What Does Incapacitated Mean in Elder Law & Estate Planning?

When working with an attorney to prepare for your future and address the challenges associated with aging, you will likely come across the term “incapacitated.”

Incapacitated Definition

Someone who is incapacitated cannot make personal decisions or understand legal documents. An incapacitated person requires a surrogate decision-maker, such as an agent under a health care power of attorney or a guardian.

When a person has the mental state to execute a valid legal document, such as a will or trust, this is known as having capacity. Capacity is the opposite of incapacity. If a court finds that a person signed a will while incapacitated, the court can invalidate the will.

(Note that while certain states use the term “incapacity,” others refer to this same concept as “incompentence.”)

Causes of Incapacity

You or your loved one could become incapacitated for a variety of reasons, including illnesses, injuries, and disabilities. A person with a severe developmental disability may be legally incapacitated for their entire adult life.

Someone who experiences a disability later in life may become incapacitated after the onset of an illness or injury. For example, an older adult who develops dementia may become incapacitated once the dementia progresses, such that the individual cannot understand a legal document or make personal decisions.

Incapacity in Elder Law

Elder law involves preparing for and addressing incapacity associated with injury, illness, disability, or aging. It is essential to understand the concept of incapacity applies to power of attorneys, wills and estate planning, and guardianship of an adult.

Power of Attorney

A power of attorney is a legal document that allows you to appoint someone else to make decisions for you.

  • A health care power of attorney allows you to select someone to make health care decisions for you. You can also give your agent instructions for the type of care you would like to receive, including end-of-life care.
  • With a power of attorney for property, you can give someone the authority to handle your financial affairs, such as paying your bills and managing your accounts.

Creating a valid power of attorney requires you to have mental capacity to understand the contents of the power of attorney. If you become incapacitated, a power of attorney allows you to preserve your autonomy, as you have selected a surrogate decision-maker to make decisions according to your wishes.

Depending on how you and your attorney structure your power of attorney, it could take effect only after you become incapacitated, once a physician determines that you cannot make decisions for yourself. However, many choose to allow trusted individuals authority as soon as they create a power of attorney, as this avoids having to wait for a physician’s determination of incapacity.

The court may appoint a guardian for those who become incapacitated without a power of attorney.

Guardianship of an Adult

Incapacity is a central concept in the guardianship of an adult. Guardianship of an adult is a court-supervised arrangement where one person assumes responsibility for an adult who is incapacitated.

The court must first determine that a person is incapacitated before permitting someone to become the legal guardian of an adult. In making this determination, the court relies on evidence from the individual’s physician.

According to the National Core Indicators Data Brief, those with significant autism, severe intellectual disability, or Down syndrome are more likely to have guardians.

Wills and Estate Planning

Making a will or any estate planning document that needs your signature, such as a trust or transfer on death deed, requires you to have capacity. You must understand what you are signing.

A will is only valid if you had the required mental capacity when you signed it. The court can invalidate your will if it finds that you were incapacitated when you signed it.

For people with cognitive difficulties impacting capacity, it is possible for capacity to fluctuate. A person with dementia may cycle through periods of lucidity and incapacity.

Consult With an Estate Planner

As you age, it is a good idea to meet with your estate planner early and begin the process of developing a will and estate plan. Dementia, a disease that can affect capacity, impacts approximately 10 percent of adults 65 and older, according to Columbia University.

By working with an estate planner, you can help prevent others from challenging the validity of your will after you pass and ensure that you have a valid will in place. Find a qualified attorney near you today.

6 Ways the Sandwich Generation Can Plan for The Future

Anyone experiencing the struggle of simultaneously caring for children and aging parents is part of the sandwich generation. Although “generation” is part of the phrase, it doesn’t refer to people born at a specific time. Typically, these family caregivers will be in the 30- to 40-year-old age range, providing for their families and balancing care duties between the needs of children and parents.

Trends That Led to an Increasing Sandwich Generation

The rise in the numbers in the sandwich generation is a byproduct of two influential trends: Women are giving birth later in life, and the senior population is increasing. A third contributing factor was the COVID-19 pandemic and the fear of placing aging parents into long-term care facilities where viruses spread easily in communities of people with declining health. Many families pivoted to caring for their loved ones at home.

If this sounds familiar, you are not alone. You are most likely experiencing significant anxiety and stress as you juggle school and activities for your children, expectations at work, changing family dynamics, and daily caregiver duties. Though this is a challenging time in your life, it doesn’t have to be as hard as it seems. There are steps to take to minimize frustration.

