Even those with health insurance and those with higher incomes are not immune to the high costs of medical care, a survey by health policy research firm KFF found. One third of adults surveyed say they or family members have skipped recommended medical treatment due to cost. One in ten reported debt owed a family member or friend from whom they borrowed to pay off medical or dental bills, KFF reported. With older adults, affording dental, hearing, and vision care, benefits not generally covered by Medicare, is an issue.
Healthcare is obviously an important element in estate planning, and, at Geyer Law, we stress the importance of planning for healthcare needs. Just two years ago (July 2021), the State of Indiana broadened the choices for making health care wishes known, creating a single document called an Advance Directive for Health Care Decisions. In this document, individuals:
- appoint a health care representative to consult with providers, making health care decisions on their behalf
- state their wishes concerning end-of-life treatment (life-prolonging procedures/resuscitation, palliative treatment/ nutrition/hydration)
- state their wishes for post death (burial/cremation, anatomical gifts)
But even the most careful defining of wishes and the most careful choice of decision-makers does not solve the problem of costs. At Geyer Law, we often find parents and grandparents wanting to pay medical expenses on behalf of a family member. Federal regulations, we explain, allow unlimited gifts of this kind without concern for gift and estate tax. In fact, medical expenses paid for a spouse or dependent can serve as an income tax deduction..
Looking ahead to the high cost of their own future medical needs, our Geyer Law clients often discuss downsizing their own assets in order to qualify for Medicaid benefits later on. As elder law attorneys, though, we must remind them that a) outright gifting means giving away all control over the property and b) gifts exceeding certain amounts can result in one’s being later ineligible to receive Medicaid benefits. In short, we caution our clients – Medicaid planning is no do-it-yourself project!
Healthcare planning has always played a key role in retirement planning. According to the Fidelity Retiree Health Care Cost Estimate, an average retired couple age 65 in 2023 may need to have saved $315,000 for their future health care needs.
At Geyer Law, we know – healthcare will continue to be a crucial component of every estate plan.
– by Cara M. Chittenden, Attorney with Rebecca W. Geyer & Associates