Your Aging Clients Living Alone: The Dangers They Face

Your Aging Clients Living Alone: The Dangers They Face

Nov 12, 2020 | aging, cost of aging, elderly, handling money for aging parents, handling money for seniors, nursing home

If you have any older clients, this real case is one you should know about. Here at AgingInvestor.com, where we also serve families of your clientele, we see some horror stories and this one should wake us all up. It really happened. We think it could have been prevented if only someone had acted sooner. The names are changed, but the facts are not. Imagine that this 83 year old man is your client. You’ve known him over many years. He is what some refer to as an “elder orphan”. He has no kids, He’s widowed and was always very independent.  No one paid much attention to him as he aged. He had about $1M invested, and his advisor figured that at his rate of withdrawal, he would be fine, probably for his life expectancy. It never dawned on his advisor to ask about his safety at home, whether he needed any help day-to-day, or if he had identified a trusted contact.  Right now, after horrible abuse lasting four years, he is lucky to be alive. “Tony” lived alone and took care of himself. But he was getting frail and it was getting hard to get the grocery shopping done. While at the market, a checker seemed to befriend him and asked if he needed help at home. He agreed that he did. What he didn’t know was that the checker, Mae, who had no caregiving experience, had targeted him. Her evil intent played out. Almost immediately after offering to help, she moved into his house. His advisor never asked about his relationships at the annual portfolio review, and the adage “know your client” was ignored. Mae swiftly got control over his life and finances. The help Tony needed became her weapon. She refused to take him to the doctor or dentist despite severe hip pain and dental problems. He needed food, but she deprived him until he did as she demanded, giving her Power of Attorney. She went so far as to force him to marry her, taking him to another city, and then threatening to dump him there unless he married her secretly. He was helpless to resist. Changes to the authorized signatory on his account happened, but the advisor thought nothing of it. He never asked. Tony appeared to be suddenly married, but the advisor just changed documents and never had a conversation with Tony about it, despite his being 83 at that time. As his “wife” Mae seized his bank accounts, pension deposits, safe deposit box with gold in it, and all of his valuables. She isolated him from everyone who knew him. He was cut off for years, trapped and not knowing how to escape. She hit him, left him in ragged clothing and threw his dog against the wall. He had some memory issues but he did remember he had nieces and nephews. When Mae was out of the house one day, he made a desperate call to his nephew, with whom he had been close in years back. He begged for help. The nephew sprang into action. He summoned his 3 siblings, including one out of state, and together, they rescued Uncle Tony and brought him home. Tony’s nephew knew a lawyer who got an emergency court order to remove the “wife” from Tony’s house. Mae had to be escorted out by the police who initially resisted because Tony and the caregiver were married. It was stunning how the police believed the evil caregiver and not Tony nor his family members. Even with a court order in hand, the police were hesitant to evict Mae. His two capable nieces took over and addressed his needs. One moved in with her uncle to protect him for good. Tony is safe at this time and Mae will never have access to him again. Lawsuits are pending. He may never get his money or valuables back but at least he has his home and some relatives to step in. Some elder orphans have no one. How did this happen while an advisor managing his account saw it being drained by his “wife” over time? This is the most important point of the story for any advisor with aging clients who are alone, with no nearby family to watch out for them. YOU the advisor need to be watching out. The Takeaways Tony, an “elder orphan” made an easy target. Think about your older investors. How many live alone and have no family? It is well worth your time to ask them. Five things every advisor should do with any older client who is living alone and has no family are these:

  1. Check in with your older clients as often as quarterly, rather than once a year. Ask questions about how things are at home. The $700,000 Mae stole from Tony could have paid for a lot of care or help at home.
  2. That suggestion by regulators that you should “try” to get a trusted contact for every client must not be an option. You must insist on getting a trusted contact, especially for elders. (We recommend you get more than one!) Elder orphans may not act promptly when suspicious activity comes up but you can. When Mae made constant withdrawals from Tony’s account, the trusted contact should have been called. He was 83. That’s a red flag by itself.
  3. Know your client. That means general living situation, whether any family is around, and some basics about their health and independence. It’s not nosy to ask. It’s part of your job.

