Your Legacy: Money, Mementos and Memories

By Peggy McGillin, CFP®

How do you want your children to remember you?

There’s a loaded question for you. I’m moved to ask it because of all the stories I keep hearing. They’re sad because the outcomes could have been so different. Here is one particular story that I’ve heard over and over again with slight variations.

The patriarch of a strong and proud family dies. This man was an accomplished and respected member of the community who held high standards for himself and his family. His children were loved and well provided for, and although (or perhaps because) he was known for being a strict son of a gun, they’re all productive adults.

Whether widowed or divorced, at some point the patriarch remarried. And, whether due to negligence, ignorance, bad advice, apathy, conniving, or spite, the new wife has now inherited everything. It’s her prerogative to pass along the “family treasures” as she sees fit: the silver from Mother’s side of the family, that signed baseball, Father’s flight jacket, those coveted season tickets, and, of course, all the money. To add insult to injury, she has her own kids from a previous marriage. So now, her children are summering at the cottage where the patriarch’s kids spent every summer of their lives until now.

This is not a story about evil stepmothers. This is about parents who just didn’t think it through or get it done. Perhaps, in some cases, this is indeed what Dad or Gramps truly wanted. More likely, he just ran out of steam along the way and couldn’t muster the motivation to attend to an estate plan.

Everyone knows that nature abhors a vacuum, and when the human mind doesn’t know the reasons for something, it tends to write a narrative to make sense of the situation. So carefully study the following words:
• Negligence
• Ignorance
• Bad Advice
• Apathy
• Conniving
• Spite
This is not a flattering list. I’ve been told by Howard McGillin, a family member who is an estate planning attorney in St. Augustine, Florida, that the number one reason people call to make an appointment with him is because the new client just attended the funeral of a friend or sibling who everyone agrees was far too young to die. It’s the stark reality about mortality that gets you thinking about how precarious your plans are.

No matter what ultimately motivates you, ask yourself, don’t you want to be the one who is calling the shots? Don’t you want to have a hand in how you’ll be remembered by those you brought into your world?

And, one more minor consideration: if you don’t attend to this, your estate will go through probate, which means it is public information. If you value your privacy and the privacy of your survivors, you will schedule this “someday” item on your to-do list: find an estate planning attorney before the end of next week.

I could shower you with all the benefits in doing so and the risks in not doing so. However, like your average teen, you’d probably tune me out even if it meant that you’d be giving up the most generous gifting opportunities in years, just as you’re not likely to dwell on updating your homestead protection due to recent changes, and these are mere details.

But, what I hope truly motivates you to get this done before it is too late is the thought of how you’ll be remembered by your children for the rest of their lives. It’s not very difficult or expensive to address these issues. You’ll need a will, a living trust, a health care proxy, a durable power of attorney, and most likely a trust; in addition, you will need to have your assets titled properly and make sure your beneficiary statements are updated to reflect your plan.

If I’ve helped to open your eyes, please let me know. I’d like to be remembered as the one who was looking out for you and your family. If you care at all about your legacy, get to it.

Peggy is the owner of Journey Financial Planners. To read her monthly blog, click here.

How Much Money Should You Spend on Long-Term Care Insurance?

Two weeks ago Tobe Gerard shared her expertise on long-term care insurance. You may read her post by clicking here. One reader, Beth, posed an interesting follow-up question, reprinted below with Tobe’s response.

Beth: Tobe, thank you for a very informative article. Regarding your rule of thumb “that you should be able to comfortably fit this item into your budget,” can you elaborate why? I know several people who are making budgetary sacrifices to pay for a robust long-term care insurance policy that will enable them to receive high quality care that they can select when the time comes.

Tobe: The main concern for anyone who purchases a policy that takes up an inappropriate portion of his/her budget is that if financial challenges are encountered down the road, he/she might be forced to let the policy lapse; as a result, the advantage of having purchased the coverage in the first place would be lost.

Insurance companies suggest that you don’t spend more than 6-7% of your net income on long-term care insurance. Additionally, I believe that not only should you not spend more than 6-7% of your income on long-term care insurance while you are working, but, more importantly, long-term care insurance shouldn’t be projected to be more than 6-7% of your overall expenses in retirement. Obviously, because of unique situations, this rule of thumb may not apply. In most of these unique situations, a policyholder’s long-term care insurance policy is being paid for by someone else (e.g., a trust fund, employer, etc.).