6 Ways for Caregivers of the Sandwich Generation to Plan

  1. Start by reprioritizing daily routines. If there seems to be an overwhelming number of tasks to accomplish in a day, prioritize between urgent and non-urgent categories to determine what needs to be addressed first.
  2. Make time for self-care to avoid caregiver burnout. Focusing on basics like nutritious meals, adequate sleep, and exercise will serve you and your loved ones well.
  3. Know your rights at your workplace. Programs like the Family Medical Leave Act (FMLA) offer job security to those taking a leave of absence for family medical reasons. While it’s not a paid benefit, you will maintain access to your health insurance benefits for up to 12 weeks off. If you haven’t already, explore working remotely to put you in the same physical location as those you care for in your home.
  4. Share your feelings about the challenges you are facing and get extra help when you need it. Talking things through with family members can better manage everyone’s expectations. There are also forums and community resources that can put you in touch with others in the sandwich generation, where you can share information and offload burdens.
  5. Make an honest evaluation of your available financial resources before determining a new course of action.
    • Are your parents able to pay for their care on their own, even within your own home?
    • Do they carry long-term care insurance or whole life insurance policies with living benefits?
    • Are other family members willing to contribute financially, or is a public assistance option viable?
  6. Talk things through with your parents about their preferences and abilities to pay for health care services. Discuss ideas with siblings and figure out who can help provide care and whose home provides the best solution. If external help is a must, research local possibilities and costs.

Preparing Estate Planning Documents

It’s an excellent idea to consult an estate planning attorney about legal documents if a sudden financial or medical decision presents itself. You need to have the legal power to make important decisions for your aging parents and minor children.

Your parents may need more help as their health declines or they experience dementia. You may need to renovate your home as your parents age for their comfort and safety, or eventually look for professional services and facilities. Also, review your retirement savings and other investments that can protect your children’s lifestyle and future.

  • College funds need to be a priority, as is a 401(k) plan if your place of employment offers one.
  • Consider the purchase of a term or whole life insurance policy to protect your family’s future in the event a tragedy affects your ability to care for your family.
  • Start an emergency fund to help cover incidental costs, unexpected medical bills, and a potential long-term hospital stay. Unexpected costs can throw off your budget.

If your sandwich generation status continues for an extended time, re-evaluate your finances periodically. Goals will change, and updating your estate plan (and your parents’ estate plan, too) may help you stay on track to meet your family’s long-term goals.

Money management and estate planning are critical elements to creating a mutually beneficial living experience as part of the sandwich generation. While this may not be the easiest time of your life with the extra demands placed on you, it’s possible to manage and even thrive with adequate planning.

Speak with an attorney who is familiar with structuring these types of plans. Find a qualified estate planning attorney in your area today. They educate families about issues faced by seniors who may be experiencing declining health, evaluate health care facilities and services, and provide family resources for caregiver support.

Affordable Housing Options for Low-Income Older Adults

Safe housing that meets older adults’ needs is essential to healthy aging in communities. Many seniors with low, fixed incomes struggle to balance housing expenses with the costs of health care, transportation, and groceries.

Finding inexpensive, safe, and accessible housing can be challenging. However, several affordable housing options are available for older people with low incomes.

Section 202 Supportive Housing for the Elderly

The Section 202 Supportive Housing for the Elderly Program provides affordable housing and supportive services for older people with limited means. Through this program, seniors can maintain independence while receiving benefits such as transportation and assistance with activities of daily living (ADLs). The support allows them to continue living independently.

The United States Department of Housing and Urban Development (HUD) requires Section 202 facility owners to maintain the buildings and regularly inspect them to ensure the tenants have a safe environment. Rent typically comprises 30 percent of the tenant’s income.

Older adults who meet specific thresholds may enroll in Section 202 Supportive Housing for the Elderly Program.

  • The head of the household must be 62 years old or older.
  • There are also income requirements, which vary depending on location. Seniors must meet HUD’s income limits criteria. Generally, it is less than 50 percent or less of the area’s median family income.

The program has several benefits for those who qualify:

  • Low housing costs provide peace of mind and stability.
  • Units designed for older adults are more accessible, including features such as wheelchair ramps, wider doors, and bathroom grab bars.
  • Senior communities ease loneliness and foster social connections.

Housing Vouchers

Housing vouchers are another option for seniors. Local housing agencies provide housing vouchers to low-income households that help cover rent. These vouchers are available to families living below 50 percent to 80 percent of the poverty level; income thresholds vary by area and agency. Dwellings must satisfy housing quality standards, and owners must maintain the units.

While families can obtain vouchers regardless of age, elders and those with disabilities can receive an additional deduction.

Although housing vouchers can help some older adults and their families, limited availability and long waiting lists characterize housing voucher programs. Per the Center on Budget and Policy Priorities, only one in four qualifying households receive vouchers.

Home Sharing

Home-sharing programs can help older adults living alone stay in their homes while providing an affordable housing option for older adults. In addition to helping with costs, home-sharing can prevent loneliness, particularly benefiting older adults whose spouses have passed or children have moved away.

Through Senior Homeshares, older adults with homes can find housemates who are also elderly, helping to lessen the cost of living. The service pairs older adults with spare rooms in their homes with those on fixed incomes searching for safe, affordable housing.

Additional Options

Most affordable housing programs, such as Section 202 and housing vouchers, have waiting lists as demand exceeds availability. Additional options exist for older adults who need more immediate help with housing costs.

