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Housing Assistance

No Elder Lawyer… Will My Mom Lose $360,000?

Money going down the drain

Mom’s going Broke…

My mom took out a reverse mortgage in 2008.

After she got Alzheimer’s she entered a senior care facility. My sisters and I sold her house to pay off the reverse mortgage, leaving her with $360,000.

Luckily, mom was a planner.  She purchased long term care insurance when she was in her 50’s.

Like many other insurance buyers, she bought a policy that paid out for 5 years.

Guess what:

pay-nursing-home

Most people don’t really consider the chance they’ll be in senior care for more than 5 years. I know mom didn’t.

She thought she was fully covered.

5 years later, other than dementia, mom’s healthy as a horse. We have no idea how long she’ll require senior living.

However, we know that the cost of her care is now $9,000 per month.  Her entire life savings will be wiped out within the next 40 months.

Now, my mom lived with pride, dignity and a sense of personal responsibility her whole life.

It is a travesty that she will end her life broke and penniless.

Would Having an Elder Care Attorney Have Helped?

elder-care-attorney

We made the mistake of not consulting an elder care attorney when helping mom plan for life in her senior years.

If we had she might have sheltered her estate from being decimated by end of life medical expenses.

Here are a few facts:

American retirees expect to leave an average inheritance of almost $177,000 to their heirs, the sixth highest of any country, according to an HSBC survey.

However, anything can happen to change a retiree’s inheritance plans – like unexpected medical expenses.

A recent study from Ameriprise Financial found that retirees lose an average of $117,000 to unplanned events. 

That leaves $60,000 in actual inheritance. 

What happened to the other $117,000?

Usually medical expenses and senior care (before the senior had the good manners to finally die before it was all gone).

But wait…

If everyone 65 and over has Medicare what were there additional expenses for?

I mean…

…doesn’t Medicare cover everything?

Not even close…

It’s a common belief by many that Medicare covers all of their medical expense after an illness.

Did you know that Medicare is only for “rehabilitative care” and usually ends after 90 days?

 If an illness is determined to be “palliative” or “chronic,” you’re on the hook for the rest…

…until you get down to your last $2,000. 

Once you’re totally broke you can qualify for Medicaid.  

There is literally no social safety net between when Medicare benefits run out and the long spiral down to Medicaid eligibility.

That one fact alone has caused seniors to desperately seek other solutions.

senior-safety-net

For example:

According to a 2010 report by University of Michigan Law School professor John Pottow, seniors are the fastest growing demographic of bankruptcy filers.

Medical expenses are the leading cause.

Consider a more desperate situation:

Say one spouse is healthy while the other spouse isn’t…

Imagine one partner requires full time care for reasons such as Alzheimer’s…

Couples who would never dream of ending their marital status are forced to suffer the indignity of seeking a divorce in order to protect the healthy spouse from losing everything. 

It really, really happens.

Here’s what Craig Reaves, past president of the National Academy of Elder Law Attorneys, has to say about a scenario for a couple named Mr. and Mrs. Jones:

“Divorce happens more and more frequently. If the couple legally divorces, the spouse who’s not incapacitated has no duty to support the other and can keep whatever the court allocates. In the case of the Joneses, the money awarded to the former Mrs. Jones has to be spent for her care until she qualifies for Medicaid, but the court could allow an uneven division so that Mr. Jones gets more than she does.

These situations are heartbreakers; the sessions in my office when we talk about this possibility are often full of tears. But financially, divorce can be a real advantage. More assets can be set aside for the spouse at home, and there’s no estate recovery.”

Planning in advance can help avoid these extraordinary actions. 

Not planning and refusing to seek advice for contingencies might look more like this:

For a 90-year-old WWII veteran, eviction from his lifelong Buffalo home Saga of bank foreclosure is marked by deep debt as caregiver for wife

eviction-alzheimers

Johnnie H. Hodges Sr. was evicted over the summer, carried out on a stretcher after an almost two-hour standoff, when he fell behind on mortgage payments and other bills during his wife’s long struggle with Alzheimer’s.

(Photo: Derek Gee, Buffalo News) Read the full story at: http://www.buffalonews.com/city-region/for-a-90-year-old-wwii-veteran-eviction-from-his-lifelong-buffalo-home-20150709

But I have long term care insurance so I’m covered right?

Don’t count on it…

Let me share another story that has impacted my family and made this subject very personal for me.

catch-22

Here is a Catch 22 story about my deceased brother-in-law and my younger sister. 

Kenny was 20 years older than my sister Bonnie but you’d never have known it. 

At 72 Kenny looked 50. 

He seemed to be the poster boy for what a healthy senior should look like. 

As a retired police officer Kenny had a good pension while also generating a second income as a security consultant. 

My sister was a practicing psychologist with a busy practice.  Life was good and both planned to have many more active years together enjoying the fruits of what they had accomplished. 