As far as the purchase of a “robust policy,” it’s important to say that all of us have very different financial profiles when it comes to our assets and income. Some people prefer to self-insure more of the cost of long-term care because they have significant assets and income, and they wouldn’t mind using some of these if/when the time comes. These are the people who usually have high deductibles on their other insurance policies (e.g., automobile and homeowner). Because some people don’t have significant assets and income, they may feel that even a rudimentary policy will provide a buffer before they would need to tap into their retirement portfolio. Additionally, some people are quite affluent and just want the best policy that money can buy, and they don’t worry about the cost whatsoever.

Oftentimes, we find that people who put other things aside to purchase a “robust policy” have particular reasons for doing so. Perhaps they have witnessed firsthand a long-term care claim where there was no long-term care insurance in place and they have seen how it has devastated their family, both emotionally and financially. Furthermore, some may choose to put other things aside to purchase a “robust policy” if they fear they may potentially have some kind of cognitive impairment in the future.

I hope this answers the question. If you have any additional questions about long-term care insurance, please post them here.

©2011 Circle of Life Partners™

Do You Need Long-Term Care Insurance?

by Tobe Gerard

I work with people to help them decide if long-term care insurance is right for them. I do this by focusing our conversation in three distinct areas, which then allows me to suggest a course of action.

People have different reasons for considering long-term care insurance. For some, it’s the recommendation of their financial adviser or attorney. For others, it’s because they have been the caregiver for an aging parent or a terminally ill spouse.

Every person has a different financial profile. For those on a tight budget, a bare-bones policy may be suitable. For others who are affluent, a generous policy with lots of bells and whistles may be appropriate.

In addition, it is important to take health status into consideration. People in good health will have no trouble securing long-term care insurance while those with health problems may find their options to be limited.

What is long-term care?

Long-term care is the daily care a person requires because of chronic illness or disability. It is an ever-changing array of services aimed at helping people to compensate for limitations in their ability to live independently. It can range from needing assistance with household chores to requiring highly skilled nursing care. It can be delivered in one’s home, in an assisted living facility, in an adult day care center, or in a nursing home.

What is long-term care insurance?

Long-term care insurance is a form of insurance that transfers the risk from you to the insurance company. As with other forms of insurance, a premium is paid. Many levels of care are funded should you become unable to care for yourself.

Is long-term care insurance necessary? Why is it so important?

Consider the following facts:

• Currently, the cost of nursing home care in New England can be upwards of $300/day.
• Medicare does not pay for long-term care.
• People are living longer today than at any other time in our history. The fastest growing segment of our population is over age 65.
• Many women, once the primary caregivers to family members, are now in the work force because families depend upon two incomes.
• Seventy-six million baby boomers are aging fast.

Is long-term care insurance right for everyone?

Not everyone is a good candidate for long-term care insurance. If you have limited assets, Medicaid and community-based programs may be better suited to meet your needs. On the other hand, if you have assets to protect, long-term care insurance is probably the best option for you to pursue. My rule of thumb is that you should be able to comfortably fit this item into your budget. However, if purchasing long-term care insurance is going to impact your lifestyle (e.g., take away your only vacation for the year), this purchase may not be right for you.

Long-term care insurance can keep many families from being financially devastated if confronted by a long-term illness that requires assistance with daily care. Long-term care insurance allows you freedom of choice so that you will not have to rely upon the government for help with long-term care. Long-term care insurance is a sensible and cost-effective way for many people to protect themselves so that they can remain independent and not feel like a burden to their family members. Long-term care insurance is one of the most nurturing gifts that parents can give to each other while also sharing a loving gift with their children.

At what age should I purchase long-term care insurance?

The majority of people who purchase long-term care insurance are between the ages of 55 and 64, although the premiums are less expensive for younger people in good health status. Oftentimes, people in their 40’s are motivated to purchase long-term care insurance if they have a parent who has had a diagnosis of cognitive impairment.

Do you have questions about long-term care insurance? If so, post them here, and I will provide you with answers.

©Circle of Life Partners™

In the Sandwich? Seven Favorite Sources of Information

by Jan Simpson

To keep informed, I read, tweet, meet experts, attend conferences, and talk with people who provide medical, legal, financial, housing, and home care services to families. I also spend time with entrepreneurs who are launching businesses to help seniors age in place safely.  Along the way, I’ve accumulated a list of favorite information sources.  Here are seven.

#1 Favorite Blog: The New Old Age: Caring and Coping (The York Times) provides timely stories and electronic links to resources. If your family is actively caring for an older loved one, this site is worth bookmarking. Click here.