  • Older adults who own their homes can apply for a reverse mortgage, allowing them to continue living at home. Reverse mortgages draw upon existing equity in a home to supply regular payments, which can supplement retirement income. The federal government insures the Home Equity Conversion Mortgage (HECM).
  • For those with health care needs who have very low incomes and few assets, Medicaid could cover the cost of nursing home care.
  • Medicare pays for certain in-home health services for homebound older adults. Although Medicare does not cover rent or mortgage payments, in-home care covered by Medicare can lessen total expenses.
  • Individuals might consider moving in with family or friends to share living expenses and benefit from support.

For older adults struggling to afford housing costs, several options exist. The best choice depends on your unique circumstances. For assistance obtaining more affordable housing as you age, consider consulting with your attorney in your area.

Which Should I Choose? Nursing Home Care vs. Hospice Care

End-of-life decisions are never easy. One of the most important decisions you may make regarding health care as you age could be whether you need a nursing home or hospice care.

To make the best choice for you and your family, it helps to know the difference between the nature of the care provided through a nursing home as compared with hospice.

Nursing Home Care

Nursing home facilities offer residential care for the elderly and disabled. The treatment patients receive from a nursing home differs from what is available in hospice care. Residents at nursing homes receive treatment to extend their lives. Care that you can expect from a nursing home may include custodial and some skilled care.

Custodial care includes nonmedical treatment, such as assistance with dressing, bathing, cooking, laundry, and other types of personal care. The provider does not need a medical license to give residents this type of care.

Skilled nursing care is provided by licensed medical practitioners. Nursing home residents may receive some skilled care, including wound care, physical therapy, injections, and other care that they may need to ensure their physical well-being.

Note that Medicare generally does not cover custodial care. And while Medicare Part A (hospital insurance) coverage may be available for enrollees with certain medical conditions, it is often limited to those who need short-term care in a skilled nursing facility, rather than a nursing home. (Learn more about Medicare’s limited nursing home coverage.)

If you are eligible for Medicaid, a program for individuals with limited income and assets, there are nursing homes in many states that accept Medicaid patients.

What Is Hospice Care?

Hospice care is an option for patients who do not wish to receive treatment to help improve their condition or extend their life, but want comfort care as they reach the end of their lives. Your hospice care team may include doctors, nurses, social workers, spiritual advisors, and volunteers.

A hospice care team is trained in treating end-of-life pain. Hospice care can be administered in a patient’s home or in an institutional setting. It also may provide support to family members and caretakers, including respite care.

If a patient has Medicare Part A and meets the following qualifications, they may have hospice care services, including pain-relieving medication and home aide services, covered:

  • A primary care physician, or a hospice care doctor, confirms that the patient’s condition is terminal and they will not live for more than six months.
  • The patient is willing to receive palliative care only and not care that is intended to try and improve their condition.
  • The patient signs a statement confirming that they will receive hospice care instead of any other Medicare-covered treatments related to their physical condition.

For Medicaid recipients with a terminal illness, certain states may provide help in paying for hospice.

A Note on Concurrent Care                                         

Complicating matters is the fact that Medicare will generally not cover nursing home care and hospice care, known as concurrent care, at the same time. Currently, individuals on Medicare must give up Medicare payment for care related to their terminal condition if they want to receive Medicare’s hospice benefit. As a result, many individuals facing a terminal illness may not opt for hospice support services.

Policymakers have been pushing for a benefit within Medicare that would allow patients who wish to benefit from hospice care services (for example, a hospice aide, in-home respite care, or nutritional support) to receive curative treatment (for example, chemotherapy) simultaneously.

The Centers for Medicare and Medicaid Services has spent the past several years testing various models, including one known as the Medicare Care Choices Model (MCCM). MCCM has been shown to improve the quality of patients’ end-of-life while also resulting in Medicare savings. However, this option has not yet been made permanent.

End-of-Life Dilemma: Which Should I Choose?

While considering the next steps to take in your health care plan, speak candidly with your family and health care team about your needs and how you see your future.

If you have questions about coverage options that may be available to you in a nursing home or with hospice care, you may consider speaking to an elder law attorney in your area.

Will Robotics and AI Be the Future of Elder Care?

Adults 65 and older constitute the fasting-growing age demographic in the United States. When it comes to elder care, this expanding population is facing a scarcity in people equipped to support them as they get older.

One estimate predicts a shortage of 151,000 paid direct care workers and 3.8 unpaid family caregivers by 2030, increasing to a gap of 355,000 paid workers with 11 million unpaid family caregivers by 2040.

Technological advancements in robotics and artificial intelligence may be opening the doors to new possibilities for supporting aging people.

Innovations for Aging in Place and Beyond

Many older adults wish to stay in their homes for as long as possible. According to AARP, 77 percent of adults over 50 want to continue residing in their homes for as long as they can.

