Nursing Home, Assisted Living, Home Health Care Costs 2010

No surprise, but nursing home and assisted living costs are on the rise. MetLife has produced and published its annual "2010 Market Survey of Long-Term Care Costs". This is a great source to do a check of what is a good, reasonable, or high rate for care in your area (they have national and state-by-state analysis of the costs of nursing home, assisted living, and home health care, a break-down of costs by metropolitan areas within a state, and even an adult day care survey).

What are the costs of care in a nursing home versus assisted living versus home health care (certified aide or companion) in New Jersey? 

Nursing Home - Daily Cost of Care
Daily Cost of Care Low High Average
Private Room $156 $525 $307
Semi-Private Room $131 $331 $277

Which translates to an average of:

  • $9,030 per month for a private room or $108,360 per year
  • $8,310 per month for a semi-private room or $99,720 per year 


Assisted Living - Monthly Cost of Care in NJ
Monthly Cost of Care Low High  Average
Assisted Living Facility $2,000 $6,650 $4,286

Which translates to an average of $51,432 a year.


Home Health Care - Hourly Cost of Care
Hourly Rate Low High Average
Home Health Aide $17 $30 $21
Companion (Not certified) $16 $26 $20

 Which translates to an average of: 

  • $1,008 per month for 4 hours/3 days per week, or $12,096 per year
  • $3,360 per month for 8 hours/5 days per week, or $40,320 per year
  • $14,122 per month for 24/7 care, or $169,344 per year 

The study has lots of other great information about costs of care.  Some of these are summarized at in their article  "Costs of Long-Term Care Continue to Rise".  :

Private room nursing home rates rose 4.6% to $229 per day or $83,585 per year, while assisted living rose 5.2% on average to $3,293 per month, or $39,516 per year. These increases come on top of increases from 2008 to 2009 when both nursing home and assisted living costs were up 3.3%.

Costs for home health aides and adult day services were unchanged in the past year. Home health aide costs remain at an average price of $21 per hour, while adult day services costs are still $67 per day.

The highest average daily rates for nursing homes continued to be in Alaska, where rates are now $687 for a private room and $610 for a semi-private room. Costs are lowest in Louisiana, outside the Baton Rouge and Shreveport Metropolitan Statistical Areas (MSA), at an average of $138 per day for a private room.

For assisted living, the Washington, D.C., area had the highest average monthly base rate at $5,231, while Arkansas, outside of the Little Rock MSA, had the lowest average monthly rate of $2,073. 

Alaska is making New Jersey look good - a nursing home here is only $108,360 compared to $247,320.  I am guessing the number one piece of advise from elder care attorneys in Alaska is "move to the lower 48".


Bagel with or without a schmeer of Tax?

New York City is justifiably known for its bagels - having lived in other parts of the country I can testify that it must be something in the water because they just can't get bagels right in Boston, Charlotte, Tampa or LA. What can't New York get right? How it taxes its famous bagels.

This a a true head scratcher. Buy an unsliced bagel - no sales tax. Buy a sliced bagel - sales tax. Now I know that everyone is looking for sales tax revenue, but seriously? What are they going to do, send in undercover bagel auditors to do a tally of sliced versus not? And what if the bagel is purchased wholesale pre-packed sliced with spread? Since you were not the perpetrator of the slice, are you subject to tax? Or if you offer a knife to your customers, do they need to pay for the privilege?

So if I buy a dozen unsliced bagels its $10.00. If I buy a dozed sliced it is $10.89 (the NYC sales tax is 8.875% made up of (1) City sales tax rate of 4.5%, (2) New York State sales tax of 4%, and (3) the Metropolitan Commuter Transportation District surcharge of 0.375% - making Jersey look like a good deal).

Tax laws are necessary and even good I daresay (I for one appreciate having roads, police, and the army), but smart and reasonable tax policy is needed. This is an example of the hair on the end of the tail of the dog wagging the whole canine.

Thanks to Steven Loeb in our Tax Department for bringing the absurdity to my attention.

I signed a contract to Buy my first House - Now What? The Attorney Review Process.

So you just took the plunge and signed a contract to buy your first house. Congratulations!  You sit around the kitchen table with your Realtor and sign "the papers".  Are you done?  Do you now have a deal?  Not exactly.  

Kristen Klics, Esq. of our Real Estate Department is our guest blogger today on the "Attorney Review Process", whereby your attorney represents you to take the deal you made at your kitchen table and modify and improve it so that it becomes the deal you happily live with at closing.

