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Helping Families Navigate the Financial Challenges of Age Transitions

Category: Long Term Care (Page 1 of 2)

Exploring Accessory Dwelling Units (ADUs): A Viable Housing Solution for Seniors

March 25, 2024 /

As the baby boomer generation continues to age, the demand for suitable housing options for seniors is on the rise. With an increasing number of seniors needing long-term care and assistance, the strain on traditional housing solutions such as senior living communities, continual care retirement communities (CCRs), assisted living facilities, and nursing homes is becoming more apparent. However, amidst this growing demand and shortage of appropriate housing, Accessory Dwelling Units (ADUs) emerge as a promising alternative that offers numerous advantages for seniors and their families.

The Demographic Realities: Baby Boomers and Long-Term Care

The baby boomer generation, born between 1946 and 1964, comprises a significant portion of the population in many countries. As this generation ages, the need for long-term care and housing solutions tailored to their needs is becoming increasingly urgent. According to demographic projections, the number of individuals aged 65 and older is expected to substantially increase over the coming decades, putting significant pressure on the long-term care industry.

Supply-Demand Mismatch in the Long-Term Care Industry

One of the critical challenges facing the long-term care industry is the growing gap between the demand for caregivers and the available supply of workers. As the aging population swells, the need for trained professionals to provide care and support to seniors also rises. However, the supply of qualified caregivers is struggling to keep pace with this demand, leading to concerns about the quality and availability of care for seniors. 

In a little over a decade—by 2030—there is projected to be a national shortage of 3.8 million unpaid family caregivers and 151,000 paid care workers. By 2040, the shortfall is expected to grow to 11 million family caregivers and 355,000 paid workers.

National Academy of Social Insurance

Shortage of Housing Options

In addition to the labor shortage in the long-term care industry, there is also a shortage of suitable housing options for seniors. Traditional senior living facilities often have lengthy waiting lists, and the cost of admission can be prohibitive for many families. This shortage of housing exacerbates the challenges faced by seniors and their families in finding appropriate accommodations that meet their needs for safety, accessibility, and affordability.

The Rise of Accessory Dwelling Units (ADUs)

In this landscape of increasing demand and limited supply, Accessory Dwelling Units (ADUs) present a compelling solution for seniors seeking alternative housing options. ADUs, also known as granny flats, in-law suites, or secondary dwelling units, are self-contained living spaces that are either attached to or located on the same property as the primary residence. These units offer several advantages for seniors and their families:

  1. Multigenerational Living: Adult children can build ADUs on their residential lots to provide housing for their aging parents. This arrangement allows seniors to maintain close familial ties while still enjoying a sense of independence and privacy.
  2. Age in Place: Seniors can construct ADUs on their own properties, allowing them to age in place while receiving support from family members or paid caregivers. ADUs can be customized to accommodate the specific needs of seniors, including features such as grab bars, wheelchair ramps, and widened doorways for accessibility.
  3. Affordability: Compared to traditional senior living communities or assisted living facilities, ADUs can be a more affordable housing option. They typically require less upfront investment and offer the potential for rental income if not occupied by family members, making them financially feasible for many seniors and their families.
  4.  Flexibility: ADUs are versatile living spaces that can serve multiple purposes over time. As seniors’ needs change, ADUs can be repurposed to accommodate caregivers, visiting family members, or even rented out to generate additional income.

ADUs Have Been Promoted by the US Dept. of Housing and Urban Development (HUD)

In June of 2008 during the midst of the housing crisis, the U.S. Department of Housing and Urban Development Office of Policy Development and Research published a research paper promoting ADUs as a solution to elder housing and to housing affordability in general. The research included case studies from several suburban cities that have included favorable ordinances supporting the use of ADUs while maintaining the integrity of the neighborhoods within the community.  The research concludes, stating:

Communities find that allowing accessory dwelling units is advantageous in many ways. In addition to providing practical housing options for the elderly, disabled, empty nesters, and young workers, ADUs can provide additional rental income for homeowners. ADUs are smaller in size, do not require the extra expense of purchasing land, can be developed by converting existing structures, and do not require additional infrastructure. They are an inexpensive way for municipalities to increase their housing supply, while also increasing their property tax base. By providing affordable housing options for low- and moderate-income residents, communities can retain population groups that might otherwise be priced out of the housing market.