Yet aging can lead to challenges with mobility and memory, such that older individuals often need additional assistance to live independently. Innovations in robotics and artificial intelligence may have the potential to provide support on this front, allowing seniors to continue living at home as they age.

Developments in robotics and AI could also fulfill unmet needs in nursing homes and assisted living, increasing efficiency, helping caregivers complete tasks, and reducing the number of staff required.

Meanwhile, artificial intelligence technologies may be able to help older adults manage health conditions from home as well as receive more efficient care in hospital settings.

Robots Helping Out in Health Care Facilities

How might robots help seniors in their homes, nursing homes, assisted living facilities, and beyond? Here is a glimpse into some emerging products:

  • Panasonic has developed robotic exoskeletons designed to augment wearers’ abilities. This self-reliance support robot aims to help aging people perform everyday tasks, get in and out of bed, and sit on chairs or the toilet. The device could help individuals to perform physical tasks without assistance. Another portable exoskeleton, the APO, may be another type widely used one day in health care to help prevent falls in seniors.
  • The TUG robot is already assisting in hospitals by delivering medicine, meals, supplies, and tests, freeing nursing staff to focus on tasks requiring more education and expertise.
  • Social robots may prove another avenue for improving older adults’ mental health. Paro, a robotic seal, gives patients the benefits of pet therapy in health care settings and dementia wards where bringing live animals would be impractical. Similar to pet therapy, some individuals may find it easier to connect with robots than with people.

In the coming years, other kinds of socially assistive robots may become increasingly common in elder care. These types of robots engage with residents, provide entertainment and interaction, perform tasks, or help ensure safety:

  • A socially assistive robot called Stevie, designed at Trinity College Dublin in Ireland, was tested at a Washington, D.C., nursing home from 2018 to 2020. Stevie entertained residents by telling jokes, playing bingo, and leading karaoke. It also provided reminiscence therapy using stories and music and could clean the facility with ultraviolet light. Recognizing commands like “help me,” the robot also can alert staff when residents needed assistance.
  • Pepper, a humanoid robot funded by the Minnesota Department of Human Services, is similarly designed for socializing with residents. Able to recognize faces and read human emotions, Pepper is being introduced into nursing homes and other elder care facilities.
  • Aeo, a robot created by Aeolus Robotics, interacts with residents socially. In addition to taking selfies with residents, it performs various essential functions, such as disinfecting surfaces, opening doors, pressing elevator buttons, and alerting staff when a resident has fallen or needs help.

Technology at Home

Older adults who live alone and people with disabilities can already use Personal Emergency Response Systems (PERS), also known as Medical Emergency Response Systems. These lightweight, battery-powered wearable devices allow individuals to call for help at the push of a button. For an installation fee and a monthly monitoring charge, users receive a device that contains a radio transmitter and a console that connects to a telephone. An emergency response center monitors incoming calls.

Technology using artificial intelligence, motion sensors, and camera monitors can also provide more comprehensive assistance and monitoring for seniors aging in place:

  • CarePredict, a device worn on one’s dominant arm, tracks the wearer’s activity. When it detects deviations from behavioral patterns, it alerts a caregiver.
  • With Envoy at Home, caregivers can place small sensors in their loved one’s home that alert them when their loved one could be at risk, such as when they leave home, exhibit disturbed sleep, visit the restroom frequently, or display inactivity.
  • Integrating AI with smartphone usage is one more emerging area in senior care. A 2021 survey by Pew Research Center found that the majority of older adults use smartphones. Technology utilizing smartphones could make in-home health monitoring more accessible, particularly for homebound seniors who may postpone doctor visits or rely on telehealth.
  • With AliveCor, older adults can monitor and track their heart activity on their phones. AliveCor is a wireless personal electrocardiogram (EKG) placed on the back of the smartphone. Using an application, individuals can view their EKG results and can share results with their cardiologists.
  • Using the smartphone’s camera, artificial intelligence, and machine learning, Healthy.io makes medical assessments of urine by analyzing the concentration of chemical elements and chemical compounds in urine.
    Healthy.io also empowers users to take photos of their wounds for a digitalized wound assessment, which can track healing and help doctors make recommendations.
  • Luminostics is a diagnostic platform that attaches to a smartphone. It can recognize bacteria, viruses, proteins, and hormones from bodily fluids.

A Growing Market

Advances in medical technology are already helping health care providers manage, identify, and treat medical conditions in older adults.

According to Healthcare Dive, the Food and Drug Administration (FDA) authorized 91 AI- or machine-learning-enabled medical devices in 2022 alone. These include tools for radiology, cardiology, neurology, and more.

Going forward, AI may also become the norm for performing administrative tasks in clinical settings, giving health care workers more time to spend directly helping patients.

Is “Aging in Place” Right for Me?

Most older adults want to remain in their homes and communities as they age rather than move into assisted living facilities or nursing homes.

For those who wish to maintain their independence and continue living at home as they grow older, taking certain steps to protect their physical, mental, and financial welfare is essential.

What Does It Mean to Age in Place?

