it. The truth is that even under the age of 65 if the person has a chronic illness like diabetes or high blood pressure or in the event of an accident, long term in-home or residential care services may be needed. According to the US Department of Health and Human Services on average, about 8 percent of people age 40 to 50 have a disability that may require long term care services.

Relying on the hope that family will take care of a long-term care need is often a myth. While many older Americans are successfully aging in place, in part due to the benefits of technology, unpaid family member caregivers and community organizations are typically not willing and available for long term, intensive caregiving. A family discussion is needed if there is an expectation that a family member is willing and able to take on a long-term caregiver role. While many family members are eager to provide oversight through the use of technology, the intensive requirements of long-term care are usually more than they are willing to accept.

Most health insurance policies will not cover long term care expenses to any meaningful degree. Some plans will have minimal home care and skilled nursing benefits; however, the nature of the plan is short term and is intended to produce recovery and rehabilitation while long term care is generally custodial in nature for the safety, maintenance and well-being of a person with a chronic condition. Even some long-term care insurance policies will not cover all long-term care expenses. There are elimination periods which function as a deductible or after a policy benefit has been exhausted. Specific coverage in long term care varies widely from policy to policy.

Finally, many aging Americans feel that their retirement savings will cover the costs of their long-term care. The website A Place for Mom has a financial calculator to help individuals understand their specific needs to cover long-term care costs. Currently, the average US national median long-term health care cost is about $50,000 for a home health aide which is above and beyond all other living costs. In many situations, in particular with residential care, costs can run hundreds of thousands of dollars over a few short years. Unless a person is independently wealthy, most retirement savings will be spent down very quickly.

Chances are you will need long term care during your lifetime. Being educated about what is best suited to meet your personal financial and health background needs is a significant first step. Next, understand what legal options are available to help you in the event you need significant long-term care and may run out of money trying to pay for it. We are here to help.

If you have questions or need guidance in your planning or planning for a loved one, please do not hesitate to contact our Ruston office by calling us at (318) 255-1760.

What You Should Cover with Your Aging Parent

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Your parent is getting on in age, but you don’t have a clear idea if there is a plan in place for their care.  It is a difficult topic to broach; no one wants to talk about death and the financial realities that come with aging.  Instead of having a proactive conversation early in a parent’s aging process most families have a reactive discussion under high levels of stress and emotions while their parent is experiencing an adverse health event.  The Public Broadcasting Service (PBS) has reported that 85 percent of time long-term care decisions are made during a medical crisis. The message is clear, be proactive and start discussing the important financial questions with your parent.

Prepare Yourself

Your parent will be feeling more comfortable and at ease if you have processed your feelings before talking to them.  Conduct research so that you are knowledgeable enough to present a clear and concise set of options for your parent.  Having options allows your parent and family to make decisions and feel in control of the process.  You are seeking progress, not perfection. It may not all become settled in one conversation, but the price of silence about your parent’s plan may be very costly to you.

Review Documents

Two of the most critical personal legal documents are a durable power of attorney (DPOA) and a healthcare proxy. All older adults should have these documents as it gives legal authority to a designated representative to make financial, legal, and health care decisions on your parent’s behalf. If your parent does not have a DPOA and becomes incapacitated, you will have to go to court to get appointed as your parent’s guardian which can be a complicated legal process at a time when your energy is better spent in the care and decision making for your parent. If they do not have a DPOA and health care proxy in place, make arrangements for them to meet with a trusted elder law attorney to properly draft the legal documents.

Often a parent will have a will, retirement account information and insurance policies that have not been revisited or updated in years, sometimes decades. When was the last time your parent reviewed beneficiary designations? Family circumstances change, and the birth of a child, death or divorce can affect how your parent may want beneficiaries designated. It is best to review financial and insurance data annually with your parent and make adjustments if necessary. For example, if the parent’s children are grown it might be best to cut back on the amount of life insurance, they carry to save money on annual premiums.

Long Term Care Plan

Address the issue of long-term care. According to the PBS, a full 70 percent of all seniors will need some long-term care as they age. Even if your parent is healthy today odds are, they will require long-term care and the costs are staggering. Some life insurance companies will add a long-term care rider to an existing policy. Medicaid also can cover some long-term care costs, but neither standard health insurance nor Medicare will cover your parent’s long-term care expenses.

Meet the Team

Ask your parent about their financial advisors and request a brief introduction to them.  Find out who they are and how you might contact them in the event your parent is unable to do so. This information will allow you to keep an eye on your parent’s accounts and be confident the advisors are trusted, objective and well versed in elder financial issues. Oversight by you in a slightly detached way provides your parent privacy and independence about their finances but allows you to protect them from unscrupulous advisors.

Understand Filing System

The last thing you need to discuss is where this vital information is filed so that before a crisis hits you know where to find the important documents, online passwords, and forms of ID you will need to facilitate your parent’s wellbeing. While you do not have to see all the specific contents of the information, particularly the financials, knowing where they keep the data is critical in a crisis. Remember that as your parent ages they may start to change the location of the information. Check with them a couple of times a year to ensure the information is still in the same place and physically look to be sure it is.

Discussing your parent’s strategy is best begun while they are healthy. Proactive planning is the best way to help your family as your parents age.

If you have questions or need guidance in your planning or planning for a loved one, please do not hesitate to contact our Ruston office by calling us at (318) 255-1760.