#2 Favorite Physician Leader #1: Dr. Atul Gawande whom I call the Justin Bieber of medicine, is a surgeon, writer, and an advocate for change in the way hospitals deliver care. He is considered a thought-leader, someone to follow if you have an interest in peeking behind the quality problems in hospitals. Caution: you may never leave a loved one alone to navigate hospital care again. Read his latest article here.

#3 Favorite Physician Leader #2: Dr. Servan-Schreiber turned his own experience with brain cancer into a campaign to help others prevent cancer or a relapse. If you have an hour, listen to his story here. Dr. Servan-Schreiber has teamed up with the MD Anderson Cancer Center in Houston, Texas to finance scientific studies that will evaluate the benefits of specific foods and activities such as yoga on cancer care. Neither the government nor the pharmaceutical companies will fund this research, so he is asking for donations from individuals and foundations. Watch this short video to learn more.

#4 Favorite Foods/Spices for Healthy Aging: Blueberries, Celery, Parsley, Turmeric and more. Click here for a full list.

#5 Favorite Book about Health Care: Overtreated by Shannon Brownlee explains how Americans are being subjected to unnecessary medicine in many parts of the country.  After you read Overtreated, reflect on the advice of gerontologist Dr. McCullough (author of My Mother Your Mother)—embrace “slow medicine”— and you’ll know how to support older loved ones.

#6 Favorite Radio Network: I have found podcasts on the Aging Smart Radio Network helpful. Here is one about long-term care insurance. Click here.

#7 Favorite Way to Find Information: Twitter

If you’re not on twitter, check it out. It’s simple to use and easy to find tips, resources, news, and people on a myriad of topics. Or, just follow me at @colpartners and I’ll do the research for you.

Do you have any favorite information sources?

©Circle of Life Partners™

Confused about Long-Term Care Insurance? Ask an Expert

by Jan Simpson and Tobe Gerard

Jan:  Since publishing Don’t Give Up on Me!, I have had dozens of conversations with adult children about their aging parents and the financial challenges of paying for elder care. The “sandwich” stage of life can quickly overwhelm families and deplete resources.  One way your parents and you can plan for the expenses associated with long-term care is to purchase long-term care insurance. As you know, I have no financial relationship with insurance brokers but I do have an interest in providing you with unbiased information from trustworthy experts. I’ve invited Tobe Gerard to be a guest writer and to share with us periodically her expertise about long-term care insurance.  Tobe has 30 years of experience in the insurance business and is highly regarded by her clients. Among her many commitments, she serves on the faculty of the National Alliance and educates insurance agents nationally. You may learn more about Tobe here.

I asked Tobe how she became such an advocate for long-term care insurance.

Tobe: I am a Baby Boomer and I’m living the life of so many Baby Boomers who are dealing with their aging parents. I believe that there is no other insurance protection available that can do more for families than adequate long-term care insurance. Why?

  • I have seen estates depleted. Very few people can fully self-insure the costs associated with an extended long-term care situation.
  • I have seen healthy spouses become so exhausted from taking care of their impaired spouses that they appear to be on death’s door themselves. One third of the “healthy” spouses actually die before the spouse for whom they have been the caregiver.
  • I have seen siblings argue mercilessly. Painful things can be said when one is exhausted physically and emotionally.

I’ve experience this personally and I’ve witnessed this professionally. That’s why I am passionate about educating people about the importance of long-term care insurance.

Jan: How would I know which long-term care insurance company is best for me?

Tobe: Here is what I tell my clients to consider.

1.  How long has the company been selling long-term care insurance? If the answer is less than 15 years, I’d want to be sure that they have other strong points in their favor. Longevity is important. The longer a company has been writing insurance long-term insurance policies, the more they’ve paid claims, have a sense of their lapse ratio, and have sound medical underwriting practices.

2. How important are the financial ratings of the company? Several rating services such as A.M. Best, Standard and Poors, Moody’s, Fitch, and Weiss, review insurance companies. I tend to use the Comdex which combines the ratings of all five services on a scale of 1 to 100. I try to work with companies that have a Comdex rating of 80 or above. You always want to use a company that has at least an “A” rating; an A+ or A++ is better. A “B+” or “B” may have been a good grade in high school, but it is not a good grade for an insurance company. Click here to see a list of insurance companies and their ratings.

3. How do prices compare among long-term insurance companies? If you get quotes from 4 or 5 companies, you may see some difference in premiums.  Avoid any company that charges half of what others are charging.  Many firms enter the long-term care insurance market with low pricing to “buy” business and then exit the market within a few years because their pricing wasn’t based upon sound principles.