The Centers for Disease Control and Prevention defines aging in place as a senior’s “ability to live in one’s own home and community safely, independently, and comfortably, regardless of age, income, or ability level.” According to 2021 data from AARP, more than three-quarters of adults 50 and older say they would prefer to age in place.

Health Considerations for Older Americans Aging in Place

Older adults must consider their physical, emotional, and social well-being when deciding where to spend their later years. They may consider adding supplemental services over time to help improve their quality of life.

To ensure that you will have the support you need for safely aging in place, take the following into consideration:

Resources to Manage Chronic Diseases

Disease management is vital for anyone, especially an older person with a chronic illness. Many older people suffer from at least one chronic illness. If a senior has a chronic disease and wants to age in place, they and their caregivers should focus on:

  • Ensuring that spaces in the home are safe and easily accessible to make getting around easier;
  • Learning about proper nutrition; and
  • Increasing access to dental health services. Research has found that proper oral care can help prevent the progression of many chronic diseases.

Eating Well While Aging at Home

Proper nutrition is a vital part of caring for yourself at home. In facing potential changes to your financial situation after retirement, you may need help buying nutritious meals even after budgeting.

If you find yourself in need of meals, community resources may be available. Neighborhood senior centers, places of worship, and charities may provide a hot meal while you make new friends. If you cannot leave your home, some meal delivery services drop off food at your door for little or no cost.

Support for Mobility

Exercise and maintaining your mobility can increase overall physical and mental health even as you grow older. Seniors aging in place need to be able to move around their homes and neighborhoods safely. Aging in place is a much more realistic goal if you can walk for exercise, access transportation to medical appointments and errands, and maintain a safe environment at home, free from increased fall risks.

If you desire to age in place, consider simple changes you can make to your home to promote your safety. Examples of helpful modifications around the house include handrails, temporary ramps, no-slip bath rugs, and assistive seating.

Mental Health, Substance Abuse, and Memory Care Services

There is an increased need among older adults for mental health, substance abuse, and memory care services. An estimated 20 percent of older adults have a mental health disorder, and the total number of seniors with a mental health or memory care diagnosis is likely to increase over time.

Suggestions for addressing mental health concerns among older people include:

  • Focusing on preventative care. Seniors and their caregivers should work with their primary care physician to identify warning signs of depression, anxiety, other mood disorders, and memory care problems. Preventative care can help mitigate the progress of these disorders and improve quality of life.
  • Looking for common signs of a substance abuse problem. This is an often overlooked area of older adult mental health care. Older adults may turn to substances to deal with unresolved childhood problems or to avoid a feeling of loss of meaning and purpose. Some common signs to watch for include reduced hygiene, unexplained bruises, erratic behavior, and the smell of alcohol on their breath.

    If you are a senior’s caregiver and suspect substance abuse, you can find resources and support through the Substance Abuse and Mental Health Services Administration (SAMHSA).

The Need for Social Connection Among Aging Adults

Older adults benefit tremendously from social connections and interaction. People over 65 are likely to live alone, so creating a community outside the home is necessary. Feeling a sense of purpose is beneficial to mental and physical health. For seniors looking to create a sense of community and purpose, they may benefit from such activities as:

  • Joining an organization or social club
  • Volunteering for a cause close to their hearts
  • Learning a new hobby
  • Attending a religious institution
  • Adopting or fostering a pet
  • Using technology to stay in touch with friends and family

Wearables and Smart Monitoring Devices

Technology can help us not only remain connected to one another, but also monitor our health and that of our aging loved ones. Many devices make detailed health information readily available at our fingertips. These devices benefit seniors because they can learn more about their health and make the most of doctor’s visits by communicating effectively about their medical needs.

Examples of wearable health and smart-home monitoring devices include:

  • Smartwatches and smartphones, which can track your cardiac health, fitness activity, and sleep patterns
  • Medical alert bracelets and personal alert necklaces, which can aid in detecting falls or contacting emergency services when necessary
  • Contact sensors and smart locks, devices that can alert caregivers when their loved one living at home leaves a window, garage, or door open, or has forgotten to lock them
  • Smart plugs, which can automatically turn on and off lights, space heaters, thermostats, security cameras, and more

Money Management While Aging in Place

Money management can also be an area of concern for seniors and caretakers. Seniors want to make sure they have sufficient financial resources to remain in their homes and communities comfortably, eat well, care for their medical needs, and have fun.

Creating a budget with the help of financial counselors and geriatric care managers can benefit someone on a fixed income. There may even be volunteers in your area that offer a similar service. Being aware of how to prevent and avoid common types of scams that target the senior population is equally as important.

How Can Caregivers Help Seniors Age in Place?

Seniors often choose to age in place to remain independent and avoid becoming a burden to their family. Caregivers can support their goal by teaching them to use technology to communicate and track their health, helping them establish a budget, and setting them up with a routine that may include visiting their doctor, running errands, and making time to socialize.