One day during a routine medical exam an abnormality was discovered and later it was confirmed that Kenny had cancer of the neck and spine. 

He was on Medicare at the time so all surgeries and “rehabilitative” medical procedures were covered. 

Unfortunately Kenny was terminal so further palliative care was not covered and they didn’t have the insurance to cover the cost of the extensive care Kenny would need after leaving the hospital. 

Additionally – and here’s the catch 22 – as the wife of a retired police officer Bonnie was able to keep collecting his pension after his death as long as she was still his wife when he died.

That meant that the divorce relief received by Mr. and Mrs. Jones (that I outlined in the previous section) was not available to Bonnie unless she was willing to give up Kenny’s pension in order to save half of their assets for herself. 

After much consideration Bonnie concluded that even if it whipped her out financially she would see to it that Kenny was taken care of and she would stay married to him.

(Now remember, she was in her 50’s at the time so she was faced with many more years of life with no money….)

Fortunately divine intervention spared her that fate as Kenny died before leaving the hospital. 

In other words, Kenny had the “good manners” to die soon.

I’m convinced that he willed it for himself rather than allowing his illness to bankrupt my sister.

What the hell is wrong with us?

inheritance

Above is a chart of the average inheritance left to heirs by country. 

Notice that as the richest country in the world, the USA ranks 5th with Australia beating us by almost 3 to 1. 

Why is it that France, the UK, Singapore, and Australia beat us when it comes to personal wealth? 

3 words…

Universal Health Care 

These countries build into their social structure that seniors should not be robbed of all that they’ve gained in a life time just because the last two years of medical care before death are enormous. 

These countries value their seniors and give them the respect that they deserve.

Until we change the thinking of our population as a whole we should use whatever legal means we can to gain access to social programs such as Medicaid and protect our remaining assets from being consumed, (embezzled) by the Health Care Industrial Complex. 

That starts with consulting an Elder Care Attorney.

 My siblings and I wish that in my mother’s case we would have done that sooner.

Housing Assistance

Why You Should Consider Senior Housing Assistance

80 Years Of Assistance For Seniors

If you’re a senior, you no doubt have already taken advantage of two of the three social programs enacted by our federal government to help the country’s elderly population to live out their silver years in relative security.

In fact, security is so important to the welfare of seniors that the law governing two of these three programs titled them the Social Security Act and the US Housing Act.

Collectively these programs aid seniors in the three essential life sustaining areas of income replacement during retirement, medical insurance and housing shelter.  Let’s take a look at how they impact you.

The Social Security Act

social-security

The Social Security Act was signed into law by President Roosevelt on August 14, 1935.

In addition to several provisions for general welfare, the new Act created a social insurance program designed to pay retired workers age 65 or older a continuing income after retirement.

In today’s society, what senior would refuse to accept that monthly social security check? No one!

We have come to see this benefit as simply re-payment for all the years that we’ve paid into the program. It’s not considered welfare even though the amount we are expected to withdraw during our remaining years is far greater than the amount we’ve personally contributed during our working years.

It was a deal that the people made with the government in 1935 and we fully expect the government to uphold their end of the deal!

Medicare For Seniors

medicare for seniors

Nearly 30 years after the Social Security Act was signed by President Roosevelt, Medicare was established.

On July 30, 1965, President Lyndon Johnson signed a bill that strengthened the Social Security Act with a new social insurance program which extended health coverage to nearly all Americans age 65 or older. Former President Truman was in attendance and received the very first Medicare card at the ceremony.

The Medicare program meant that every senior in America could be assured of the best medical care available regardless of wealth or social status.

Considering the fact that Medicare is a result of the bargain we made under the Social Security Act, who in their right mind would refuse to take advantage of this program?

Sadly, many seniors are not fully aware that this assistance program is provided to them by the Federal Government. This was demonstrated in 2009 by a protester at a campaign rally beseeching the candidate to “keep the government’s hands off of his Medicare!”

How do you break the news to this uninformed voter that he’s the beneficiary of the very thing he’s fighting to restrict?

The simple answer is that you don’t….

 Some people are just too closed-minded to learn the truth….

The Housing Choice Voucher Program

The 3rd program is one that you probably haven’t thought to take advantage of….

In 1975, the federal Section 8 program began as a way to provide assistance to low-income families, elderly people, and people with disabilities to rent decent, safe, and affordable housing in the community.

Through this program, individuals and families receive a “voucher” — also referred to as a “subsidy” — that can be used in housing of their choice that meets the Section 8 program requirements. These subsidies are long-term and considered permanent housing.

A federal housing law passed in 1998 gave the program a new name — the Housing Choice Voucher Program (HCVP).

The HCVP Is Distributed By The Public Housing Authority

While the HCV program is funded by the federal government through HUD (Housing and Urban Development), it is administered, distributed and managed at the local level via an office known as the Public Housing Authority or PHA.

