Elder Law Defined
Elder law is an area of law that includes estate, public benefits, and end-of-life planning. In contrast, estate planning is a narrow area only concerned with protecting and transferring your assets to your beneficiaries and heirs upon your death. Traditional estate planning is based on the misconception that the only issue you need to plan for is what happens to your stuff when you die, and how to avoid paying taxes.
Elder law is more comprehensive. It helps you plan to maintain your independence, puts a protective covering over your assets, helps you access resources to pay for medical care, and minimizes burden on your family and friends.
The real threat to an estate under current law is not taxation. In 2014, a married couple can pass over $10 million in assets tax-free. Instead, the real threat is the cost of uncovered long-term care and medical costs. Most seniors need some level of assistance with activities of daily living as they age. By age 65, one in eight people have some form of dementia or Alzheimer’s; that ratio jumps to one in two by the time that you reach age 85. This means that you will likely face the mounting costs of health care as you age, often not covered by insurance or Medicare.
Without proper planning, you may have to deplete your estate to pay for necessary medical care. Without proper planning, you will eventually qualify for public benefit programs like Medicaid or Veterans Affairs pension benefits but only after you have spent your estate into poverty levels, often leaving nothing of value for your children. Once you do qualify for public benefits, they can provide you with assistance for medical care, medication, food, and shelter. Often, however, these benefits offer a poor quality of life.
Proper planning can provide you the means to pay for long term care. Proper planning can put a protective coating around your assets so that you can access necessary public benefits without impoverishing yourself (and your spouse), or undermining your quality of life. Proper planning can help you maintain your quality of life and independence, while still getting necessary medical care.
Further, traditional estate planning often leaves your powers of attorneys without the skills, knowledge, or direction about how to manage your finances or medical care. Indeed, in Nevada, the only real question that a traditional estate plan asks is whether you want to be taken off life support or not. However, your agent may be faced with difficult decisions about your care, including where you should live, what medication you should take, or what other medical care you need — all while having to manage your finances and obtain any applicable public benefits. In contrast, a proper plan can give them direction about the type of care you want, and where you want to live.
Without proper planning, your agent can be overwhelmed with the task of managing your finances and care. Without proper planning, they may not have the resources or education needed to make the best decision for you.
Proper planning, however, can give your agents clear direction and authority. It can communicate your desires on medical care. It can provide the education and professional support your agents need. For example, proper planning can give your agent direction on hiring a geriatric care manager, on maintaining your home, and how to file your taxes.
In summary, modern-day elder law is a holistic approach to planning. Elder law is as concerned with preserving your quality of life, as it is with preserving your assets, and minimizing the burden on your friends and families.