A Long Term Care Plan

Geico asks, how would you love a chance to save some money on insurance?

Of course you would. And when it comes to great rates on insurance, Geico can help. Like with insurance for your car, truck, motorcycle, boat and RV. Even help with homeowners or renters coverage. Plus add an easy to use mobile app, available 24 hour roadside assistance and more and Geico is an easy choice. Switch today and see all the ways you could save.

It's easy. Simply go to Geico.com or contact your local agent today. This is the Truth Network. Welcome to Finishing Wealth, brought to you by CardinalGuide.com, with certified financial planner, Hans Scheil, bestselling author and financial planner, helping families finish well for over 40 years. On Finishing Wealth, we'll examine both biblical and practical knowledge to assist families in finishing well, including discussions on managing Social Security, Medicare, IRAs, long-term care, life insurance, investments and taxes. Now let's get started with Finishing Wealth. Finishing Well is a general discussion and education of the issues facing retirees.

CardinalGuide.com, Cardinal Advisors and Hans Scheil CFP sell insurance. This show does not offer investment products or investment advice. Welcome to Finishing Wealth today. We've got a little surprise for you.

It's not with certified financial planner, Hans Scheil, it's with certified financial planner, Tom Griffith. We're so excited to have you with us as the full, you know, we've had you on the show before, Tom, but we've never had you actually as the host. So that's pretty exciting. Yeah, no, I'm excited as well. And so this show today is a little different.

We talk about long-term care many times, but today we're talking about a plan, not how to fund the plan, but actually what is the plan for you, as the case may be. And to talk about that, you know, from a Christian perspective, I don't know if you're familiar, but I hope you are, with Corrie Timboon. She was a wonderful Christian lady that helped the Jews during World War II, protected many of them. Her family did there in Holland when they were being sent off to concentration camps. And unfortunately, one of her fellow Dutchmen betrayed them and turned them into the Nazis. And she, her father was actually put in prison, died within a short period of time, her brother as well. And she and her sister both went off to the worst of the worst concentration camps, her sister dying within a few months of that. And then Corrie went on to this phenomenal ministry. And I hope, you know, you've seen her movie that Billy Graham did, or her books, or are familiar with her ministry, which you may not be familiar with, that she had a stroke when she was 83. And the last five years of her life, she was silent. In fact, there's a neat book called The Five Silent Years of Corrie Timboon. And the point was, is that for her, you know, God provided her with some wonderful people to help her. You know, I've seen interviews of the British lady that was her personal assistant during this time, and that she knew Corrie so well, she could read things through her eyes. And, you know, God just helped her to have a plan for that particular situation.

And she had the work to come up, she had the people to do the legal things for her, because really, she just wasn't able to speak the last five years of her life. And so, as we, not necessarily so easy, think about how we're going to plan for these things. Tom, it's critical to just have a plan, not just the funding of the plan, but you know, what are we going to do?

Yeah, I think that's exactly right. And so oftentimes, on this show, and in our practice, we jump to talking about the insurance, long term care insurance, and how do we pay for this. And we miss, and I think it's important to think about what the plan is initially, is you need to have a plan in place. The insurance can be a way to fund that plan, but without that plan in place from the beginning, you know, it's hard to know what to do.

And so, we have a video that we've put up on our YouTube channel that really has walked through what the plan really entails, and then we can talk about how to fund that. And so, I have an autoimmune disease, I'm young, if you don't know me, I'm much younger than Hans is, and about three years ago, I ended up in the hospital and was there for about a month, and then left in a wheelchair. I mean, I couldn't walk for three or four months, and it was just out of nowhere.

I mean, no notice, no sign that it was coming, and it just hits you. And so, fortunately, I've recovered well, but you know, I had some of these documents in place already, fortunately, and then my wife stepped in, and she really had to provide a lot of the care, and that's what ends up happening, is this burden gets put on the family members in absence of a plan. And so, when we're talking about a long-term plan, we're really talking about several factors, the first being just the legal documents to allow someone to step in and provide the care, or answer questions, or make decisions on your behalf. And so, those are really come down to several ones, but kind of the two most important ones are going to be a healthcare power of attorney, and then a durable power of attorney, or a financial power of attorney. And these are documents, legal documents, that you have stated who you want, and who has the ability to make decisions on your behalf.