There is nonmedical support that your loved one will need, too. Caregivers may opt to support their aging loved ones by pitching in with or hiring services for lawn care, cleaning, cooking, laundry, or pet care.

Is Aging in Place Right for You?

Careful planning is the best way to accomplish your goal of staying home as you age. If you are considering plans to age in place and want assistance, elder law planning help is available in your area. Find a qualified elder care attorney to learn more about your options.

Becoming a Family Caregiver for an Ailing Loved One

Taking on the responsibility of providing full-time care for an aging or disabled loved one can be a rewarding experience. Being a primary caregiver helps you rest assured that your loved one is receiving compassionate care from someone who will go above and beyond to ensure they are comfortable and looked after.

Despite your good intentions to create a comfortable environment for your loved one, full-time caregiving is a significant time commitment. There is also a financial reality that the caregiver must face. Fortunately, family members who want to serve as caregivers may have options to help cover the expense.

What Is a Caregiver, and What Do They Do?

Professional caregivers work intimately with seniors to meet their needs as they age. As individuals get older, their needs change and they may need more help going about their day.

Examples of the kinds of help caregivers provide include:

  • Bathing and grooming
  • Help with toileting
  • Medical appointments and medication compliance
  • Transportation
  • Companionship
  • Cooking, cleaning, and grocery shopping
  • Care for animals
  • Laundry
  • Coordinate benefit care/speak to insurance companies on the senior’s behalf, if authorized

Family Caregivers: Know the Downsides

Having a family member serve in the role of caregiver can make for a better experience for your loved one and, in some ways, give you peace of mind as well. However, there are some downsides to be aware of if you are considering becoming a family caregiver.

Your own health, both physical and emotional, can be negatively affected when taking on the burden of caring for a family member. Be sure to engage in self-care, maintain a healthy diet, and watch out for signs of stress and burnout. When you do need a break, consider looking into respite care.

If your loved one has specific medical issues that will require the attention and expertise of a professional health care provider, you may want to reassess whether you should take on the role of family caregiver.

Taking care of a loved one who is getting older or who is disabled will likely require a great deal of your time, too. You may find yourself not performing as well at work or having a longer commute as you fulfill the needs of your ailing loved one. Not to mention that your own immediate family may be missing out on valuable time with you while you are caregiving elsewhere.

In turn, this could mean you will have less time to hold down a full-time job. In fact, a 2020 AARP survey showed that about 20 percent of family caregivers reported experiencing a high level of financial stress. Nearly 30 percent of them stopped saving altogether as a result of providing care for their loved one.

In these challenging economic times, you must be able to support yourself while ensuring the best care for your aging family member.

Can Family Members Get Paid for Their Work as a Caregiver?

Fortunately, certain programs are available to help family members care for ailing relatives. You may need to do a bit of research to find the right option for your circumstances.

  • Medicaid Self-Directed Care

For individuals on Medicaid, the Medicaid Self-Directed Care Program is one option that gives them the authority to manage their services. In certain states, this program offers recipients the ability to use the resources allocated for home care to pay a family member to help them with their daily needs. The Medicaid Self-Directed Care Program lets seniors have more autonomy over their care.

Note that such programs vary by state, however, and not all states will have an option like this. Each state may also use different criteria to define who qualifies as a “family” caregiver. Find your local Area Agency on Aging to learn more about the possibilities, or call your local Medicaid agency.

Note that, generally, Medicare will not cover the costs of caregiving by a family member.

  • Veteran’s Benefits

If your loved one is a military veteran, there are special benefits available to cover their home care, including the Veteran’s Directed Home and Community Based Services program. This program gives veterans a flexible spending budget that the veteran can use to pay a family member to act as their caregiver.

  • National Family Caregiver Support Program

Note that this program does not pay caregivers directly. Rather, it helps fund several different types of services for family caregivers, from training in caregiving to respite care. Learn more about this program.

  • Long-Term Care Insurance

If you are thinking ahead to who will care for you as you age, you may consider long-term care insurance when creating an estate plan. Certain long-term care insurance policies allow the policyholder to pay family members to work as caregivers. However, that is not true for every policy. Some policies do not allow policyholders to pay family members to work as caregivers if they live in the policyholder’s home.

Before taking out this type of insurance policy, you should speak to your attorney to ensure you are properly advised.

Aging Care: 6 Tips for Caring for Elderly Parents

Many adult children wonder what their aging parents may need and how can they can help provide it for them.

You may constantly worry about your parents or other older loved ones, especially if you live far away from them. You can, however, take some simple steps to ensure your parents are safe as they age.

Tip No. 1: Recognize the Risks Older Adults Face

Knowing the risks seniors face can help you begin an action plan for your parents. It may be difficult for some older adults to complete tasks they could do before with ease, particularly if they live alone. Examples of those tasks can include:

  • Taking medication correctly and on time
  • Remembering things, keeping up conversation, or multitasking
  • Getting help in a medical emergency, such as a fall
  • Eating healthfully
  • Moving safely around their home

Being aware of these common concerns can be an important first step in doing everything you can to protect your parents as they age.

