November brings National Long-Term Care Awareness Month, a designation that exists precisely because so many people delay thinking about long-term care until a health crisis removes the options that advance planning would have made available. This issue focuses on the planning and legal tools that matter most when health begins to decline, along with updates on a few areas that affect families with special needs considerations.
The elder law and special needs planning team at Mandelbaum Barrett PC prepared this newsletter to keep clients and families informed about developments in elder law and special needs planning.
Long-Term Care Planning: Why November Is a Good Time to Start
Roughly 70 percent of people who reach age 65 will need some form of long-term care during their lifetimes, according to the Administration for Community Living. Yet most families do not have a plan in place. The most common reason is not indifference but postponement: it is easy to defer this concern until later, and later has a way of arriving before a plan is ready.
Long-term care planning has two distinct components. The financial piece addresses how care will be paid for, whether through long-term care insurance, Medicaid planning, family resources, or some combination. The legal piece addresses who will have authority to make decisions on your behalf when you cannot make them yourself, which requires powers of attorney, healthcare proxies, and advance directives executed while you still have the legal capacity to sign them. Both components require time to implement well, and both become significantly more constrained when planning begins at the point of a crisis.
Dementia, Capacity, and Proactive Legal Planning
November is also Alzheimer’s Awareness Month. Alzheimer’s disease and other forms of dementia create a specific planning urgency: once cognitive decline progresses to the point where a person lacks legal capacity, they can no longer execute valid estate planning documents. Powers of attorney and healthcare proxies signed at that point are subject to challenge. Families who wait for a dementia diagnosis before putting documents in place may find that the window for doing so has already closed.
For families who have an older parent or family member who has not yet executed advance planning documents, the time to address this is before there is any question about capacity. Even when cognitive decline has begun but not yet reached the point of legal incapacity, having planning conversations early and documenting the process carefully is important for the document’s defensibility later. An elder law attorney can assess the situation and guide families through the process with appropriate care.
Special Needs Planning Update: ABLE Account Contributions
ABLE accounts allow individuals with disabilities to save money in a tax-advantaged account without affecting eligibility for Supplemental Security Income and Medicaid. Annual contribution limits for ABLE accounts are tied to the federal gift tax exclusion, which is adjusted periodically for inflation. Families coordinating ABLE accounts with special needs trusts should verify the current contribution limits and ensure their planning reflects the most current figures.
According to the ABLE National Resource Center, ABLE accounts allow working individuals to contribute additional amounts beyond the base annual limit under the ABLE to Work provisions of the Tax Cuts and Jobs Act. These provisions allow qualifying employed beneficiaries to contribute an additional amount up to the federal poverty line in their state. Confirming eligibility for these expanded contributions can meaningfully increase the savings available to a beneficiary over time.
Contact Mandelbaum Barrett PC
National Long-Term Care Awareness Month and Alzheimer’s Awareness Month are useful prompts to take action on planning that may have been deferred. The elder law and special needs planning team at Mandelbaum Barrett PC works with individuals and families throughout New Jersey and New York on long-term care planning, Medicaid planning, advance directives, and special needs trust arrangements.
To speak with a member of our team, contact Mandelbaum Barrett PC today. Our team is ready to help.