And so, the healthcare one is around healthcare decisions, you know, surgeries, you know, should we go into this facility, should we not, should we go home. I mean, any time there is a healthcare decision that needs to be made, and you are no longer able to make it, that healthcare power of attorney is going to step in and do that for you. Yeah, and for a lot of us, you know, that's where you tell people, look, I don't want to be artificially kept alive for years, you know.

That, you know, that's part of that, the importance of that document, right? Oh, exactly, and then that can be also, can be sometimes taken into account under what's called a living will, or an advanced directive, but sometimes those are combined. But yeah, it's telling your loved ones instructions of what you want to have happen, and really the, you know, it's good to have these conversations with, you know, your spouse is oftentimes who's named as the power of attorney. We do make the point as if you're, you need to name contingent power of attorneys as well, and so if you think about this, you know, hopefully you're not going to need this document for years into the future once you get older.

And your wife or your spouse or husband is going to be similar age to you, presumably, and so it's important to have someone else who can step into that role. And so Hans, and he goes over this in his video, his wife, Rhonda, is named as the power of attorney, and his two sons are named as contingent power of attorneys. And when this plays out the way he thinks it will in the future is it's going to be his son stepping in and really helping provide that care. And so you need to really think through who those are going to be, and sometimes it's more obvious than others.

You know, sometimes we have single people come in that don't have kids. We don't have someone who is naturally going to be able to step into that role, and they'll oftentimes name nephew or nieces or someone that they trust through the church, someone that they know well that can make those decisions for you. But the healthcare power of attorney allows them the ability to make those decisions. The financial power of attorney... Well, I was just going to say, Tom, that it leads to a really important conversation, right, between you, your spouse, or this person that you're going to name, right, that they... It leads to a conversation before you name them on a legal document that, you know, that they are aware of what you're doing, and it really is just a big part of the plan that gets implemented that there's a plan, right?

Oh, sure. Yeah, I mean, it does lead to... I mean, you need to have the conversation with them, and then part of that conversation is, one, them agreeing to do this, but also kind of understanding what you want to have happen. And so I think that kind of leads into, you know, the financial power of attorney does a similar role on financial institutions, banks, investment accounts, you know, can make real estate transactions. They can really help with the funding of things, but that kind of leads into the overall point we want to make on this video is you need to have those legal documents in place to allow for your loved ones to make decisions for you, give them the legal ability to do that. But you still need to have a separate plan in place, really a written-out plan of how you want to receive the care. And so that's different than the legal documents. The legal documents give them the right to do it, but then the long-term care plan is really where you're laying out, you know, where do I want to receive care? Is that at home?

Is that not? I mean, I think, Robbie, you had... your dad was kind of in this situation. I don't think he had necessarily a plan, and so maybe you can talk a little bit about what that looked like when it came time to have him go somewhere. Yeah, we definitely lived it out, and just to begin with, you know, fortunately, about six months before he fell, I had started doing the show with Hans. And so we had just finished his, you know, power of attorneys and all that stuff.

It's fascinating to me how we just got it done. And almost immediately after he fell, some people came in and essentially ripped him off, selling him this alarm system, charged him over $12,000, told him a bunch of stuff because he was just kind of incapacitated. We didn't happen to be at home the day that they called on him, and the next thing he knew, he was on the hook for $17,000. He had no understanding of what had happened. But because I had that power of attorney and got involved in it quickly, we were able to totally unwind about what would have been, you know, I don't know, $10,000, $15,000 problem because I had the documents.

But you're right. He didn't have... we had never had those discussions of, Dad, what do you want? And I wish, you know, I could have a redo, like go back, you know, six months before he fell and be able to have those conversations with him because I think the last year of his life would have been a lot more pleasant.

Sure. And unfortunately, we see that happen all the time where there weren't these conversations, and these are not fun conversations to have. I mean, you're talking about possibly needing help with doing things that you kind of hope you never need help with.

And so they're not fun to have, but they are extremely important. And some of the things that you need to talk about and really write down in this plan is where you want to receive care. Is that at home? Do you want to go to a facility? We have some clients that a lot of times these are single people that they would prefer to go to like an independent living or an assisted living facility as opposed to staying home because it just can be lonely at home. I mean, if they're needing help and they can't get out and they're at their home by themselves, that can be lonely. So some people want to go home.