Tip No. 2: Ensure Medication Compliance

If your parents have health conditions that require them to take medication regularly, you should take time to make sure they are adhering to their prescription instructions. It may be a good idea to routinely review the medications your parents take, the name of the medications, and any potential side effects.

You may consider creating a medication schedule that you can both follow, so that you (or a home care provider) can check in and confirm your loved one is remembering to take medications when necessary.

Tip No. 3: Prepare for Cognitive Decline

Alzheimer’s disease and other forms of dementia affect more than 5 million adults aged 65 and older, according to the Centers for Disease Control and Prevention (CDC). Keep your parents safe by understanding their current cognitive abilities and any risks they may face for future decline.

Consider setting up a routine for your parents’ day-to-day lives. This might include social engagement and spending time with you and other family members, which may become even more crucial if their cognitive health has deteriorated.

Tip No. 4: Equip Aging Parents for Medical Emergencies

Older adults that live alone are vulnerable to falls and other medical emergencies. If you live out of state, you may have concerns about your parents being able to act quickly in ensuring they get emergency medical attention when they need it.

To help your parents respond to emergencies, consider using a medical alert system. With a medical alert system, your parents will have emergency assistance at the push of a button. Many different companies offer this type of service. An online search can help you narrow it down.

Tip No. 5: Plan for Meals

Seniors, especially those that live with memory issues, may not eat regularly. Without adequate nutrition, older adults may fall ill, or any current condition may worsen. Many seniors across the United States are food insecure. Fortunately, there are certain Medicare Advantage grocery benefit programs as well as other free or inexpensive meal delivery services, such as Meals on Wheels, that deliver nutritious meals to seniors.

Tip No. 6: Prevent Household Injury

Household injury is a major risk for seniors, especially those who live alone. You should do a sweep of your parent’s home and remove all potential hazards, including unsecured electrical cords, household products and chemicals, or loose rugs. Fix broken handrails on staircases, install grab bars in bathtubs, and ensure there is adequate lighting in their home. Taking each of these steps, and any others you see fit, can help avoid a preventable injury.

What Does the Term “Decedent” Mean?

“Decedent” is a legal term that refers to a person who has died with unsatisfied legal obligations.

At the end of their life, a decedent has some legal duties that must be fulfilled through a representative. For example, decedents remain obligated to satisfy certain debts incurred during their life and file their last income tax return.

What Is the Difference Between a Decedent and a Deceased Person?

A deceased person is someone who has died. While the word “decedent” also refers to a person who has passed away, it denotes a legal status as well. Essentially, all decedents are deceased people, but not all deceased people are decedents.

The word “decedent” is mostly used for estate planning purposes. For example, you may see this term in a last will and testament, or in estate closure documents related to closing a deceased person’s bank account and filing their final income taxes.

In addition to finalizing an estate, if a person was a party in an active civil lawsuit before they died, the word “decedent” will be added to the party’s name in court documents to signify that a representative is continuing with the case.

How Are Their Legal Obligations Fulfilled After Death?

Decedents have legal obligations after their death. Since they cannot perform these duties, the person they appointed before their death must meet any obligations. These legal responsibilities must be handled according to state law if the deceased person did not name a representative before they died.

Duties that someone has after they die that must be completed by their representative include the following:

  • Notify banks, credit card companies, and other creditors about the death of the individual. Also, government agencies must be notified, including Medicaid, Medicare, and the Social Security Administration.
  • File the decedent’s last will and testament with the probate court. The representative will also be responsible for representing the decedent’s estate in court.
  • Pay any of their outstanding and payable debt.
  • File income taxes.
  • Open a bank account for the estate. The representative will pay bills, debts, and taxes from the new account.
  • Distribute the estate’s assets to the heirs named in the decedent’s last will and testament, or ensure that the heirs at law receive the appropriate property if assets are passed down via intestate succession.

What Is Included in Their Estate?

A decedent’s estate includes all the property they owned when they died. Examples of property included in their estate may include:

  • Cash
  • Property (i.e., their home)
  • Jewelry
  • Vehicles
  • Stocks
  • Bonds
  • Land

Their estate must go through the probate process before the estate is closed. Some property may be included in the estate but is not subject to probate, including life insurance.

What Is a Decedent Trust?

Also called an A-B trust, this type of trust is created between a married couple and dissolves when the first spouse dies. Its goal is to reduce the amount of estate taxes.

If you would like guidance on estate planning for yourself or for administering an estate following the death of a loved one, be sure to consult with your attorney.

Step-Up in Basis and Why It Matters in Estate Planning

Recent news stories may have made you aware of the “step-up in basis” and the current administration’s desire to eliminate or adjust it.

If you are considering engaging in estate planning or you may be inheriting assets, it is important to understand what the step-up in basis is and how it may affect you.

What Is the Step-Up In Basis?

The step-up basis is a provision in federal tax law. It determines how assets are valued for calculating capital gains taxes when a person passes away, leaves these assets to heirs, and those assets are sold.