These local offices are given a specific number of vouchers to distribute regardless of the number of qualified potential recipients in its geographical area…. and that’s the catch 22.

The Welfare Stigma

welfare-stigma

Many seniors have refused to even consider this option because they see it as welfare, which in fact it is. However it’s no more so than the other two programs I’ve outlined.

The only real difference between the HCVP and the other programs (SSA and Medicare) is that the others are “entitlements” and therefore everyone is entitled to receive the social benefits.

The Housing Choice Voucher is Not An Entitlement.

In fact, you must be eligible to qualify and even that doesn’t guarantee receiving benefits.

If all three are social programs equally paid for by the collection of your taxes (meaning you’ve paid in to the program just like SSA and Medicare), why would you refuse the benefits?

Unlike the SSA programs which are not needs-based, the HCVP is reserved for those truly in need of housing assistance. The HCVP has a specific budget authorized by congress each year.

The budget is much smaller than the expenditure that would be needed to provide assistance to all that qualify.

There Are HCV Waiting Lists In Every Area

There are huge waiting lists for the hcv program

Due to the fact that the budget is unable to assist everyone that qualifies, a waiting list is created in each area.

Being placed on these waiting lists can potentially mean years of waiting before being accepted.

In fact, below is an actual clip from the Palm Beach County, Florida PHA:

HCVP Waiting List

“The Palm Beach County Housing Authority is not currently processing any new HCV applications. The Housing Choice Voucher program waiting list is currently closed. The Wait list for the Housing Choice Voucher (HCV) Program was opened for applications on September 8th 2011, and was closed on Thursday, September 22, 2011.  The WPBHA received 18,804 applications and via a lottery, placed 5000 applicants on this Wait list. Currently the WPBHA administers a combined total of approximately 3,200 Housing Choice Vouchers which includes 300 Veterans Affairs Supportive Housing (VASH) Vouchers.”

Of 3.9 million very low-income renter households aged 62 and over who were eligible for rental housing assistance in 2011, just 1.4 million (36 percent) were able to secure this aid.

How To Qualify For Housing Assistance

how to qualify for housing assistance

The formula for qualifying for the HCV program can sound confusing but it’s really pretty simple.

There are three categories of “adjusted gross income” which determine if you qualify to apply.

They are “Low Income”, “Very Low Income”, and “Extremely Low Income”:

  • Low Income is equal to 80% of the median income for the area.
  • Very Low Income is equal to 50% of the median income for the area.
  • Extremely Low Income is equal to 30% of the median income for the area.

All of that sounds reasonable, but in reality the majority of the voucher (70%) must go to those in the very low income category.

So if you live in Palm Beach County FL, where the median house hold income is $76,000, you need to be earning about $24,000 per year or less to qualify.

Why You Haven’t Heard Much About The Housing Choice Voucher

Perhaps the reason that you don’t know more about how HCVP can benefit you is because no one is incentivized to tell you about it.

No one gets paid a commission for helping you investigate the program. In fact, it’s actually a felony to charge a fee to help someone fill out the application and this is why the program goes under subscribed.

Compare that to the case of programs such as SSA Medicare and HUD sponsored HECM reverse mortgage loans.

There are plenty of people available to answer your questions, help you apply and even follow up to make sure that you receive the benefits that you’ve applied for.

That’s because these programs are promoted via “for profit private companies” with agents who make a commission for helping you.

On the other hand, attempting to gain information through a PHA is very much like going to the DMV.

dmv

These are “nonprofit” public service institutions that have absolutely no financial incentive to help you.

 The term, “it all pays the same per hour” is very much a part of the culture in these organizations.

As if that didn’t make it difficult enough, it’s actually a federal offense for anyone to actually charge a fee for helping you fill out the paper work or advise you on the process.

This lack of financial incentive for agents is the main reason no one is there to help you.

Having said this, there are two places to get some aid in understanding both options available to you and what you need to do if you’d like to pursue assistance.

Here are two that I would recommend looking into:

HUD Approved Counseling Agencies

HUD sponsors housing counseling agencies throughout the country that can provide advice on buying a home, renting, defaults, foreclosures, and credit issues.

You may search more specifically for a reverse mortgage counselor or if you are facing foreclosure, search for a foreclosure avoidance counselor.

The website can be located at: http://portal.hud.gov/hudportal/HUD?src=/topics/information_for_senior_citizens.

The National Housing Law Project (NHLP)

The National Housing Law Project (NHLP) is a nonprofit national housing and legal advocacy center established in 1968. Their website is: https://www.nhlp.org/

Today it’s estimated that over 3.6 million seniors would qualify for assistance while only 1.4 million are actually receiving the benefits. That is a travesty in my eyes and something I feel passionately about changing.

For more facts on how you might qualify and benefit from housing choice voucher program call us at 800-407-5696 or click the picture below

qualifying for rental assistance