I would say more times than not, they want to stay at home as opposed to go somewhere. And that's an important piece of like I want to receive my care at home, you know, and under all, you know, if my health allows it, then I can stay here. Another part of the plan is paying for the plan. Sometimes we have or a lot of times we have people come in, we're doing financial plans for them, and they have plenty of money. They can fund, they can pay for this care just out of their money and not really be any issue. But it becomes a problem of the kids are coming in, their dad has fallen or their mom has fallen or they might have dementia. And they have this money and they know they have this money, but they don't know which money to use to pay for the care. And so having, it would have been very helpful in those scenarios to have the parents write down, okay, here's the account that you go to first to pay for my care. You know, I want you to sell this piece of real estate. I want you to go to my IRA.

I mean, whatever that plan is, you need to have something written down telling them how you want them to pay for the care that you're going to potentially receive. Part of that is tax implications. Okay, if you go here and sell here, does that incur taxes? I mean, do we pull it from the IRA and have the tax bill that accompanies that? Do we sell property and have the capital gains?

I mean, each taxation is a little bit different. And it's important to think through what you would want to have happen in that scenario and then communicate that with your loved ones so they know how to pay for the care once they know where that care is going to be provided. Wow, you can tell we were loaded for bear today on a long-term care plan. And we're just talking plan here for the most part today with Tom Griffith. He is a certified financial planner with CardinalGuide.com, who brings you the show. CardinalGuide.com, usually a Han Shyle. We talk about his book, The Complete Cardinal Guide to Planning for and Living in Retirement. It's all there at CardinalGuide.com. And then, as Tom was mentioning, they did a beautiful video on this very idea of creating this plan with a board that shows you all sorts of things that we're talking about. And that's there at Cardinal Advisors at YouTube. So Cardinal Advisors on YouTube or at CardinalGuide.com. And again, you can contact Tom there or you can contact Hans.

And we're going to be right back with a whole lot more on long-term care plan. Hans and I would love to take our show on the road to your church, Sunday School, Christian, or civic group. Here's a chance for you to advance the kingdom through financial resources by leveraging Hans' expertise in qualified charitable contributions, Veterans' aid and attendance, IRAs, Social Security, Medicare, and long-term care. Just go to CardinalGuide.com and contact Hans to schedule a live recording of Finishing Well at your church, Sunday School, Christian, or civic group. Contact Hans at CardinalGuide.com. That's CardinalGuide.com. Welcome back to Finishing Well, a certified financial planner today, Tom Griffith.

And of course, always brought to you by CardinalGuide.com. We'll probably have Hans back next week, but today we're talking about a long-term care plan. What exactly conversations need to be had and what kind of legal documents need to be had before we ever get to the funding part. We're going to talk about that, but I know that just by listening to this broadcast, I'm hoping you're going to get some information that would be really, really helpful. Because when I went through this with my dad, we just did not know what our options were. So after he fell, he broke his neck, and he was having trouble walking again. And so they were like, well, we've got to go to rehab. Well, we did not know that we didn't necessarily have to go to rehab. You know, it was something I found out later that not only could we have taken him home at that point in time and what he was getting at rehab, he would have gotten at home. You know, that would have been paid for through actually, at that point in time, his Medicare...

Supplement? Yeah, his Medicare supplement would have paid for it. And he never had to go to that rehab, which was essentially at a horrible nursing home that was just... He ended up falling there again because of the way they took care of him. It just made so much worse had we not realized that we could have gotten that care at home.

It could have been really a big difference in his life. So we're just hoping that through listening to this, maybe you can hear that, hey, when they just say you've got to go to rehab, no, you don't just have to go to rehab. You can get that care at home and if you've got the right stuff in place, right, it can get paid for either through your insurance or my dad would have had the money to do it at home too and it would have saved... Oh, the aggravation it would have saved, Tom. Yeah, no, I think that's a very important thing to know is that you have options. And the doctor or if you're at the hospital, generally this starts at the hospital, is they might provide the options or they might just say you have to go somewhere and they don't really tell you there's an alternative.

And a lot of times the hospital, especially the nurses that you're talking to, they don't understand how the insurance works either. And so they might be thinking you don't have any choice. And so it is important to know that there are options. You really need to have an advocate there helping you because sort of by definition it's hard for you, you don't know what the options are and you really just focus on trying to get better. And it's important to have these conversations with your family, whether that's spouse or children, to be able to step in and really look after you and really make sure the right things or the decisions are made on your, the best decisions are made on your behalf. And to Robbie's point, a lot of times you don't even know the options.

