An estate planner’s introduction to the growth and business of elder law.
The modern family will encounter many significant issues as they age, not the least of which are wealth preservation and health care. We, as estate-planning attorneys, are positioned to counsel both individuals and families as they plan for and endure these distinct matters. While clients are concerned about both of these topics, there’s a division between the two. For example, those who are concerned about federal estate taxation are less concerned about accessing and paying for health care, and those who are focused on accessing and paying for health care aren’t as concerned about taxation. Interestingly we, as attorneys, also have a similar dividing line as to our practices. Those of us who select the wealth issues will generally build an estate planning and taxation practice, and those who focus on the health care issues will develop an elder law practice. Despite the division, there’s significant overlap between these two areas of law, for example, both involve real property, trusts, wills, agency, intestacy, capital gains taxation, asset protection, incapacity planning and, of course, family dynamics. But, there’s one distinguishing aspect or focus that simply delineates the two disciplines: wealth and health. The remaining non-shared areas are what separates and defines these wealth and health practices: estate accumulation and taxation for the estate-planning attorney and government benefits eligibility and long-term care (LTC) for the elder law attorney.
Elder Law
So, what exactly is “elder law”? The National Academy of Elder Law Attorneys (www.naela.org) put out a solid definition prior to expanding its mission to include special needs planning. NAELA defined elder law as “a holistic practice” and explained that an elder law attorney:
1. handles general estate-planning issues and counsels clients about planning for incapacity with alternative decision-making documents;
2. assists clients in planning for possible LTC needs, including nursing home care; and
3. helps locate the appropriate type of care, coordinating private and public resources to finance the cost of care and working to ensure clients’ rights to quality care.1
Elder law itself can trace its roots back to 1965 when the Social Security Act was signed into law, creating both the Medicare and Medicaid programs. Medicare, as we still see today, is the health insurance program for the medical needs of the aged and disabled. Medicaid, on the other hand, was created as a medical and LTC program for those who are financially eligible only. As these programs evolved, it was the elderly that mostly used the Medicare program for their medical needs and the Medicaid program for LTC expenses. This was, in my opinion, not only the eventual beginning of elder law due to the need for attorney representation during government agency appeals, but also the birth of our current, divided health care delivery system.
With regard to the elderly, Medicare provides benefits for acute medical needs, that is, primary care, hospitalization, prescription drug coverage and rehabilitation services. Medicaid, on the other hand, provides benefits for LTC, that is, assistance with chronic or custodial needs, such as the activities of daily living in both residential and facility settings.
Two Systems
The result of this division is two separate systems for financing care: one for acute medical needs of the aged and disabled of all financial means and the other for the chronic, LTC health needs of the impoverished. Despite some well-intentioned federal and state attempts, we don’t as of yet have one government program for the financially stable that covers both the medical and chronic LTC needs of the aging population. This dichotomy translates into the two following potential scenarios:
1. A financially stable individual with above-average income who develops cancer has his acute medical needs met financially through his Medicare insurance.
2. That financially stable individual with the same above-average income developing Alzheimer’s disease has to privately fund the necessary chronic health LTC that he may need for the next 15 years.
Generally, one has insurance coverage based on age, and the other may have insurance coverage based on a financial inability to pay. It appears that your client’s diagnosis determines whether he has medical insurance coverage or not.
This dichotomy fostered the growth of the elder law field as the middle class primarily needed to employ attorneys to help them gain that sought-after financial eligibility for Medicaid should they be struck with a chronic, long-term illness versus a defined medical condition covered by Medicare.
Paying for Chronic Care
As Medicare doesn’t have LTC benefits, there are three ways in which an elderly client can pay for his chronic care: (1) private payment with personal funds that can exceed $7,000 per month for home care or $16,000 per month for nursing home care in the New York metro area, (2) a robust LTC insurance policy that has both home care and nursing care benefits, or (3) by becoming financially eligible through divestiture for the Medicaid program. This divestiture is often accomplished through asset protection strategies involving gifting and irrevocable income-only trusts. The complexity of the Medicaid transfer penalties, combined with each state’s related law, can make for a very complicated and cumbersome eligibility attempt. In addition, should a care need arise prior to eligibility, a number of scenarios can greatly complicate the elder client’s needs in an LTC situation, for example, lack of pre-planning or a crisis medical event or even diminished capacity, none of which fit nicely into the typical acute medical model that’s familiar to all of us: illness, doctor visit, hospitalization, medication and recovery process. The chronic, long-term patient, however, may follow this typical medical model trajectory but a complication with a chronic issue such as dementia will certainly derail the best efforts of the most willing clients, doctors and caregivers.
Can we assume, therefore, that because we have two types of patients and two types of financial payment systems, we also have two independent models to deliver the necessary care? Unfortunately, the general answer is no. The above timeline I referenced of illness, doctor visit, hospitalization, medication and recovery is, in the LTC context, usually extended to include rehabilitation placement and then discharge with short-term intermittent home care or placement assistance if an LTC nursing facility is ultimately needed. This cycle can occur for years, usually leaving the elder and family confused and frustrated, as these chronic illnesses often don’t fit into nice, black and white boxes as easily as an oft-predictable medical condition might.
Inadequate Model
I’ve seen in my practice over the last 20 years that the medical model of care generally isn’t adequately equipped to assist the elderly client suffering from long-term chronic issues such as Alzheimer’s disease, depression and Parkinson’s disease. As such, there are deficiencies in the current medical model of care, that is, a lack of care coordination and active follow-up and patients and caregivers being inadequately trained to manage illnesses. In essence, an acute care medical model is neither designed to support the elderly client in the day-to-day self-management of his chronic illnesses nor to coordinate or advocate for good chronic illness care on an ongoing basis.2 A helpful way to visualize the differences is that the care needed under the medical model is usually received in medical facilities, such as the doctor’s office, hospital or rehabilitation facility, and there are set protocols for the health care team, the patient and the caregivers to follow, whereas the chronic, long-term patient and her caregivers may face their toughest challenges outside of those trusted medical environments and in between those visits.