So, for example, imagine a person passes away and leaves their home to their children through their will.

When the children inherit the property, the home’s cost basis changes. (“Cost basis” is the amount for which an item is originally purchased.) The home’s cost basis is adjusted – or “stepped up” – from what it was valued at when the parent originally purchased the home to its fair market value on the date the parent died.

In this case, suppose the original cost of the home 30 years ago was $100,000, and the “stepped up” basis in 2022 (date of death) is $300,000.

If the children then sell the home for $500,000, the resulting capital gains liability is calculated by subtracting the stepped-up basis from the sale price. This determines the children’s taxable gain ($500,000 – $300,000 = $200,000 gain). The effect is that the capital gain between the original purchase of the home and the children’s receipt of it is eliminated.

In other words, without the step-up in basis, the children who inherited the property would have had a considerably higher taxable gain after the sale ($500,000 – $100,000 = $400,000 gain). As a result, they would then have potentially had to pay more in capital gains tax.

Why Bequeath Assets Through a Will or Estate Plan?

Passing assets, such as the home in the example above, to your loved ones through your will or estate plan means those who inherit are often subject to much lower capital gains tax than if the assets were outright transferred or given to your loved ones during your life.

This is because assets transferred or gifted before death are subject to the purchaser’s cost. Capital gains tax is then calculated based on the differential between the original cost basis and the sale price (after considering any depreciation or other capital gains exclusions that may apply).

What Assets Step Up In Basis Upon a Person’s Death?

The step-up in basis can apply to many kinds of assets, including:

  • real estate
  • personal property
  • brokerage accounts
  • stocks
  • bonds
  • bank accounts
  • businesses
  • art
  • antiques
  • collectibles
  • and much more

Gifting or bequeath these types of assets through your will or estate rather than giving them away during your life can make a big difference for your heirs.

In addition, under federal law, all community and marital property gets a new basis when the first spouse dies. Their death brings the property up to the fair market value at that time. So, a surviving spouse could sell these assets and take advantage of this adjusted basis. And, subject to certain exceptions, the qualifying property of the surviving spouse can also receive a second step-up in basis at their death.

When Does the Stepped-Up Basis Not Apply?

While some assets qualify for a stepped-up basis, some can lose the ability to receive an adjusted basis.

For example, a surviving spouse cannot benefit from a second step-up in basis for assets that had been placed into an irrevocable trust before the first spouse’s death.

The stepped-up basis also does not apply to the following types of assets:

  • IRAs
  • employer-sponsored retirement plans
  • 401(k)s
  • pensions
  • tax-deferred annuities
  • gifts made before death
  • and some other assets

When Are Capital Gains Taxes Assessed?

Capital gains are taxed when an asset is sold (for a profit).

In the above example, if the house is sold three years after the parent’s death for $700,000 (which would mean it increased in value by an additional $400,000 during this time), then capital gains tax is potentially due on $700,000 (sale price in 2025) – $300,000 (stepped-up basis at date of death) = $400,000 of gains.

It is assessed and payable for the tax year in which the post-death sale occurred, and liability effectively shifts to the heirs who benefit.

Why Do Some Believe the Step-Up in Basis Should Be Eliminated?

Many believe the stepped-up basis creates an inequitable tax loophole that allows people with significant assets to shelter these assets from capital gains tax if they dispose of them through their estate.

For example, in the scenario above, if the home was initially purchased for $100,000 and sold by the heirs of the purchaser for $1,000,000 shortly after the purchaser’s death, $900,000 of capital gains would effectively never be taxed.

Meanwhile, someone who sell their assets during their lifetime will likely not get equal tax benefits (even considering the $250,000 personal residence capital gains exclusion) and may face a hefty capital gains tax bill.

On the other side of this argument are those who posit that not having a stepped-up basis can lead to double taxation. From their viewpoint, heirs or an estate would face capital gains tax as well as potentially significant estate tax.

This would likely only affect those with a good amount of wealth, given the current federal estate and gift tax exclusion, which will rise from $12.06 million in 2022 to $12.92 million in 2023. Most people will not fall into this category. Because of this, the tax revenue that the government could raise by eliminating the step-up-basis could arguably outweigh the double taxation issue.

However, this could all change after 2025, when the federal exclusion is set to be cut by approximately half. This will potentially affect a much larger group of people. The argument may not be so strong under those circumstances.

Navigate Estate Planning With a Qualified Attorney

Planning to avoid capital gains taxes is a complex endeavor that a person should only undertake with the assistance of a qualified professional. Every person’s situation is different, and there is no one-size-fits-all solution.

While saving money on capital gains may seem attractive, there may be situations where leaving assets to heirs upon your death may not be the best plan or may create more significant tax issues. In addition, it may not be the best strategy if, for example, you need to engage in Medicaid planning.

Contact your attorney for answers to questions about capital gains taxes and whether you or your loved one may benefit from a step-up in basis.