Welcome back to the Sandwich Bread Pod. This is part two of my conversation with elder law attorney Maureen Lester. In the first episode, we talked about what elder law is and why it matters. In this episode, we get into what happens when families don't plan early enough, including some of the most common horror stories that Maureen sees in her practice. We also talk about Medicaid, long-term care costs, family dynamics, and the tools that can help families stay aligned when one or two people are doing most of the caregiving.

This conversation is especially relevant if you're supporting aging parents now or expect to in the future. All right, let's jump back in.

So on that note, let's talk horror stories. All right, let's get to it.

Let's run through some scenarios where elder law planning is not engaged. You have an aging parent cognitive decline or some other physical ailment. And they have just a traditional estate plan, which, actually puts them probably in the upper core tile of people who are organized. Maybe not even an estate plan, but we'll give them the benefit of doubt, right? Like a regular estate plan. What would be the possible negative outcomes of

not engaging an elder law attorney as your parent ages and updating their estate plan accordingly? So, great question. You know, as long as they have solid power of attorney

So I still maintain all of my powers to go to the bank, handle financial transactions on my own, but I also carbon copy and give somebody else the authority to do that. So as long as they have those documents and they've signed them and someone else has those powers, we can get a lot done.

Okay. So that's, yes, there are some horror stories there and sometimes where the planning just was too late, but that gives us a big leg up and at least having some options available. What I will see is most likely those powers of attorney documents were done a long time ago. Yeah. And they may have been very well suited for that person when they were in their young adulthood or middle age. And now that they're entering this stage where they've got some health issues going on, that document is no longer as powerful as it needs to be to do all the things they need to do now. So there's a couple things there. A lot of times in our younger age, we want something called a springing power of attorney. So what that means is it only springs into effectiveness when I lose the cognitive ability to handle finances on my own. So while I can do my business, I do it. And only when I can't, that's when the other person comes into play and they take over for me.

And that's great when we're young, but if there is the cognitive decline, it's not certain on various days or even various hours of the day whether I have the ability to do those or not. And my thing to my clients is always, if you trust that person to handle your money when you have no idea what's going on because of your cognitive decline, I sure hope you trust them enough when you do have your wits about you and can kind of check their work. So that usually gets people to go, yeah, okay, I see why we might want something where I don't have to wait until I'm completely incapacitated for this person to take over. They're going to help me with some of my day-to-day bill pay. I want them to have the ability to talk to the bank and help me gather information and so on and so forth. So, you know, hopefully ... in that kind of crisis mode, have the ability to update that document. That's one of the really important things that I do is I have a conversation with my client before they sign any kind of legal document. And it's in the moment where they're about to sign because I've got to make sure they understand exactly what they're signing, exactly the power that they're giving to somebody and that that person is well suited for that job. So that means that it's a valid document at that point. If they don't know what they're doing, then it's not a valid document. And that can lead to some really dangerous outcomes. And frankly, that's what a lot of the litigation is about in our field. So, you know, I think that is another piece that to a certain degree differentiates an elder law attorney is that I have a ton of experience and training in various levels of cognitive capacity because I see it with different kinds of dementia and Alzheimer's. At the end of the day, if that document is ever challenged in court, the attorney puts me on the stand to say.

Did they know what they were signing? And so it's up to me to tell how they knew what they were signing and why they did know that it was valid. Yeah. so what I'm hearing is, somebody has an estate plan in place, but it doesn't take into consideration the elder law piece, there's sort of a crisis management process where it's like, all right, if we've got their correct power of attorneys in place.