Brutal people taking advantage of aging clients, as Mae did are out there looking for victims. When you know your client, and you are paying attention, you are like the family they don’t have: you can keep them safe. By Carolyn Rosenblatt, RN, Attorney, Consultant

 

Dr. Mikol Davis and Carolyn Rosenblatt, co-founders of AgingInvestor.com

Carolyn Rosenblatt, RN, Elder Law Attorney offers a wealth of experience with aging to help you create tools so you can skillfully manage your aging clients. You will understand your rights and theirs so you can stay safe and keep them safe too.

Dr. Mikol Davis, Psychologist, Gerontologist offers in depth of knowledge about diminished financial capacity in older adults to help you strategize best practices so you can protect your vulnerable aging clients.

They are the authors of "Succeed With Senior Clients: A Financial Advisors Guide To Best Practice," and "Hidden Truths About Retirement And Long Term Care," available at AgingInvestor.com offers accredited cutting edge on-line continuing education courses for financial professionals wanting to expand their expertise in best practices for their aging clients. To learn more about our courses click HERE
An Important Question For Your Clients Contemplating Retirement

An Important Question For Your Clients Contemplating Retirement

Jun 18, 2019 | aging, aging investor, cost of aging, cost of long term care, declining health, elder investor, elderly, finances for elders, financial advisors, financial judgement, long term care, nursing home, resources for senior, resources for seniors, retirement, retirement planning, senior investor, seniors finances

An Important Question For Your Clients Contemplating Retirement

Longevity is increasing, as millions of Americans are living to 90 years and above, the U.S. Census Bureau reports. Will any of these long-lived folks be the parents of your current clients? Some clients reaching retirement age themselves will be dealing with the challenges of their aging family members, even as they plan their own retirement years.

One critical question perhaps not built into your calculations for retirement income needs should be whether your clients can reasonably expect to have to support their aging parents. As reported by NPR citing the Census Bureau report, nearly 20 percent of 90- to 94-year-olds live in nursing homes. Among those 95-99, about 31 percent are in nursing homes. And in the 100+ population, 38.2 percent live in nursing homes. Who pays for that care?

Most financial advisors have a basic understanding that Medicare benefits are very limited when it comes to nursing home care. Post hospitalization, the maximum benefit is 100 days and most people do not receive even that, due to qualification requirements. For those who have to live in nursing homes long term, rather than for shorter stays involving rehabilitation such as physical therapy, the costs are paid out of pocket. The exception is for the lowest income elders. For them, Medicaid pays the cost of long term nursing home care. For everyone else, a long stay in a nursing home can wipe out an older person’s assets. The financial burden then falls on family who may have the means to prevent the impoverishment of their loved one.

Some adult children will not allow Mom or Dad to live in a nursing home long term. Maybe it was a promise they made to the aging parent. Essentially, it is no one’s first choice of where to go when care is needed. If a family has some assets but does not want to wipe out their own retirement income by paying for nursing home care or even full-time home care, the most cost effective solution is to take in the aging parent.

There is a cost involved in this choice as well, and it extends to many factors beyond money. Every family relationship in the household is impacted. Some adult children are not patient, not willing and not good at caring for an impaired aging parent in declining health. For others it is seen as an honor and a final chance to give back to the parent in gratitude for what the parent did for them over a long lifetime. Individuals vary in their perspectives, ability and willingness to take in an aging loved one.

Some families take in an aging parent and pay for part-time help, providing a significant part of the caregiving themselves. Others pay for assisted living for an aging parent, but that is not suitable for those who need care around the clock. Others allow a parent to spend down their assets until they can qualify for state paid nursing home care. The parent is then placed there somewhat as a last resort.

No matter what choice a client will make about an aging parent, it is important that the financial professional in their lives helps them see the big picture and plan according to anticipated needs for both the client and the elders for whom they feel responsible.