Through the years, there have been noble attempts by federal, state and private initiatives to improve the chronic care delivery system, most notably, The Chronic Care Model as developed by the Improving Chronic Illness Care Initiative. This model calls for the transformation of health care from a system that’s reactive —responding mainly when an individual is sick—to one that’s proactive and focused on keeping an individual as healthy as possible. The goal of this model is to have an “informed, activated patient” working with a “prepared, proactive practice team,” and between the two, there are “productive interactions” that result in “improved health outcomes.”3 To achieve this, the delivery of chronic care services will require:
• A systematic approach to emphasizing self-management;
• Care planning with an inter-disciplinary team;
• An emphasis on ongoing assessment and follow-up; and
• A proactive focus on keeping an individual as healthy as possible no matter where she lives (home, assisted living or nursing home facility).4
Chronic Care Issues
As the U.S. population ages, the number of people needing LTC and chronic care services will rise. On average, according to AARP, 52 percent of individuals who turn 65 years of age today will develop a severe disability that will require LTC services for a period of approximately two years.5 Due to the complicated, unknown paths that these chronic illnesses may take, chronic care raises a tremendous amount of issues best summarized by these three questions:
1. How does a client get the best quality care no matter where he’s living and thereby maintain or improve the quality of life?
2. How does a client access all benefits available and understand which coverage or benefit pays for which service?
3. How does a client protect the maximum resources and income so that expensive LTC costs don’t consume life savings, thereby allowing for provision of a spouse and children if necessary?6
Three Business Models
I’ve found there are three different business models that elder law attorneys can use in their practices to assist families with these issues.
Medicaid planning attorney. This model focuses on asset protection and applying for Medicaid benefits. In this fee-for-service transactional model, the attorney will undertake the legal and financial work, while the family will cobble together their own health care team of care managers and advocates to assist with the numerous care needs. This attorney only answers the third question above.
Elder law attorney. Here, the attorney will undertake the asset protection and Medicaid benefits like the Medicaid planning attorney, but she recognizes that the need for care interventions, coordination and care is a driving force and will therefore refer the family to a non-attorney business that offers care management and advocacy services. The result is that this attorney is still only answering the third question but has referred the family to an outside service that will help with the first two questions. This is also a fee-for-service, transactional model, in which the law firm only undertakes the legal and financial aspects.
Life care planning. In this model, the elder law firm answers all three questions. The focus of the practice is primarily the elderly client’s care needs and secondarily, the assets. Life care planning is an innovative and “holistic, elder-centered approach to the practice of law that helps families respond to every challenge caused by chronic illness or disability of an elderly loved one.”7 A life care plan model is different from the other two models in three ways: (1) a life care plan is generally for a period of time such as one year versus a singular transaction that allows the firm to work with the family through the unknown twists and turns that their loved one will undoubtedly face; (2) life care planning is interdisciplinary, which means a care advocate will be on staff working under the attorney’s supervision. This allows for a unified approach to the law and care goals; and (3) life care plan engagements are usually all-inclusive in nature so as to be able to assist the elderly client and family no matter where the care needs lead them. For example, the firm can assist with bundled services, such as estate planning and asset protection, the financial and medical eligibility for Medicaid programs for both home care and nursing home care and LTC navigation, advocacy, coordination and support.8
The life care planning model of practice was developed in the 1990s by Tennessee elder law attorney Timothy L. Takacs as a way to assist elder clients in navigating their way through their chronic care needs. As other law firms began to also use this model, the need for support, resources and guidance grew and resulted in the creation of the Life Care Planning Law Firms Association (LCPLFA). Life care planning law firms use a tool called the “Elder Care Continuum” to help families understand the natural progression of aging and its impact on a loved one’s health, mobility, housing and financial resources.9 (See “The Elder Care Continuum,” this page.)
While the other two models of practice generally focus on saving the elder’s money to pass on to the next generation, the LCPLFA website states that:
Life Care Planning focuses on using the elderly client’s money for the elder’s benefit. In a Life Care Planning law firm, an inter-disciplinary team of elder law attorneys, care coordinators and others work together to develop an estate plan, protect assets, qualify for public benefits, coordinate care, provide education and decision-making support, advocate for high-quality care and intervene if there are problems with care providers.10
I believe that to create a prepared, proactive practice and still focus on the legal aspects of the engagement, the elder law attorney should have the care component in-house. That need is fulfilled by a geriatric professional, such as a social worker, registered nurse or other geriatric health professional who can step into that advocacy role and guide the client and caregivers. The role of this elder care coordinator is to help clients and families identify care problems and assist in solving them, assist families in identifying and arranging in-home help or other services and review medical issues and offer referrals to other geriatric specialists. It’s primarily through the elder care coordinator’s efforts that the client is truly supported through her chronic care journey.
True Evolution
As a practice, the organic growth of elder law has been a true evolution born of the pre-existing discipline of estate planning and then matured through legislative entitlements and the resulting quagmires and finally compounded by the harsh realities of aging, illness and the financing of the care. Benjamin Franklin has been quoted as stating that “in this world nothing can be said to be certain, except death and taxes” and not only is it true to this day, but also, we know that estate-planning attorneys are well-positioned to help with both. However, before death often comes illness, and the elder law attorney will always be there to guide and assist his aging clients through some of the toughest times they’ll ever face. Gratefully, the business of elder law, just like the hardiest of my clients, shows no signs of slowing down. See “For More Information,” this page, for additional resources available to attorneys.