US Dept of Housing and Urban Development

Conclusion

In light of the demographic realities of an aging population, the supply-demand mismatch in the long-term care industry, and the shortage of suitable housing options for seniors, Accessory Dwelling Units (ADUs) emerge as a viable solution that addresses these challenges. By providing affordable, flexible, and age-in-place housing options, ADUs offer seniors the opportunity to maintain independence, receive necessary care and support, and remain connected to their families and communities. As policymakers, urban planners, and families grapple with the complexities of aging demographics, ADUs represent a promising pathway towards meeting the evolving needs of seniors in the 21st century.

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How to Have Difficult Conversations About Senior Living Options

July 21, 2023 /

As our parents age, there may come a time when we need to have challenging conversations about their future living arrangements. The topic of senior living options can be sensitive and emotional, but it’s essential to address it with empathy, understanding, and respect. In this guide, we’ll provide insights and strategies on how to approach these conversations effectively, ensuring that your loved ones’ wishes and needs are considered.

1. Choose the Right Time and Place: Initiating a conversation about senior living options requires careful consideration of timing and environment. Choose a comfortable and private setting, and make sure there are no distractions. Avoid discussing this topic during busy family gatherings or when emotions are running high. Opt for a time when everyone is relaxed and open to discussing the matter calmly.

2. Listen with Empathy: Approaching the conversation with empathy and active listening is crucial. Your parents may have a range of emotions and concerns about the idea of transitioning to senior living. Take the time to listen to their thoughts, fears, and desires. Acknowledge their feelings and validate their experiences to create a supportive atmosphere where they feel heard and understood.

3. Focus on Their Needs and Preferences: Every individual has unique needs and preferences when it comes to senior living arrangements. Some may prefer to stay in their homes with in-home care, while others might feel more comfortable in a retirement community or assisted living facility. Respect their autonomy and choices, and involve them in the decision-making process. Be open to exploring different options together, considering factors like proximity to family, medical care, and social activities.

4. Address Safety and Care Concerns: Safety and care are paramount considerations when discussing senior living options. Express your concern for their well-being and highlight how certain living arrangements can enhance their safety and provide access to essential support services. Share information about the benefits of professional caregivers and the sense of community they can experience in senior living communities.

5. Involve Other Family Members: If possible, involve other family members in the conversation to show a united front and demonstrate a shared commitment to your parents’ best interests. Discussing senior living options as a family can provide a broader perspective and may alleviate any feelings of isolation or pressure on your parents.

6. Provide Information and Support: Share educational resources and information about different senior living options to help your parents make informed decisions. Provide brochures, online resources, or arrange visits to local retirement communities or assisted living facilities. Offering emotional support throughout the decision-making process can help alleviate anxiety and stress.

Discussing senior living options with aging parents can be challenging, but it’s essential to approach these conversations with compassion, active listening, and respect for their autonomy. By choosing the right time and place, focusing on their needs and preferences, and involving other family members, we can navigate this sensitive topic together, ensuring our loved ones receive the care and support they deserve in their later years.

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Nursing Home’s Arbitration Agreement Found ‘Unconscionable’

August 19, 2022 /

In 2021, The 8th U.S. Circuit Court of Appeals gave the green light to a federal regulation that allows nursing homes to use arbitration agreements with residents, but prevents them from making the agreements a prerequisite for admission. Several nursing homes had filed a lawsuit against the Centers for Medicare & Medicaid Services (CMS) challenging the new regulation. However, the court upheld the regulation, stating in its opinion that,

“In our view, it is reasonable for CMS to conclude that regulating the use of arbitration agreements in LTC facilities furthers the health, safety, and well-being of residents, particularly during the critical stage when a resident is first admitted to a facility,”

A recent case in Pennsylvania ruled that a nursing home’s arbitration agreement requiring a resident, “Fay V.” to pay half the costs of arbitration was “unconscionable.” Kohlman v. Grane Healthcare Company (Pa. Super 118, J-A25034-21, July 5, 2022). The ruling arose after the estate for Ms. V., who died three months after admission, filed a wrongful death lawsuit against the nursing home and other defendants.