The Takeaways

  1. Longevity is creating an issue for families who are facing years of decline in aging parents who may not have the means to pay for care on their own.
  2. Responsible financial advisors must raise the question with every retiring client: is there someone in your life that you will likely have to support financially during your retirement?
  3. Advisors and families alike must consider and plan for how any essential financial support should be handled by adult children of aging parents. Take in the parent? Supplement the parent’s income by paying for home care or assisted living?
  4. When the means are not available to offer financial support, and the physical needs for care are extensive, it sometimes becomes necessary to allow the aging parent to become impoverished and to qualify for Medicaid. Medicaid does pay for long term nursing home care.
  5. For those with sufficient investment income expected, financial support for aging parents can be part of an overall retirement planning strategy. It is up to the financial professional to help with this process.

 

Carolyn L. Rosenblatt, RN, Attorney, AgingInvestor.com ©AgingInvestor.com™

 If you the financial professional need a clear explanation of the actual costs of long term care, whether at home, in adult day centers, assisted living or skilled nursing, get the facts so you can plan with clients. It’s all laid out for you in Hidden Truths About Retirement & Long Term Care, available now. Click here to get your print, digital, or audio copy.

About Carolyn Rosenblatt and Dr. Mikol Davis

Carolyn Rosenblatt and Dr. Mikol Davis are co-authors of The Family Guide to Aging Parents (www.agingparents.com) and Succeed With Senior Clients: A Financial Advisors Guide To Best Practices. Rosenblatt, a registered nurse and elder law attorney, has more than 45 years combined experience in her professions. She has been quoted in the New York Times, Wall Street Journal, Money magazine and many other publications. Davis, a clinical psychologist and gerontologist, has more than 44 years experience as a mental health provider. In addition to serving his patients, Davis creates online courses and products to assist professionals and the public with understanding aging issues. Rosenblatt and Davis have been married for 34 years.

Planning for Longevity: It’s Not About “Housing”–It’s About Care

Planning for Longevity: It’s Not About “Housing”–It’s About Care

Feb 5, 2019 | aging, cost of aging, cost of long term care, custodial care, declining health, elderly, finances for elders, financial advisors, handling money for aging parents, handling money for seniors, health, long term care, nursing home, resources for senior, resources for seniors, retirement planning, seniors finances

The financial services industry often refers to retirement planning for the future with aging clients in terms of “housing choices”. This reflects some degree of misperception about what happens as we age. For healthy people of retirement age, there is little interest in planning for the need for care and planning for loss of independence. People usually resist talking about it. We don’t choose to lose our independence. It happens. It is up to the advisor to raise it if you want to advise for longevity. The subject is emotional and can be difficult.

Where we need to get help when we can’t be independent any longer is really a choice about care, rather than housing. This is not house shopping.  Does a client want to pay for care in her own home when that time comes? Most would say yes, they want to remain at home. They then must calculate what a home care worker costs and whether that is the best way to receive the help they are likely to need one day with their activities. Can the resources be available to enable that choice of where care will be given?

If an elderly client is living alone and can’t manage at home anymore without assistance, there are indeed choices, often driven by the degree of care needed and the cost of getting it.  Elders may not be interested any longer in maintaining a house, cooking, shopping, and other necessary chores. For them, assisted living may be desirable because their daily lives will be different and free from the burden of the household that has become unmanageable. The choice to go to assisted living is usually not one a client is going to make because of wanting to downsize into an apartment for its own sake. Rather that is the price of going to the place where assistance is on hand. Again it is to receive care, not because they love the idea of not having their home any longer. For many elders, downsizing from a house to an assisted living apartment is a difficult adjustment, required because of physical or mental changes of aging. From that perspective it is a choice forced upon them.

A factor every advisor should know is that the likelihood of living alone increases with age. Almost half of women age 75+ lived alone in 2010, according to the Institute on Aging. The “choice” of a different living arrangement is brought on by safety and care concerns, often raised by their adult children.

It will be good for every advisor who wants to help clients plan for longevity to consider that their role is to introduce the issue of possibly needing care in the future, as about 70% of us will one day. If your client has you in her life, she already has housing. Planning for “housing” is a misnomer. Focus on places and choices where care can be delivered. Having no care plan can be disastrous, as sudden health crises can force decisions without considering the cost of care in advance.