4. Does the company have a reputation for aggressive rate increases? This is a difficult area to comment on because it seems that many of our tried-and-true long-term care insurance companies are filing for rate increases. I would suggest considering companies that have had reasonable rate increases rather than aggressive rate increases. Ask your agent what has been the rate increase history of the company or companies you are considering.

According to Tobe, the best time for adults to purchase long-term care insurance is between the ages of 55 and 64, when premiums are low and before a change in health may make one ineligible for insurance.

Do you have questions about long-term care insurance? Post them on our blog, Facebook or Twitter.

©Circle of Life Partners™

Summer Reading for A Cause

Dear Friends,

The Fourth of July weekend is a wonderful time to relax with family and friends by the shore, near the lake, or around the barbecue at home. To thank you for your support this year, I am offering a 20 percent discount for Don’t Give Up on Me! during the month of July. This discount is available only on purchases made through my blog, Don’t Give Up on Them.


As you may know, we donate all profits from book sales to innovative non-profit organizations that support elders or their adult care partners. Thus far, we have made donations to the Alzheimer’s Association, the Marino Center for Integrative Health, the Women’s Health Initiative at Brigham and Women’s Hospital, and the Memoir Project at Grub Street.  We have a long list of organizations that do outstanding work with elders and their families; it is our hope to support them as well.

My best wishes for a weekend filled with joy and laughter.

©Circle of Life Partners™

Power of Attorney

by Jan Simpson

My father called for my help, his voice laced with worry and regret. That morning he had learned that the pain in his side, a pain that he thought was caused from a touch of pneumonia, was lung cancer. After hearing the news, he contacted his attorney and then he called me. He didn’t want to talk about the cancer, in fact, he didn’t want to talk about himself. He wanted to know if I would be willing to help my mother “pay bills and such.” He had asked his lawyer to draft a legal document called a durable power of attorney.

A durable power of attorney is one of two important legal documents used to help support the life of an ailing parent or loved one (the second is called a health care proxy or a health care power of attorney). A durable power of attorney gives the person named broad power to manage someone’s financial assets. With that document in place, I could pay my parents’ bills, sell their house, take out loans, access their safe deposit box, and conduct any number of financial transactions on their behalf. Unlike a standard power of attorney document, the durable power of attorney gave me that authority even if he or my mother were declared mentally incapacitated.

My father knew that he and my mother needed support through the journey that lay ahead of them. Yet I heard in his voice that this decision, to ask me to assume a durable power of attorney for him and for her, was a difficult one.

Most of us prepare a will somewhat unemotionally; we know that death, like taxes, is inevitable. But giving an adult child the authority to make financial decisions is fraught with emotion, an admission that one’s ability is declining. It can be difficult to decide who is trustworthy, available, and able to make decisions in your stead. In a large family, parents may hesitate to choose one family member over another, not wanting to hurt feelings. In other families, parents may not feel comfortable asking any child to assume that level of control. And then, there is simply denial.

I felt awkward on that first Friday morning I sat at their kitchen table to pay the bills. I tried to dampen my discomfort by telling amusing stories about my children. My mother made a pot of tea, my father worked on a crossword puzzle. We silently acknowledged the change in our relationship and did our best to ignore its implications. Weeks turned into months, months into a year and I came to appreciate fully my father’s decision, for my parents were free to focus on their medical ailments and to enjoy time with their grandchildren without worry about “bills and such.” Equally important, I had a reason to spend a few hours with them alone each week, laughing and joking and relishing our time together.

Over cups of tea, I learned how my parents managed their household. I knew where their money was invested, where the insurance policies were stored, how their pension was distributed, and where their accountant lived. When my father passed away two years later, it took only a few months to transition all of the paperwork seamlessly for my mother. She would live for four more years without concern about money matters.

Have your parents or older loved ones prepared a durable power of attorney? Have you?

©Circle of Life Partners™

Long-Term Care Insurance

by Joan DiGiovanni.

When did it happen that I became middle aged? I am startled to think of this, so much so that I took a moment to look up the definition of ‘middle age’ (perhaps I should have just looked in the mirror). According to the Oxford English Dictionary, it is the “period between youth and old age, about 45-60 years old.” Unfortunately, that confirms it.

Issues that were once only my parents’ concern are now my very own. Long Term Care (LTC) insurance is one such topic that I knew nothing about but wondered if it is something I need now or ever will. I was referred to Tobe Gerard a long term care insurance specialist in the Boston area; Tobe sells insurance but only long term care and has been in the business for 30 years. She was kind enough to spend some time with me recently to help me understand it.