We'll just utilize those, we'll activate them in effect and update the plan with all these other components. Yeah, exactly. And so, you know, to kind of go back to your original question about horror stories and when is it too late. And as long as there is a power of attorney, there's most likely some things that can be done. I think the toughest part is when there is no power of attorney document at all and now the health event is so dramatic that there's no longer the mental capacity to sign a new document. So that requires going to court to get a guardianship and conservatorship. And that means that all the money is overseen by a court and it's really, really hard to do any kind of planning at that point. At that point, the court is essentially approving money to be spent on the person with the health needs. But the money's basically spent on them and their needs. And then hopefully there's some kind of instruction about where that money goes upon their death that can be followed. But that's a horror story because The family is powerless to some extent. We're not powerless, but you know, there's a third party involved that they have to kind of run every consideration through. And then the parents wishes have completely been, you know, that they're not part of the plan. You know, you just hope for the best. it's essentially up to a court and a judge at that point. And that's not what most people want. Yeah. And it doesn't seem efficient either. Like it seems like it adds layers and slowness to the process.

executing the plan on behalf of the parent. Yeah, and it's costly too. Yeah. Almost always having a clear and updated plan saves money in the long term. Yes, absolutely. Yeah, you look at probate costs, then you kind of outline the possible costs and, public record and those types of things. And I'm like, please just pay a couple thousand bucks and get, get your wishes in writing and then we'll update them over time, you know, so. Yeah.

Alright, so we talked about horror stories. That was great. Let's bring the crowd back up. They're in the gutter now. Let's rise them back up. Let's talk success stories.

In your field, sure you've seen, I've personally seen with a few of my clients, really exciting and happy outcomes from estate planning. I know that sounds really nerdy, but when the family is like one cohesive unit and they're all like marching in a line together and like looking out for each other first, it's really cool.

But tell me, know, share with me if you could some success stories like some happy outcomes or positives of engaging with an elder law attorney or just general estate planning. Yeah. So hopefully you have the same experience. I've seen that when the plan is very clear and the communication essentially has to come from the top up, right? The parent with the money who's going to give it away, it's their choice what to do with it. And so when they can make that choice and they make it super clear. And especially then when they present it in a way where everybody either understands or gets on board, right? Because the kids don't have to agree with that decision. That's not what I'm trying to say. But they have to understand that it's the parent's choice and that's their decision. And then when that is clearly stated, whether the kids learn about it during their parents lifetime or whether they learn about it after death, when it's clear, that tends to lead to family harmony. And I think that should be one of the biggest motivating factors for anybody to create an estate plan is that if you really want to give a gift to the next generation, making it clear so that they're not fighting over, you know, what was said versus what was said a different day, putting it down in writing really does create then the family harmony because that's the decision, that's the choice and it's clearly stated. mom's ruby ring goes to Tom, okay, that's how it's gonna go, there's no fighting over the ruby ring. You've probably also seen when things get tough after people pass.

It's very emotional and obviously, having a clear estate plan takes at least that burden of like, there's a lot of psychological weight to that transition and it reduces that level of stress when there's so many other things you're stressed out about, in the event of a passing. yeah. Well, let's even back up, you know, that maybe the few years before that person passes away, sometimes there's one or two, but not all of the children who step up and put in a lot of their own time and effort into helping mom and dad in that kind of last chapter of life. And so sometimes then they have certain feelings about that. And if their siblings didn't contribute as much, you know, they think maybe they deserve to be treated differently than siblings who didn't contribute.

yeah, let's dive into that. Cause I know for a fact that's coming up a lot, right? If you have siblings and an aging parent equitably accounting for the work that's going into supporting that parent, maybe some families don't care, they just want the best situation for the parents and one person's like, I will do most of the work and that's fine. I need nothing in return. I'm caring for my parent. But you can't help but think if there's multiple kids in a family, there's going to be friction. It's almost unavoidable. So how does, how does proactive planning help in that situation? Yeah. Or how could you proactively plan? First of all,

First of all, it opens the door to the conversation. And if families are working really well together or at least willing to be honest with one another, then hopefully the kids who are putting in a lot of effort are willing to raise their hand and say truthfully that either they feel like they deserve more because they're doing more or truthfully that they don't want more, that they recognize that this is just part of their job description as a kid and they're happy to do it. So that conversation is important. And then they're making the tools to reflect reality is the next step. So one of the things that I do for a lot of families is I create something called care contracts, where we list out all the different things that that child might be doing for their aging parent. And then we put a dollar amount to it, right?

set dollar amount per hour. And so whenever that child is doing those job duties for the aging parent, they log their time, right? and then they essentially get paid for that work. So that helps during lifetime to equalize the work that's being done. They're being paid in real time for the real work that they're doing.