According to the court transcripts, at the time of her admission, Fay V. was 67 years old and was suffering from a number of conditions, including congestive heart failure, diabetes, and pressure ulcers. The nursing home’s assessment of her condition at the time of her admission reported that “she was alert and oriented and had no memory problems or dementia, but that she was also suffering from anxiety and sometimes had trouble concentrating.”

It’s assessment also reported that ‘Fay’s vision was impaired to the point that even with glasses, she was ‘not able to see newspaper headlines but can identify objects.’ Yet upon her admission to Highland Park, she signed a number of documents, including a seven-page Nursing Services Agreement, a two-page Agreement to Arbitrate Disputes (the Arbitration Agreement), and a Resident Representative Agreement concerning the handling of her finances, in which Decedent designated herself as her representative.

In trial court, the court ruled the Arbitration Agreement as unconscionable (excessively unreasonable) because Decedent was in pain and was medicated at the time that she signed the Arbitration Agreement, Decedent was alone when she was asked to sign the Arbitration Agreement, had no opportunity to read the Arbitration Agreement and was not given a copy to review, and the provisions of the Arbitration Agreement were not fully read or explained to Decedent.

Source: Nursing Home’s Arbitration Agreement Found ‘Unconscionable’ — and Unenforceable — in Wrongful Death Suit

Most Have No Plan for Long Term Care

August 15, 2022 /

HGC, an Aging-In-Place research and product development company based in Connecticut partnered with non-profit Arctos Foundation to survey Americans’ preparedness for long term care.

Key findings:

  • 70% of respondents have no advance directive in place, and just one in ten have long-term care insurance.
  • Most respondents have not spoken with a family member or loved one about wishes for Long Term Care.
  • Those with a spouse or partner are more likely to expect a need for long-term care services and supports, but are no more likely to have long-term care insurance in place.

Source: Independent Research | HCG Secure

To help families understand and discuss the issues surrounding planning for long term care, we have two excellent flipbooks on the topic of Essential Estate Planning, and Understanding Long Term Care.

Covid Spurs Families to Shun Nursing Homes, a Shift That Appears Long Lasting – WSJ

January 4, 2021 /

Has COVID affected how you feel about nursing homes? Even if a loved one hasn’t become ill, many families have been unable to even visit their elderly relatives, which was especially difficult over the holiday season. This Wall Street Journal article discusses how COVID is causing many to consider other options.

The pandemic is reshaping the way Americans care for their elderly, leading more families to decide to avoid professionally run facilities as services expand to support in-home care.

Source: Covid Spurs Families to Shun Nursing Homes, a Shift That Appears Long Lasting – WSJ

How Covid-19 Will Change Aging and Retirement – WSJ

December 16, 2020 /

As the pandemic wreaks havoc on our mental and physical health, it is also quietly reshaping how Americans will face retirement and old age in the years to come.The virus is bringing sweeping change, mainly by “accelerating developments already under way,” says physician and entrepreneur Bill Thomas. For example, “isolation of older people has long been a problem, but Covid is focusing attention on the issue and adding urgency” to address it.

In this Wall Street Journal Article, writer Anne Tergesen reports on some of the effects that the COVID virus could have on aging and society. Among her findings:

  1. More will age at home.
  2. Older people will benefit from a technology boom.
  3. Lifespans will decline. (Though perhaps only for the short term)
  4. We will have a better handle on what we want to do with our time.
  5. We will plan for death.
  6. We will embrace healthier lifestyles.
  7. We need to save more to retire.
  8. The 401(k) will morph into a multipurpose account.
  9. We will work longer.
  10. Our views on aging will change.

Source: How Covid-19 Will Change Aging and Retirement – WSJ

Agency Care vs Private Employment

February 6, 2020 /

According to research from the AARP[1], a clear majority of people would like to stay in their own home as they age – even if they require day-to-day assistance with activities of daily living. With a rapidly increasing senior population, demand for quality in-home care is beginning to skyrocket.

Most at home care has traditionally been provided by care agencies that provide basic custodial care to individuals needing assistance with activities of daily living (ADL) or who have cognitive impairment. However, recent regulations are changing the cost structure for home care agencies, especially for certain types of cases where care is needed full-time such as with Alzheimer’s disease and other conditions involving cognitive decline.