So you have been pre-approved for a mortgage, found your perfect first home within your price range, and your offer has been accepted… what happens now?

The contract you have likely signed is a Realtor Form contract. The terms of your contract may be changed and modified so long as the form of contract is disapproved within 3 days. The misconception is that attorney review lasts 3 days. This is not true. So long as the form of contract is disapproved within 3 days, attorney review lasts until both parties agree to all the terms. This could be 3 days or 3 weeks. During attorney review either party may cancel the Contract for any reason. It is always a good idea to hold off on doing your home inspection until attorney review has been concluded. You do not want to expend money on a home inspection only to find out that Sellers received a better offer and have canceled pursuant to attorney review.

During the attorney review period you need to call the municipality where the property is located. You should find out as much information about the property as you can: Are there plans for development within 200 feet, does the property have any open permits or violations, is the property a legal 1 family, has there ever been toxic substances found on the property, is the property located in a flood designated area? I always tell my clients, the nicer you are, the more information you will receive.

The important thing to realize is that the attorney review period is your time to negotiate the terms contact and find out basic information about the property. Don't be afraid to walk away if you find out information about the property that you are not willing to live with.

Avoid a Guardianship - Acquire a Power of Attorney

Many times estate planning is focused on "what happens when I die"?  Often overlooked is the element of estate planning for while you are alive - namely designating and empowering someone to make decisions for you if you can't make them for yourself. Guest blogger Stacey Crowell Maiden, Esq. describes below why a Power of Attorney and Living Will/Health Care Proxy are so important, because the alternative, a Guardianship proceeding, can be so painful.

When a client consults with us to prepare an estate plan, we encourage the client to make sure he also has in place a Power of Attorney and Living Will/Health Care Proxy. While there are a number of reasons to have these documents, one that we stress particularly in conjunction with our Elder Law practice is their value in a potential Guardianship action.

The possibility of becoming mentally incapacitated is not something most people like to consider. But unfortunately, a decline or diminishment in cognitive abilities to the point of no longer having capacity to handle financial and medical affairs can happen gradually, such as with Alzheimer’s, or suddenly, as a result of a stroke for example. If the afflicted person has not appointed someone to act for him under a Power of Attorney of Health Care Proxy, then a Guardian must be appointed by the Court to act on his behalf.

A Guardianship action is brought by filing a Complaint in Court. Generally, two physicians must certify that the alleged incapacitated person is unable to handle medical and financial affairs and is in need of a legal guardian. An attorney is appointed by the Court to represent the alleged incapacitated person, and is paid from the incapacitated person’s funds. In most cases, a hearing is held in Court. Once a Judgment of Guardianship is entered, the guardian will have to post a bond, also paid from the incapacitated person’s assets. The guardian must account to the Court as to the finances and well being of the incapacitated person.

As you can see, a Guardianship action is costly, time consuming and a matter of public record. In addition to offering considerable cost savings, allowing for efficient administration of your affairs, and maintaining privacy, preparing a Power of Attorney and Living Will/Health Care Proxy allows you to control who you wish to act for you, rather than a Court.

Non-Profits - Pay Attention - You could lose your tax exempt status on October 15

Calling all non-profits - Act NOW or lose your tax exempt status.  

The bad news - any non-profit that has not filed its income tax return Form 990-N by October 15, 2010 will lose its tax exempt status and need to reapply.

The good news - you still have time to fix the problem.  You can file the Form 990-N electronically for tax years 2007, 2008 and 2009 on or before October 15, 2010 and keep your tax exempt status.  You must file for all 3 years if you have been in existence that long and this offer expires on the 15th.

Our colleagues at Sax Macy Fromm & Co., CPA's have sent around a newsletter describing the issue for non-profits.  

The scariest part - over 9000 New Jersey non-profits are at risk.  Click here to see if you are on the list.

The Art of the Estate Plan

So, is estate planning an art or a science? The Wall Street Journal finds today that "Estate Planning: It's an Art, Not a Science".  The article posits:

"It is logical that an estate plan should offer a clear map of what a person owns, but this isn't always the case. Sometimes that person doesn't have an accurate balance sheet to start with, and chooses not to update it or to share every detail. Bad communication between attorneys and advisers may also create trouble."