Yeah, and then after death it can still be an equal distribution and everybody is happy. Yeah So that's a really good tool now. So do you sit in on those meetings and say It's actually the market rate is $22 an hour for that activity do you sit in there and like help the family almost mediate? Kids are present parents are present. They talk through responsibilities. You'll kind of say this is what I see Yeah, most of the time though

I just recognize through the conversation that there is assistance happening. So in that case, I try to create a really broad document because we don't know where that assistance is going to go over time. So we try to account for a lot of things that they're going to be doing or might need to do that they might need to bill for. And then it's really up to their timekeeping to get paid accurately for that work. And yes, we do essentially assign a market rate to their time for what they're doing.

And the reason that we do that and why it's so good to do that in advance. Yeah. Because if somebody requires Medicaid to help cover their long-term care costs in the future, because long-term care is so expensive. Correct. At the highest level of care in the Kansas City area, we're looking at, at a minimum $8,000 a month. Yeah. And that's average. You can go up from there. Yeah, I build financial plans and then I plug in long-term care and we have this beautiful plan where they accumulate millions of dollars and then you just give it all to a long-term care facility at the end of the plan without careful planning,

in one scenario you leave $5 million to your kids and in another scenario you leave $500,000 to your kids. Right, big difference. It's so expensive and so a lot of people essentially disaster plan, right? Yeah. Because there are a couple of different ways to pay for that long-term care and one of those is Medicaid. And so, in certain circumstances, it makes sense to plan for Medicaid to make that nursing home payment.

So the reason that care contracts are so helpful when you're planning on Medicaid, paying for the long-term care costs or at least some of the long-term care costs is that there are financial eligibility standards that you have to meet in order to be eligible for Medicaid. And as you can imagine, the standard is very low, right? It's a government program to help the most needy. So you have to be financially needy. And so if you're paying for legitimate care that you're receiving during your lifetime, it just happens to be to your family member instead of to a care agency. So it's going to be more affordable. It's going to be someone you trust. It's going to be someone reliable, but it's paying for the same thing.

Yes, might your family member be willing to do it for free? Sure, they'd be willing to do it for free. But a lot of times, not only are they better at the job because they actually care, but it's also a way to essentially transfer wealth from one generation to the next generation and doing so legally.

responsibly. And then if that parent does need care in the future, it's actually easier to get Medicaid to pay for it because they have less money. They're closer to meeting those eligibility standards. Yeah, it makes a lot of sense. And it's a win-win, right? Like, parents would prefer to be cared for by their children. Children would prefer to be the one caring for their parents in most cases. So it makes perfect sense and it makes financial sense as well, obviously.

So what else from the standpoint of like proactive planning, let's go back to the scenario, because I know this is on people's minds. have multiple siblings and you're trying to work through proactively addressing the potential of family friction as your parents age. love the care contract concept. You what else have you seen successfully done to mitigate family drama and family friction? Yeah. So one thing is hopefully a willingness or an acceptance from the parent to receive help. And to really make it super clear to everybody about who makes what type of decisions. So early in my career, I would allow my clients to name two, sometimes even three of their children to be co-agents as attorney in fact. I no longer do that because Again, think clarity is key here. And if there's three out of three children have the authority to make a decision in a lot of different aspects, they're probably going to have different ideas about how to get it done. so having only one decision maker at a time tends to provide that clarity. And again, if the parent then is really clear about This child lives in town, so they're going to be really well suited to make my healthcare decisions. And this child, while they may live out of town, they're going to be the best at making the financial decisions. And, you know, with technology these days, and especially with our generation becoming powers of attorney, we are no strangers to using technology and handling financial transactions from afar. you know, having people in town to handle that role.

I think is no longer a priority So, just really thinking through who's good at doing what and then being really clear. And to the extent that the parent stays involved and their independence and their skills and experience and guidance are still honored, that goes a long way too, towards that family harmony.

