Recently, a HECM client contacted ReverseFocus.com with a crucial question: is his new wife covered under HUD’s Non-Borrowing Spouse (NBS) provision if he passes away first? He’d saved this blog post that touched on the topic, explaining he hadn’t called sooner because he was trying to find someone local who could answer the inquiry knowledgeably. Finally, at wit’s end, he got in touch with Reverse Focus.
This scenario points up the importance of planning ahead.
Procrastinate at your own risk
Procrastination is rampant within families when it comes to planning for long-term care and the distribution of assets at death, says elder law attorney Bill Fralin, principal of ChronicCareAdvocacy.com, a customized program that combines legal representation, asset protection, care coordination, and advocacy for seniors. In addition to feeling overwhelming, this kind of planning is emotionally difficult. But failing to plan can take a far greater toll, something the HECM holder described above recognized and wanted to rectify while there was time.
From planning for long-term care to estate planning to planning for business and life transition, it’s important to face the future without fear — or rather, as the popular expression goes, to feel the fear and do it anyway. With groundbreaking books such as Can’t We Talk About Something More Pleasant? and Death Cafes, where people gather to discuss the inevitable over dinner, we’ve entered a time when acknowledging our mortality is more acceptable than ever before — even if nobody looks forward to the event.
Simple cases rarely are
Just as most of us hope to pass peacefully in our sleep, people hope their end of life will be easy for their families to manage, even if they fail to plan. Unfortunately, neither situation is typical, notes Fralin. “The more likely reality is that you and/or your spouse will suffer a period of medical need prior to your death, requiring long-term care and possibly resulting in a period of incapacity. Failing to plan for this reality can be very expensive.
“By not having advance medical directives and durable powers of attorney in place, any period of incapacity would result in the need for your family members to go to court to obtain guardianship over your person and conservatorship over your finances. In addition to being time-consuming, the cost of the proceeding can easily run into thousands of dollars.
“Another cost of procrastination is that the cost of long-term care insurance goes up as you age — the sweet spot is your early to mid- sixties. Medicare only offers temporary assistance with rehabilitative and skilled nursing care, and is not likely to be a reasonable resource for long-term care needs. Therefore, for many middle-class Americans, Medicaid has become the primary source for payment of long-term care needs. What, then, are the costs of procrastination in planning for long-term care?”
Why worry? It will probably never happen
While Fralin’s counsel can create a frisson of foreboding, as anyone who’s lived awhile knows, the future is a great unknown, and worry (which tends to create procrastination) just wastes time and energy. According to a Cornell University survey, a primary regret of older people’s lives was spending so much time worrying. James Huang, 87, shared, “I ask myself, What possible difference did it make that I kept my mind on every little thing that might go wrong? When I realized that it made no difference at all, I experienced a freedom that’s hard to describe. My life lesson is this: Turn yourself from frittering away the day worrying about what comes next and let everything else that you love and enjoy move in.”
Ironically, worry itself can lead to long-term health consequences, such as cardiovascular disease.
So encourage your reverse mortgage prospects and clients to plan ahead, and to allow the future to unfold as it will. Planning rather than procrastinating means they’ll have one less item to worry about, freeing up enormous emotional energy for life, love, and anticipation for what’s ahead.