While I grant that all these things may be true, the article seems to miss the point that the creation of the estate plan is based on a snapshot in time.  Although the estate attorney will certainly discuss possible future events, nobody has a crystal ball, so it is impossible to know exactly what assets a person will have at the moment in time when they die, or even what the laws will be that affect those assets.

One other troubling point that I find is that the article seems to imply that there should be assets left when person dies. Many an estate planning attorney will tell you that the best estate plan is to spend all your money before you die; the problem of course being that we don't know exactly when that date is. Often times the client may have more wealth when they created an estate plan than they have when the plan is actually carried out. This is particularly true these days given the Great Precession. Remember that these are the person's assets to use as they see fit, desire, or need to until the point in time when they pass away; there is no right of inheritance.

So what must the most artfully designed estate plan contain? Two things: flexibility and clarity. One reason for working with an attorney to create an estate plan is to make sure that you've explored questions about the possible future so this flexibility can be built into your plan. What if you have less money? What if you have more? What if your children are 25 versus 35 versus 55? All of these things need to be considered.

A fair point made in the article is that many times the client doesn't understand their estate plan, even though they sign the documents.  While the actual documents themselves may contain "legalese" or significant and sometimes convoluted tax provisions, there is no reason why the attorney should not clearly communicate the structure of the estate plan to the client.  Our office prepares both a summary letter and a flowchart summarizing exactly what each client's estate plan contains. Many times I find that it's the flowchart that the client refers to year after year as we review their estate plan to make sure their wishes are still being carried out.

Is a Will a Will? The Devil is in the Details

If you mean for a Will to be your Last Will and Testament, will it be?  While the answer is "most likely" my colleague Don Vanarelli, Esq. has a great post outlining a set of facts where the decedent clearly intended her Last Will and Testament to be different, but that details of execution prevented if from being admitted as such.

In Don's post "A Draft Will That Was Not Reviewed By The Client Before Death Cannot Be Admitted To Probate" he discusses the recently decided case of In re Macool where a client went to her attorney with a handwritten note of changes to her Will naming a new beneficiary, the attorney dictated a draft revised will in the clients presence, the client made an appointment to come back to sign the revised Will, but the client tragically died a mere hour after leaving the attorneys office.  So, with all of her clear intent to make a new Will, was Ms. Macool successful?  Sadly, the answer is "no" because even though Ms. Macool had all the intent in the world to make a new Will, none of actions rose to a level to meet the formal requirements to create a Will.

Bear in mind that a Will only comes into play when you are dead, and by definition you can no longer discuss your intent with anyone.   As a result, there are fixed formal requirements in the law for what a document must "look like" to be deemed a Will.  New Jersey even has relatively liberal requirements as to what can be a Will as it allows 3 categories of Wills:

  1.  A Formal Will signed by the decedent and witnessed by 2 people (N.J.S.A. 3B:3-2(a)).  Think here of the Will drawn up be a lawyer and executed in her office.
  2. A holographic Will - a writing intended to be a will that is entirely in the deceased person's handwriting and signed by him or her (N.J.S.A. 3B:3-2(b)).  This is the original DIY will - I write out what I want to happen to my stuff on my death and sign it.
  3. An Intended Will - a document that is neither a Formal Will nor a Holographic Will if there is a writing where it can be proved by clear and convincing evidence the decedent intended the document to be their Will (N.J.S.A. 3B:3-3).

Although a document or writing added upon a document was not executed in compliance with N.J.S.A. 3B:3-2, the document or writing is treated as if it had been executed in compliance with N.J.S.A. 3B:3-2 if the proponent of the document or writing establishes by clear and convincing evidence that the decedent intended the document or writing to constitute (1) the decedent’s will;

Even with all these outs, the court could not find that Mrs. Macool had effectively created a new Will.

  1. She clearly didn't sign a Formal Will.
  2. Her handwritten notes to her attorney weren't signed, so those could not qualify as a Holographic Will.
  3. She had never even looked at the draft Will the attorney drew up, so that couldn't be an Intended Will. 

While the Court clearly made its decision within the law, the issue here is that the law did not provide a means for the Court to provide justice for Ms. Macool.  Her last wishes were clear and not in doubt, but since the communication of those last wishes did not meet the technical requirements, the Court could not enforce them.  Once also cannot help wondering why if her wishes were so clear as the record suggests, the unintended beneficiaries wouldn't follow them out of a sense of rightness.

The lesson to be learned?  If you want your Will to be a Will, make sure that you have executed it within the bounds of the law.