BLIND SPOT: What You Don’t Know Can Cost You over $7,000 a month.

I was speaking to another elder law attorney (practiced in a different state) about a unique client he had – it was a judge’s mother. That judge knew what you are about to learn in this article. When a family member goes to a nursing home, it impacts the entire family. In the Chicago metropolitan area, the average cost of nursing home care in 2018 was $7,330/month for a semi-private room and $9,353/month for a private room. At these monthly rates, even someone who planned ahead for retirement will have their estate substantially depleted. This does not even address the additional medical costs one typically incurs in their golden years. Too often prescription drugs and treatment are only partially covered by their insurance, leaving seniors to pick up the gap at a time in their life when they are least able.

The reality is that cost burden falls to the family members and the government. In short, the judge knew that without planning if his mother needed institutional care, she would burn through her estate, and then the need to go on public assistance care. He wanted more for his mother. The more money this judge had available, the better care he could provide for his mother. The sad truth is that when I raise these issues, very few people know how the system works. Thus, when adult children and their parents come to see us, we review the parent’s assets, analyze their future earnings, and restructure their estate. By shifting the way assets are owned, including the use of irrevocable trusts, and other arrangements such as caregiver agreements, we are able to lay out a plan to extend the seniors savings and getting them government assistance sooner. The surplus funds are used to upgrade the senior’s care and preserve the senior’s estate. Otherwise, the senior can face nursing home poverty. The judge knew the outrageous costs of caring for a loved one and therefore planned ahead to insure his mother would have a quality care.

It is never too soon to plan, because what you do not know, can be very expensive both financially and in quality of life. Planning ahead is critical.