So hopefully through the listening and hopefully listen to more than just this episode is that you can really, you know, come to learn what some of these options are. What I thought we could do on this kind of next half of the show is talk through a case where we had someone come in that was worried about long-term care. We helped them put the plan together and now we were working on how to fund this plan. And so this husband and wife had a pretty large IRA balance.

You can do this with smaller balances, but they had a large IRA balance. He's a doctor in another state and was really worried. He'd seen this happen in some of his patients and some family members of really needing an extended amount of care, something that lasted for a while. And so he came in with the goal of wanting lifetime benefits, which there are some companies out there still selling lifetime long-term care benefits. And he was interested in what's called a hybrid long-term care policy that mixes together life insurance and long-term care. And so what he did was he put an initial transfer from his IRA of $350,000 into this long-term care hybrid policy. What he got for that was a death benefit.

And again, this covers both him and his wife. And they've got a death benefit of $366,000 where if he never needed care, him or his wife never needed care, they would have this death benefit that they go to their kids. But if they needed long-term care, it would pay $11,000 a month forever, for a lifetime. So if they needed it for 10 years, it would keep paying out for that amount of time. And so we don't need to get too far into the specifics of the policy, but this was the plan they had in place to help pay for this long-term care plan.

The insurance in place to pay for the plan that we put together. And their goals were to stay at home or if they had to, go to an assisted living facility. They wanted to bring, you know, help people, professionals coming in to provide the care while the healthy spouse was kind of coordinating it. And then the nurses or the care providers were coming in and doing the heavy lifting. And so a lot of times we have clients that come in and say, my family is going to provide that care for me. And it is true, your family is going to be involved, but you really need to think through, do you want them doing the heavy lifting?

Do you want them doing the bathing, trying to get you in and out of bed, getting you transferred? Or can they even do the heavy lifting? Like I found out, you know, I'm a pretty big guy, and my dad had lost a ton of weight. But when it came time to him, when he actually was on the floor and I couldn't get him up, I mean, we ended up having to call the ambulance. You know, there was nothing we could do.

We couldn't get him up. And so, yeah, are they even going to be able to do the heavy lifting? And also I wanted to mention two real quick, Tom, that it was $11,000 apiece. And so if they were both in facilities, it'd be $22,000 for life, as long as they needed it a month. Yeah, that's exactly right. And so, you know, there is a scenario if both of them got sick at the same time, it is $11,000 per piece. So they could get potentially $22,000 a month, which is not what we're hoping for. I mean, that means they're needing care.

But if that were to happen, it's a really nice benefit to be coming in to help pay those expenses. And I think to piggyback off Robbie's story, so I was sick. I mentioned earlier in the show, but one of the, you know, now it's sort of funny, at the time was not, but I had been in the hospital for about, I don't know, maybe it was a week or so, and I was feeling pretty gross at this point. I really wanted a shower, and I had convinced myself that I could make it to the shower. With the use of a walker, I could get there and bathe. And about halfway there, my wife was there kind of helping me. About halfway to the shower, we realized we're not going to make it. I just wasn't strong enough to do it.

And so now we're stuck there with the walker. She's trying to hold me to keep me from falling, trying to call the nurses to come in and get me. And it's just, you know, she's strong. She's young and strong, and she physically could not move me to get me back into bed to stay safe. And so fortunately, I didn't fall. I didn't get further hurt. But oftentimes what ends up happening is you fall again, you get re-hurt, and then it just makes matters worse.

And so you really want professionals doing that harder stuff that maybe, you know, you haven't been trained to do it. And then, you know, the end of that story is the nurse came in. She was smaller than my wife, but she manhandled me back into bed because she just knew how to do it. She had been, you know, she knew all the tricks of the trade, if you will. But back to the long-term care. So the couple came in, and they were all on board. They applied. And then what happens is the wife gets declined because there is underwriting for that policy.

And so she, they applied, they were all for it, and then they turned her down, which can happen. And so now we're sort of back to the drawing board where the husband and the wife still need this care. They still need something to help pay for this plan they've put in place. And so what we did was the husband was able to get the policy. It cost a lot less because now it's only covering one person. And so that was like about $225,000 or so as opposed to $350,000. So, you know, we still did the IRA transfer for a much smaller amount. Still provided the $11,000 a month of benefits for a lifetime, but it was just on him. And then for the wife, we switched over to look at a short-term care policy. And so this is actually the same policy that Robbie bought for himself. But what it does is it would pay a— And my wife, too, by the way.

