Amy & Dan Smith's Planning for Life: Planning for the Unexpected

Life-changing medical events of the past week have reminded me to not only review my plans but perhaps serve as a messenger for a "call to action" to any of you who think financial and estate planning is for the well-heeled or something you cannot afford or don't need.

The situation happened quickly.  I had visited my parents last month and, while chronic issues were evident, crisis did not seem imminent.  Then one of my elderly parents began falling at home repeatedly.  My other parent, also physically impaired, did not register the gravity of this matter and did nothing.  My sister, arriving a few days later, immediately called 911, taking my parent to the hospital emergency room.

I won't go into the details of what transpired the next four days but suffice to say it was quite intense.  Our large family was split as to what action to take while our other parent accused some of us as "over-reacting."  The doctor made it clear to us that my parent would not be released from the hospital until a plan was in place at home for 24/7 nursing care.  Two of the first questions were "how much will it cost" and "how will we pay for it?"  Even for someone with adequate financial resources, it can be quite sobering to calculate what the cost of 24/7 home care might add up to over the course of a year and the impact it can potentially have on retirement savings and the amount left for heirs.

For example, while Medicare may pay up to the first 20 days of qualified, skilled nursing care after a hospital stay, thereafter it could be as much as $20 per hour.  Multiply this by 168 hours per week ($3,360) times 52 weeks and the total could come to as much as $174,720 per year.  Unfortunately, my parents had refused long-term care insurance years before, thinking they would never need it.  What to do?

First, my parent told the doctor that family members would provide this care at home.  I loved what the doctor said about family members taking care of critically ill parents:  It's the family's job to love the patient, not provide nursing care, unless they are professionally trained.  After spending 14 hours a day for 4 consecutive days in the hospital, I had a better understanding and appreciation of the professional nursing skills and sheer physicality required to feed, toilet, transport and bathe my parent (who was essentially dead weight) without causing further injury.

We kids thought the ultimate medical decision rested in the hands of my brother, who had been named power of attorney.  This was incorrect.  We had to find out who held my parent's medical directives and decision-making powers restricted to health-related matters.  (See complete "Health Care Decision Making" article previously posted.)  After lots of confusion, tears and prayer, my parent was allowed to return home the last day of my stay and is now experiencing a "new normal" in light of these events.  I hope my story will help some of you review your plans for when the unexpected occurs and consider the following action items if not in place:

  • Ask a legal professional in your state of residence to execute a written medical directive, selecting an agent (usually a family member) to execute your wishes.
  • If your agent is not capable to make appropriate medical decisions when needed, provide appropriate language in your documents to remove agent, specify under circumstances agent can be removed, and then provide the name of a successor.
  • Discuss your wishes with loved ones preferably before a crisis occurs.
  • Consider setting aside separate funds for health-care needs or invest in long-term care insurance. 

From "Amy and Dan Smith's Planning for Life" column appearing monthly in the Blue Ridge Leader, Loudoun County, VA.

The foregoing article contains general legal information only and is not intended to convey legal advice.  For legal advice regarding estate planning, the reader should contact his/her lawyer.

Daniel D. Smith is a partner in the law firm of Smith & Pugh, PLC, 161 Fort Evans Road, NE, Suite 345, Leesburg, VA 20176. (Tel: 703-777-6084, www.smithpugh.com).

Amy V. Smith Wealth Management, LLC is an independent firm.  Amy V. Smith, CFP, CIMA offers securities through Raymond James Financial Services, Inc., member FINRA/SIPC.  Her office is located at 161 Fort Evans Road, NE, Suite 345, Leesburg, VA 20176.  (Tel: 703-669-5022, www.amysmithwealthmanagement.com). Any opinions are those of Amy and Dan Smith and not necessarily those of Raymond James.  Raymond James does not guarantee that the foregoing material is accurate or complete and does not provide legal advice.  Dan Smith is not affiliated with Raymond James.