In helping to educate your client about where he or she can receive care, the costs of all the offerings available in most areas are spelled out in detail in our book, Hidden Truths About Retirement & Long Term Care. You can develop quick expertise on the subject there. Skilled advice about longevity for your aging clients requires knowing your numbers, what care options are available where they live and how much they can expect to spend for that care. Smart advisors gather the data before a crisis happens and urge clients to look at it with them.

By Carolyn L. Rosenblatt, RN, Elder law attorney, AgingInvestor.com

Where Will Your Client Live In Older Age?

Where Will Your Client Live In Older Age?

Jan 30, 2019 | aging, aging in place, cost of aging, cost of long term care, declining health, diminished cognition, elderly, finances for elders, financial advisors, financial capacity, handling money for seniors, long term care, nursing home

Most advisors who even ask this question of their retirement-aged clients never spend time on it. About 90% of those asked say they want to remain in their own homes as long as possible.  That sounds fine. Until one faces physical decline, cognitive impairment or both. The advisor providing competent guidance about financing aging at home had better know the facts.

None of us like to think about losing physical ability or needing help. We abhor the thought of losing our total independence. In our view at AgingInvestor.com, the only advice clients are getting is about the long term picture is whether or not to purchase long term care insurance. Since most people don’t do that, the actual costs of living at home can boggle the mind. It’s the best advisor’s obligation to educate your client about the risks of the plan to age in place, just as it is your obligation to educate them about balancing their portfolios. You are giving the client added value if you take the time to talk them through the risks and dollars they may need to have available.

Here are some briefly stated facts from a real case in which an 89 year old wanted to age in place and his wife promised he would never have to leave home.

At the outset of his declining health, he had about $3M in invested assets. His portfolio was healthy and balanced for his age, according to conventional wisdom. He began to lose his ability to walk due to multiple medical problems. His wife hired home helpers, three days a week at first. As his conditions progressed he needed more and more help.  He had to have a wheelchair, and a special van. A stair chair was installed in their two-story home. By the time he reached age 95, he was spending over $150,000 a year on care and assistance around the clock. In the space of time during which he was steadily losing independence until he passed away at 95, his assets were depleted to the tune of $2M. He lived in a higher end market for the needed help but the reality is that in any market, the kind of care he needed would be very expensive.

For him, aging in place was more costly than a skilled nursing facility would have been. Home modifications, private caregivers, (none of whom were licensed nurses), equipment, medications, adaptive devices, etc. drained his resources by 2/3. And not everyone has as much invested as he had to even start the journey. His wife had her own assets and she paid the cost of household maintenance, taxes, food, and utilities with her funds. Had she relied on him for those things too, there would likely have been little left at the end of his life.

It is not all doom and gloom however. Many clients live rather well in their last years without all the care this gentleman needed.  Some get by with family caregiving help, and some have fewer medical conditions. But if you are going to competently help your clients plan for longevity, it’s essential to understand the real out of pocket costs of aging in place or anywhere else outside the home. If you want to add value to your services to older clients, know what they need to know to properly anticipate what can happen with living into one’s 90s and beyond.

Learn all the actual costs of care for every aging client option in our book, Hidden Truths About Retirement & Long Term Care. Be well prepared to walk your client through the scenarios they could face in their futures.  You distinguish yourself from other advisors when you sharpen your knowledge in planning for longevity.

 

By Carolyn Rosenblatt, RN, Attorney, AgingInvestor.com

Advising for Longevity: Why Advisors Must Consider Older Clients’ Health Issues

Advising for Longevity: Why Advisors Must Consider Older Clients’ Health Issues

Jan 28, 2019 | aging, aging in place, aging investor, cost of aging, cost of long term care, custodial care, declining health, diminished cognition, elder investor, elderly, finances for elders, financial advisors, financial capacity, financial elder abuse, financial judgement, handling money for seniors, health, long term care, nursing home, resources for seniors, seniors finances

Your clients are getting ready for retirement. You’ve done the calculations, balanced the portfolio and advised them of what income to expect. You’ve discussed how much spending is ok. You used your program and your analysis was thorough. You’ve done your job, right?

 Not exactly. There is probably no algorithm nor program that will calculate your client’s individual profile of health risks that will likely lead to the expense of long term care.  That can be a whopper. Maybe you’ve suggested long term care insurance. Most people don’t choose to buy it. For those who do, the benefits are limited and the “elimination period” (deductible) is thousands of dollars. There go your careful calculations. At least 90% of folks don’t have that coverage. Now what?

