Oregon's State Budget is in Trouble: What Does It Mean for Seniors and Long-Term Care?

The economic news has been bleak. A year ago, who would have imagined the federal government taking over large banks and insurance companies? Seemingly every day we see news that things are getting tougher: rising unemployment, plummeting stock and bond markets, and retirement accounts cut in half.

Most recently, we see the economy affecting state budgets. A declining economy leads to reduced tax revenue for the state. Oregon is affected more than other states, since we are so dependent on the income tax. There will be less money available to help people with serious health problems. Make no mistake: state programs that serve seniors will suffer significant cuts. We saw this in the 2002-2003 recession, when 4,500 vulnerable seniors lost their Medicaid long-term care benefits.

What do these economic problems at the national and state level mean for the average senior? What can a retired person on a fixed income do to minimize the impact on him or herself and their families? The answer is that those who have planned in advance will be miles ahead. Recent law changes make it important to establish a long-term care plan well in advance of the need for care, while you are still healthy. Ideally, the plan should be created five years before long-term care may be needed.

If you are a married senior, have you considered what would happen if you or your spouse need long-term care? The average cost of long-term care in Oregon is almost $6,500 per month. Contrary to popular belief, Medicare does not pay for long-term nursing home care. Without proper planning, most of your assets would be spent on the care of the ill spouse. The healthy spouse could be left in poverty.

An unmarried senior must spend all of his or her assets, including the family home, down to $2,000, before qualifying for government assistance. The rules on these programs are complicated. Often, the ill senior will be left with only $30 per month from his or her Social Security to pay for personal needs. Without careful advance planning, this senior is literally out of money and out of options. In situations like these, we see children spending their own savings in support of their parents, leaving them unprepared for their own retirement. A cycle of poverty can be created.

None of these things needs to happen, but they do all the time when people fail to plan. An experienced elder law attorney can help create a plan for good quality long-term care and protection of a healthy spouse and disabled children. Don't wait until it's too late - plan today to protect yourself and your family.

Geoff Bernhardt is an elder law attorney in Portland, Oregon. For more information on his firm and on Medicaid planning, please see his website at www.elderlawpdx.com.

It's the Fourth of July - Salute our Veterans with Quality Care!

When families come to see me regarding the long-term care needs of a loved one, we always identify two goals. The first, and most important goal is good quality care. The second is to obtain that care in a manner that does not completely impoverish the older person and his or her spouse. In developing a plan to pay for good care, we have to identify all sources of funds to help pay for that care. The most overlooked source of help with long-term care costs is a Veteran's Administration (VA) benefit that pays monthly income to veterans and their spouses, and to the surviving spouses of deceased veterans. This benefit is commonly known as "Aid and Attendance Benefits."

In 2008, an unmarried veteran can receive a cash payment of as much as $1,554 per month. A widow or widower of a deceased veteran can receive up to $998 per month. Married veterans can receive up to $1,842 per month. While this is not enough to pay for 24-hour care, it can be of great help for the senior who is still living at home or in community-based care, and needs to bring in some extra help to remain independent.

Like Medicaid, the VA Aid and Attendance benefit is a means-tested program. Generally speaking, assets have to be reduced to approximately $80,000, plus the home and one car, in order to qualify. The applicant must have limited income, however, high medical and care costs can be used to offset the applicant's income.

In addition, the Aid and Attendance benefit is limited to wartime veterans and their spouses. The veteran does not have to have a service connected injury or have served in combat; military service during wartime for even one day is sufficient. The veteran or his or her spouse must need assistance with activities of daily living. Even if the veteran has assets exceeding $80,000, it is possible to plan to obtain Veteran's Aid and Attendance benefits.

Unlike Medicaid, there is no five-year "penalty period" if the applicant has transferred assets out of his or her name. The eligibility rules regarding planning are not as restrictive as the Medicaid eligibility rules. By doing planning to obtain Veteran's Benefits, it is sometimes possible to pay for care while staying out of the Medicaid system. Still, Veteran's Benefit planning should always be done by an experienced elder law attorney who understands the Medicaid rules, just in case the veteran may someday need to qualify for Medicaid assistance.

Do you know a military veteran who served our country during wartime, and who could use some extra money to pay for care costs? If so, please give him or her a copy of this article. Planning for Veteran's Benefits is an excellent way to provide extra income to help the veteran and his or her spouse receive the care they need, while staying independent as long as possible.

Geoff Bernhardt is an elder law attorney in Portland, Oregon. For more information on
his firm and on Elder Law planning, please see his website at www.elderlawpdx.com.

Power of Attorney for Finances: An Essential Tool for Elder Care Planning

Most people understand the need to have a will, so that when they pass away, assets will go to their chosen beneficiaries. Most people do not realize that they also need to appoint a power of attorney to make financial decisions and manage assets for them, if they become incapacitated.

If you think about it, most any financial decision we make requires a signature. Selling a house, writing a check, entering into agreements, etc., all require that we be able to sign documents. A signature itself is not even enough; the law imposes a requirement that the person signing the document have sufficient mental capacity to understand what they are signing.

As we age, there is a greater possibility that a time will come when we are not able to sign important legal documents. Or, even if we can sign our name, we may not understand what we are signing. At that point, assets are frozen unless someone has been given the legal authority to make financial decisions for you. The best way to do this is through a power of attorney for finances.

A power of attorney for finances is a document you can sign to appoint another person to make important financial decisions for you in the event you become incapacitated. The person you appoint is called your "agent". It is a good idea to name one or more alternate agents, in the event your first choice is unable or unwilling to serve in that role.

As an Elder Law attorney, one of the most common phone calls we receive is "I need to get power of attorney for my Mom." My answer is always, "that's great, we'd love to help your Mom. Let's schedule a time for her to come in and discuss it." "Well, that's a problem," replies the caller "because Mom has Alzheimer's Disease, and she won't understand what you are talking about."

In this situation, it may be too late to get a power of attorney. A power of attorney must be signed by a person who is legally competent. This means the signer must have the ability to understand the nature and importance of the document. If someone already has Alzheimer's Disease, or dementia, or has suffered a stroke, it may be too late to sign a power of attorney. Therefore, it is important to sign a power of attorney while a person has mental capacity to understand the document.

When deciding who should be your agent, remember that the most important qualities are honesty and good financial management skills. The main disadvantage to having a power of attorney is, a dishonest agent could use the power of attorney to misappropriate your assets. Therefore, only appoint the most trustworthy people to serve in this role. There are also professional trust companies that may agree to serve as your agent.

A power of attorney should always be prepared by an experienced elder law attorney. It is possible to obtain a generic power of attorney from a legal stationery store. However, this form will not give the agent the ability to make many types of important decisions for a disabled person. An experienced elder law attorney can provide a power of attorney that will give your agent flexibility to make important financial decisions if you are not able to make them yourself, such as disability planning, creating trusts, long-term care cost planning and tax planning.


Geoff Bernhardt is an elder law attorney in Portland, Oregon. For more information on his firm and on Medicaid planning, please see his website at www.elderlawpdx.com.