It is not unusual for care to be provided 24/7 to people with these conditions and the expenses can quickly become unmanageable, especially due to new regulations that can trigger overtime pay requirements for home care agencies who employ the same caregiver for more than 40 hours a week. At the end of 2015, the Department of Labor (DOL) repealed two Wage & Hour Law exemptions that had been in place since 1974 – the Companion Care exemption and the Live-In exemption. The repeals impacted only third-party employers of direct care workers (i.e. staffing agencies), no longer allowing them to pay workers less than minimum wage and forcing them to adhere to overtime standards.

As a result, many home care agencies now handle high-hour cases differently. They either get the family to accept a rotation of many different caregivers or pay for the associated overtime with a major increase in their hourly rate. In most states, families are exempt from overtime requirements if the caregiver is a live-in employee or qualifies as a companion. This allows care recipients to get the care continuity they need without the additional cost. For 24/7 type care, this overtime exemption can reduce the cost by as much as 50%, or tens of thousands of dollars per year.

Household Employment Basics

Hiring a senior caregiver privately means the worker is now a household employee. And just like any other employment situation, payroll, tax and labor laws must be followed. There are three primary wage reporting responsibilities families have for their caregiver:

  1. Withhold payroll taxes from the caregiver each pay period. Normally, this includes Social Security & Medicare (FICA) taxes, as well as federal and state income taxes. Some states are different and you can consult this state-by-state guide for more information.
  2. Remit household employment taxes. These generally consist of FICA taxes as well as federal and state unemployment insurance taxes. Again, some states have additional taxes, so it’s important to consult the state-by-state guide beforehand.
  3. File federal and state employment tax returns. These are due throughout the year – rather than just at tax time – and go to the IRS and state tax agencies.

In addition, there are several employment law matters that need to be considered at the time of hire. Depending on the state, a family may be responsible for providing things like a written employment agreement/contract, detailed pay stubs, paid time off/paid sick leave, workers’ comp insurance, etc. Be sure to consult with an employment law attorney in your state to learn what your state requires.

Even after adding in payroll taxes, insurance and all other employer-related expenses, the savings can be staggering. The figure below compares the cost of Agency Care vs Private Employment. Hourly agency costs start at $20/hour for less than full time but increase to $22/hour for full-time and $25/hour for high-hour care (80 hours or more per week) due to the pass-through of overtime wage costs.

privately employment vs staffing agency cost comparison[2]

The good news is there are household employment specialists that take full accountability for all or most of the employer responsibilities so families are free of paperwork and risk – enabling them to focus on caring for their loved one. If funds for the care of a loved one are held in a trust, Argent can serve as trustee and handle these requirements as part of its role as trustee.

There is no one size fits all solution to caring for our older adult population. Home care agencies, assisted living facilities, independent living facilities and skilled nursing facilities all have a role to play. And, now with the recent regulatory changes, so does privately-employed in-home care – especially for those patients suffering from cognitive conditions who need many hours of consistent care.

Acknowledgment

Thanks to Tom Breedlove, Director of Care.com HomePay for this information. Tom brings more than 30 years of business experience, including more than a decade as Director at Breedlove & Associates – now known as Care.com HomePay – the nation’s leading household employment specialist. Co-author of The Household Employer’s Financial, Legal & HR Guide, Tom has led the firm’s education and outreach efforts on this complex topic. His work has helped HomePay become the featured expert on dozens of TV and radio shows as well as countless business, consumer and trade publications. Learn more at www.care.com/homepay.

[1] “The United States of Aging Survey” 2012, AARP.

[2] Source: “Cost of Care Survey 2016”

Financial Planning Does Not End at Retirement

January 13, 2020 /

With the new year, I’ve entered my 36th year in the financial services industry. Just writing this fact feels strange. I’ve never characterized myself as a veteran of the industry, feeling instead that I’ve just hit my stride. The years however tell me differently and it’s easy to understand how senior professionals can feel marginalized. I chose a doctor several years my junior so that as I aged, he’d still be in practice. Understandably now, clients want to know who my back up is “just in case.”

The financial planning industry has done an admiral job of preparing people for two pivotal moments: Retirement – that magic age when one stops earning a paycheck, travels the world, plays golf every day, and enjoys a life of leisure; and Death – the final moment beyond which our assets and legacy are left to our heirs. It has done a poor job of equipping advisors to address the financial planning issues of the period in between. Sure, advisors sell long term care insurance to forty and fifty-somethings for this period, and others sell annuities to seniors skittish about the financial markets, but these are product solutions aimed at the senior market, not financial planning discussions. In a similar way, a walker solves an issue with balance and prevents falls, but a walker is not a comprehensive plan for health and wellness throughout life.