 But how can you predict what’s going to happen to anyone’s health in retirement, you ask. You can’t be precise, but you surely can make some rational observations and give advice accordingly.  Those observations consist of two parts: what you can see with your own eyes and what you can glean by asking a few basic questions.  If you think asking any client about their health conditions is too nosy or not your job, consider that if the client needs long term care and runs out of money because of it, they’re not going to think much of you. And the cost can wipe out their security.

 Asking about health issues is not nosy at all. Rather, it’s what any smart advisor planning for longevity must do. Let’s not keep pretending that everyone stays the same physically and mentally from the start of retirement to end of life.  Our bodies go through wear and tear and things break down. Cognitive decline affects at least a third of people who reach the age of 85. The risk of Alzheimer’s disease keeps climbing after that.  Now, what was that life expectancy you were using in your calculation? Was it age 99?

 Let’s start with what you can see in your client with your own eyes. (If they’re not in front of you, perhaps Skype is an option). Is your client obese, as about 40% of the U.S. population is?  This leads to heart disease, stroke, and diabetes, among other diseases and conditions.  The medical care people receive in many cases will save them from dying but they then live with disabilities. And yes, they will be very likely to need expensive long term care. Neither health insurance nor Medicare  will cover long term care. Such help as a part time caregiver at home is how most folks start out with long term care. Your client pays out of pocket most of the time. Did you calculate how much it costs as well as how long they will likely need it? If they have multiple medical conditions, and have started long term care, they’ll probably continue to need some form of it for all their remaining years.

 Find out what you may not know from simply observing your client’s appearance by asking questions.  You can make your own list or get a health care provider to help you with a few targeted questions. You will need to educate your client as to the reason why you need this information. It’s to help them plan for how much to save in their retirement years.

 Here are some examples of basic questions that can help you predict the need for possible long term care:

  1. How’s your health these days? Has a doctor told you that you have any long term conditions?
  2. Are you taking medications? What are they for?
  3. Do you smoke?
  4. Are you concerned at all about any health issues you have at this time?

Do you recall your parents’ ages when they died?Your aging clients will not be eager to talk about the potential need for long term care. When you told them about what to expect for “out of pocket medical costs in retirement”, you did not give them a figure that included long term care. Long term care is not “medical” according to Medicare. Rather, it is called “custodial care”. The client probably will not bring it up, so you must do this.

 When you have done your observations and gotten answers to your health-risk related questions at least there is a place to start a meaningful conversation. You can give them figures as to the cost of typical kinds of care, such as a non-medical home care worker. We at AgingInvestor.com recommend starting your projections at age 80 as to when a person might need physical help. Many of us know someone who did require help with at least some part of his or her life at that age. Then you can talk about how any condition your client identifies for you, such as high blood pressure, diabetes, etc. as shortening normal life expectancy and increasing the risk for needing help.  If your client already has difficulty with some normal daily activity such as walking or bathing, they are definitely at high risk for needing paid help sooner than a person without these problems.

Clients may be completely unaware of such things as the hourly cost of a home care worker, what assisted living costs each month and what home modifications cost if they are able to remain in their own home. You can find a thorough discussion of these and many other parts of long term care in our book, Hidden Truths About Retirement & Long Term Care, written specifically for financial advisors like you.

 Every conscientious advisor needs to wake up to the reality that your retirement income calculator omits the reality check of health problems. We’re not talking about nursing homes, but every other kind of care and help most people will need as they age. If you do want to help clients who are reaching retirement age to plan realistically, include the health risks you can see or learn about by asking.

By Carolyn L. Rosenblatt, RN, Elder law attorney, AgingInvestor.com

Three Things You Need To Know About “Out Of Pocket Medical Costs” In Retirement

Three Things You Need To Know About “Out Of Pocket Medical Costs” In Retirement

Sep 14, 2017 | aging, aging investor, cost of aging, custodial care, elder investor, elderly, finances for elders, financial advisors, nursing home, senior investor, seniors finances, wealth transfer

You’re trying to help the sixty-something clients plan for what they can anticipate spending for medical care in the future. You tell them about the average amounts a couple retiring at age 65 will need. The language seems fuzzy. Are you, the advisor, completely clear about what the term means when you say “out of pocket medical costs”?