Yeah, we both have it. Yeah, for Robbie and his wife. Yep. So it's a very good policy. It's not lifetime benefits like the other one, but what you get is you get a year of care at home, which is tremendously helpful if you need it, and then a year of year care at a facility, like an assisted living or a nursing home. And so there's separate benefits. You have potentially two years' worth of care, and the real key on this policy is the underwriting is much less expensive. It does not cost nearly—well, the premium is less, but it also is less restrictive in who can qualify, who can actually get the policy. And so this worked out really well.

The wife could answer all the questions, no. We put in the application. We kind of maxed the policy out for her, where she gets about $9,000 a month at a facility and then $1,200 a week for a year of home health care to really help cover her portion of that, and then the husband still has the bigger policy. And so all of these are ways to help fund the plan. But I think to take it back to the initial point is you need to have a plan in place kind of specifying who's going to provide the care. Where do you want that care provided? In their plan, they wanted the insurance to pay for the benefits. Some people say, I just want to do this out of my IRA. I want to use my property to pay for the care. Or whatever that funding mechanism is, that is an important piece of the overall plan, and then insurance is just one way that you can help fund that.

Right. And we want to always point out that, unfortunately, when you're looking at these things when you're 65 versus when you're 85, you see things differently. Because my dad, early on after his fall, he was in a little different state of mind. And my wife and I had to take my daughter to Alabama to college. And so we hired some people, which really upset him how expensive it was, even though he had plenty of money to do it. And on Saturday afternoon, we were going to be gone all weekend. All of a sudden, we get this call from my dad. I sent them home.

I can't deal with it. And here was this thing that had there been insurance in place, he wouldn't have been sending those people home. It was his money, and he didn't feel like he was getting what he was paying for. Oh, my gosh. We ended up having to rush back and whatever, because it was what happened. Because, again, what you think you're going to do, but when you turn 85 and things start to go wrong, it's a different story.

Right, Tom? Oh, absolutely. And a lot of it, too, is just having to deal with the denial. I mean, there's a huge portion of people that, when they're younger, they say, oh, that won't be a problem.

When I get there, I'll know it, and then I'll just hire someone to do it. It's much harder, once you get into that moment, to be able to accept that, hey, this isn't safe for me to do this anymore. I shouldn't be getting in and out of the shower and risking a fall. And so what happens a lot of times is people, they're in denial. It's like, I can still do this. And part of that is it's hard to let go of something that you could once do and now you can't do. I mean, that is difficult. So putting the plan in place ahead of time to really address that possibility and really likelihood that you'll get there at some point is very helpful in terms of just kind of handing over the reins of, like, okay, I'm here now. Or maybe your loved one can say, you know, I think we're starting to need to kind of implement this plan. And so it's much easier to do it ahead of time as opposed to waiting until after the fact.

All right. And again, you know, why not get some help from people that do these things all the time, right? Because, you know, they see all these things. It's not such thing as a cookie cutter approach for what you may want, your family's needs, all those kind of things.

So easy to get up with them. It's cardinalguide.com, right? And there you can email Hans, get his book, The Complete Cardinal Guide to Planning for a Living or Retirement, or Tom Griffith. You know, Tom is my agent, you know, with all my stuff, as you can tell. You know, help me with my long-term care plan and all that stuff. Because, you know, they know the questions to ask and who to get involved and all those kind of things. It's all there at cardinalguide.com. Well, it's great to have you on the whole show for the first time, Tom.

I loved it. Well, thank you. Finishing Well is a general discussion and education of the issues facing retirees. cardinalguide.com, Cardinal Advisors, and Hans Shile, CFP, sell insurance.

This show does not offer investment products or investment advice. We hope you enjoyed Finishing Well, brought to you by cardinalguide.com. Visit cardinalguide.com for free downloads of this show or previous shows on topics such as Social Security, Medicare, IRAs, long-term care, life insurance, investments and taxes, as well as Hans' bestselling book, The Complete Cardinal Guide to Planning for and Living in Retirement, and the workbook. Once again, for dozens of free resources, past shows, or to get Hans' book, go to cardinalguide.com. If you have a question, comment, or suggestion for future shows, click on the Finishing Well radio show on the website and send us a word. Once again, that's cardinalguide.com, cardinalguide.com. This is the Truth Network.