Instead of you know, it's not always just an on-off switch a lot of times there's a gradual change in the things that the aging parent needs help with and how to approach that and You know, I think there's room to for counseling within family units to a certain degree to kind of navigate because One thing that I don't think people realize is the shift that happens when a parent starts to have health issues and starts that decline. Not whether they're cognitive issues or physical issues, but when the parent, when the child takes on a caregiving role for their parent for the first time, that shift can be very jarring for the family unit. And so to do that carefully and potentially with guidance from a professional to help guide.

Just the relationship piece, I think, can be very helpful. Yeah, yeah. I haven't experienced it personally, taking on the caregiver role, but with the elder specialist designation I just went through, the whole process I went through is essentially helping your client, who might be the caregiver, arm themselves with the right tools and resources to get through it. It became quite clear, like, when you layer up all the responsibilities that person has to take on.

and then they've got a mortgage and then they've got their own professional career in some cases like a lot of these families have two working parents Then you bring an aging parent into the home or grandparent into the home Then you've got a safer college and it just boom boom boom boom and it piles on the burnout the psychological wear down of the the caregiver is a huge thing to acknowledge and be cognizant of yeah

And we haven't even really considered the role of the spouse. You might have one aging parent who's declining, but the other aging parent is the primary caregiver. And recognizing the work and the burnout there, I think is also huge. But you bring up a good point about having... so many things happening at once with having, you know, and that's what the sandwich generation is, right? You've got young kids that you're responsible for. Trademarked. No. Older adults that you're responsible for. Yeah. And one thing that you probably learned a lot about when you were getting that education about this whole spectrum is that our generation also isn't afraid to outsource. And I'm seeing more and more professionals.

help with that outsourcing of a lot of these different ⁓ jobs that ordinarily, you the kid would take on.

Having a basic understanding of what does home care look like and what does it cost? What does assisted living actually look like and what does it cost?

All right. So wrapping up, I was kind of want to leave these conversations with something simple and actionable because what I've learned as a financial planner is that you give people like five things to do. They won't do anything, but if you give them one thing, there's a good shot.

You at least have a hope that they'll get something done. So say you are somebody that has concerns about their parents estate plan either not being created or maybe it's time we need to think about engaging an elder law attorney because certain things, certain red flags have gone off. what would you recommend as a way to begin?

One of the first things I would do is make sure there's a comfortable space or a comfortable way to start talking about this conversation. if you're just breaching that subject, coming at it from the perspective of I want to support your wishes. so mom or dad, now that you just turned 65 and you're on Medicare, it's made me realize that I don't know what you want when you're 75. I don't know what you want when you're 85. What does this look like for you at those ages? And I want to support you in those goals. I think just starting that conversation from coming from curiosity to figure out.

how maybe to navigate it going forward. And I've actually recently experienced this with my own parents, not because I see decline in them, but I think turning 65 and getting on Medicare in the last couple years has really made them realize like, okay, we're at this latter half of life at minimum. And so it's time that our kids know about our plans and know about some of these things. And it was just really simple as, to letting me know where the binder is. And at this point, they don't need my help. So that's all I need to know is that they have a plan and where it's located if I needed it in an emergency. And so I think just understanding have you done the plan and has it been done professionally? Because I've also seen some DIY plans that are really not good.

But just really understanding is there a plan and where is it and if there isn't one can I help you with that first step in making one? Yeah.

and then you can tell your parents, I know I'm great lawyer, right? Be the easiest close of your career, right? That's right.

up big takeaways. you helped us Understand the differences between elder law and regular estate planning Case studies we talked through some happy scenarios some rough scenarios Reasons to avoid it at what are some baby steps you can take to kind of get us going on the journey, so This has been awesome. 

Thanks for having me. 

Thanks

As we wrap up, one of the biggest takeaways from this conversation is that elder law planning isn't just about documents or money. It's about clarity, communication, and reducing stress for everyone involved. When families plan early, update their documents, and talk openly about their roles and expectations, the outcomes are almost always better. If this episode prompted questions about your own family's situation, that's a good sign.

These are conversations that are often uncomfortable, but they're far easier to have before a crisis than after. Thanks so much for listening to the Sandwich Bread Podcast.