According to Tobe, one way to look at LTC insurance is that it is a way to protect your retirement savings from being depleted and gives you peace of mind should you find yourself with a long term illness. This insurance transfers the risk from you to the insurance company in exchange for a premium. The average age today of someone buying LTC insurance is somewhere between 55-64. Keep in mind, the premiums are less expensive the younger you are and if there is a change in health and you do not have coverage, the insurance may not be available.

Generally LTC insurance covers care that your private health insurance company, Medicare or Medicaid do not. LTC is typically needed when an individual is unable to perform the basic activities of daily living (ADLs) such as dressing, bathing, eating and walking. With many chronic illnesses, long term care is necessary and no one wants to either burden a family member or deplete their life’s saving. LTC insurance coverage includes costs associated with assisted living, adult daycare, home care, nursing homes and hospice.

When considering LTC insurance, first consider your assets. If you have over $70,000 in assets and you are over 50 years old, it might be time to look into this insurance. If your assets are limited, then Medicaid and community-based programs may be more appropriate.

Once you decide LTC insurance makes sense for you, Tobe recommends a 4-pronged approach to determine your coverage:

1. Determine what the per-day cost for care would be adequate in the area you plan to live. Checking with nursing homes and assisted living facilities in that area would provide a good baseline for cost.
2. Factor inflation into the calculation; this is determined by your age when purchasing the policy.
3. Consider the elimination period—it is the period of time where you are paying out-of-pocket expenses before the policy takes effect.
4. Determine the period of time that the policy will pay benefits to you; you can choose any time between 2 years and Lifetime. Sometimes this is decided based on your budget and what is affordable, while other times it is based on your genetic predisposition to certain chronic illnesses such as Parkinson’s or Alzheimer’s.

Ironically, we do not give a second thought to purchasing insurance for our homes and cars but when it comes to protecting our quality of life most often in our final years, the issue is often overlooked. Working with a knowledgeable long term care insurance specialist like Tobe will make these decisions a lot easier. And although I am still on the younger side of that ‘middle age’ spectrum, now is the time to weigh my alternatives.

Have you or your parents purchased long term care insurance? If so, consider sharing your experience.

©Circle of Life Partners™

“The User’s Guide to Health Care Reform” from AARP Bulletin

Are you confused about the new health care reforms?  The AARP recently published one of the clearest, most elucidating guides to the slew of disorienting health care reforms.  Of course, I’m not old enough yet to be a member of AARP, but my elderly spouse lent me his copy. Outlining the impact of reforms on eight different personal anecdotes (such as “If You’re Now on Medicare” and “If You Receive Employer Insurance” or “If You Run a Small Business”)  this special section in their AARP Bulletin explains what the new health care laws mean for you and your aging parent.

Starting in 2011, a person who is covered by traditional Medicare insurance can get an annual physical and many preventive services free.  This common sense legislation allows seniors access to care that may delay or even prevent the onset of debilitating diseases. While higher income families will pay a higher premium, the prescription drug coverage gap, called the “doughnut hole,” will begin to close.  And, many employers will begin to offer long-term care insurance through payroll deductions, which after five years entitle you to cash benefits toward the cost of services including home health aides.  I’ll invite an expert to blog more about this long-term care benefit soon.

Learn more by reading the AARP bulletin here.

Has health care reform been a topic around the dinner table with your parents?

©Circle of Life Partners™

A Little Known Financial Resource for Veterans

Is your parent or loved one a veteran?  Do they require daily assistance?  They might qualify for significant financial benefits from VA Aid and Attendance.

Unfortunately, many folks are unaware of the benefits available to veterans and surviving spouses.  My family and I certainly were while taking care of my father, a Navy veteran from WWII, living with lung cancer.  Your parent might be eligible for up to $1644/month, while a surviving spouse of a veteran might be eligible for up to $1057/month.  A married couple might be eligible for up to $1950/month.

These benefits apply to veterans and surviving spouses who require the regular attendance of another person to assist in bathing, dressing, meal preparation, medication monitoring, or other various activities of daily living; it is available to individuals who reside in assisted living communities, personal care homes, skilled nursing facilities, and those receiving personal in-home care.  The Veteran or surviving spouse must also have an income below a certain level, with assets no more than $80,000, but both of these are subject to certain qualifications.

Find the application here and visit for more information on eligibility.

photo credit:

©Circle of Life Partners™