While there are several common financial planning issues for every age demographic, there are also many unique financial planning needs of the senior market.

Common Financial Planning Issues

  • Ensuring adequate cash flow throughout life.
  • Evaluating and addressing risks to financial independence.
  • Determining the financial impact of major life events.
  • Minimizing income tax.
  • Allocating investment resources to accomplish current and future goals.
  • Defining a plan for the distribution of accumulated assets at death.

Financial Issues Unique to Seniors

  • Plan for downsizing or home modification
  • Relocation plan if distant from family
  • Plan for continued social engagement
  • Family business succession
  • Identity and fraud protection
  • Annual Medicare elections
  • Developing a dependency plan to include
    • Living arrangements
    • Persons in charge of financial decisions
    • Persons in charge of healthcare decisions
    • Transportation needs

It’s tempting to ask how a plan for continued social engagement is a financial planning issue. With social isolation a major contributor to poor health among seniors[1], and healthcare costs absorbing a significant portion of a senior’s resources, a plan for social engagement as we age should be an integral part of the financial planning conversation with seniors.

Annual Medicare elections are another example of an often-confusing labyrinth of decisions that can have significant financial impact for years.

Identity theft and elder financial fraud are estimated to cost seniors between $3 and $30 Billion a year[2], and nearly everyone I know over age 70 has been targeted. A plan that includes identity theft protection as well as vulnerabilities to undue influence inside of familial relationships needs to be included.

Plans for living arrangements, whether aging in place, or facility care, should be discussed long before the actual need arises. Just as saving for retirement doesn’t begin at age 65, neither should plans for where someone lives out the remainder of their life be delayed until the 11th hour.

Family meetings to discuss an aging client’s dependency plan should be also be held long before a dependency event occurs. It helps assure family members that a plan is in place, informs them as to who-does-what-when, and when done early enough and under the direction of the aging client, preserves his or her seat of honor at the head of the table.

Family Business Succession has been a central component of financial and estate planning for years and is the least neglected area of financial planning for seniors among those who own a multi-generational family enterprise. Still, nearly 60% of the small business owners surveyed by Wilmington Trust, do not have a succession plan in place[3].

In conclusion, financial planning does not end at retirement. As one client reminded me years ago, “retirement is just another word for thirty years of unemployment.” It doesn’t look the same for all seniors but when practiced with integrity, it can be extremely beneficial to the entire family, and rewarding for the financial planner who chooses to serve this market.

[1] National Institute on Aging. (2020). Social isolation, loneliness in older people pose health risks. [online] Available at: https://www.nia.nih.gov/news/social-isolation-loneliness-older-people-pose-health-risks [Accessed 7 Jan. 2020].

[2] Consumer Reports. (2020). Financial Elder Abuse Costs $3 Billion a Year. Or Is It $36 Billion?. [online] Available at: https://www.consumerreports.org/cro/consumer-protection/financial-elder-abuse-costs–3-billion—–or-is-it–30-billion- [Accessed 7 Jan. 2020].

[3] Usatoday.com. (2020). [online] Available at: https://www.usatoday.com/story/money/usaandmain/2018/08/11/most-small-business-owners-lack-succession-plan/37281977/ [Accessed 7 Jan. 2020].

House Calls Provide Better Care and Save Money. Why Don’t More Use Them?

October 1, 2019 /

At least 2 million older adults would benefit from home-based primary care, according to Health Affairs. Because these patients have difficulty getting to an office visit, they frequently end up in emergency rooms or hospitals.

Per-patient savings range from $1,000 to $4,000 annually through reduced hospital and nursing home stays, emergency room trips and specialist visits, according to research cited by the American Academy of Home Care Medicine.

According to the American Academy of Home Care Medicine, the CMS Independence at Home Demonstration, part of the Affordable Care Act, estimated that Medicare would save $10 to $15 billion total over a 10-year period if home-based primary care were extended nationally to those on Medicare who are homebound.

Source: House Calls Provide Better Care and Save Money. Why Don’t More Use Them?

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