That which is “medical” and what is paid by Medicare does not seem to be clear to many financial professionals we’ve interviewed. If you want to help your clients plan adequately for retirement, here are some critical points you need to make with them.

Medicare never paid for what it calls “custodial care”. This is not medical care by Medicare’s definition. It did not cover it in the past and it does not pay for it now. There is a distinct and very important difference between what it covers and what most people need over the long run in their retirement years. If your idea of “out of pocket medical costs” is hazy, let’s clear it up right now. This is a list of things Medicare doesn’t pay for, which just happen to be the most common things people need as they age. This is only a partial list.

 Nursing home (“rehab”) after a limited number of days. The maximum coverage depends not on how sick the client is, nor how much help they really need due to such disabling conditions as a stroke, nor how they feel. It depends solely on what the nursing home administration decides about whether they are continuing to make the right kind of progress. That progress must require skilled care which can be nursing, physical, speech or occupational therapy. There may be 100 days available for coverage, but this does not mean that all of it will be covered or that the person will get that much in the rehab facility. If it is decided that there is not enough progress, the person’s care is termed “custodial” and they are cut off from Medicare.

Home Care. Millions of people who are released from a nursing home after surgery, an emergency or a fall, for example, need help at home either short term or long term. Medical events change us and can rob us of complete independence. There is a false belief around that Medicare will cover what you need if you have to have home care. This is true only for a very short time and only if skilled, licensed nurses or therapists are needed at home. Most of the time, a person is cut off from help when leaving a facility and has to pay for home care out of pocket. The national average hourly rate is $20, which can eat up one’s assets quickly in a fairly short time frame.

Help at home to stay out of a care facility. A lot of folks think they’ll live to be 100 years of age. No one discusses with them what it would mean to live that long without being completely independent. Help costs money. Many people assume that family or someone will take care of them if care is needed. But not everyone is willing to or capable to undertake what is often a serious burden. Even when family does take on caregiving, they need a break, and relief. Then help from outside must be hired. Without constant help many older people would have to be in a care facility. Does it make sense that when assets are largely all spent, Medicaid will pay for a nursing home but Medicaid will not pay for preventing the need for a nursing home, a far more economical alternative? Of course not, but that’s how it works.

The Takeaways

Fully two thirds of us will need long term care at some point in our lives. Unless the client is the rare one with long term care insurance, there is no way to pay for long term care other than to do so out of pocket. Sometimes this depletes all the client’s assets and leaves them with no choices in the last part of their lives. For those who live into their 90s and beyond, the need for some kind of long term care by family or a facility seems almost inevitable. Your clients need to stop pretending that it’s not going to happen to them, and you, the professional must steer them in the direction of saving and anticipating this need as much as you can. They will resist! Keep trying. Educate yourself first. You can get all the facts and figures you need to have a wise conversation with your older clients in our new book, Hidden Truths About Retirement & Long Term Care. Get your copy now and start adding value to those retirement discussions with your clients.

Click HERE to order.

By Carolyn Rosenblatt, RN, Elder law attorney, AgingInvestor.com

 

Dr. Mikol Davis and Carolyn Rosenblatt, co-founders of AgingInvestor.com

Carolyn Rosenblatt, RN, Elder Law Attorney offers a wealth of experience with aging to help you create tools so you can skillfully manage your aging clients. You will understand your rights and theirs so you can stay safe and keep them safe too.

Dr. Mikol Davis, Psychologist, Gerontologist offers in depth of knowledge about diminished financial capacity in older adults to help you strategize best practices so you can protect your vulnerable aging clients.

They are the authors of "Succeed With Senior Clients: A Financial Advisors Guide To Best Practice," and "Hidden Truths About Retirement And Long Term Care," available at AgingInvestor.com offers accredited cutting edge on-line continuing education courses for financial professionals wanting to expand their expertise in best practices for their aging clients. To learn more about our courses click HERE