Episode 73: Planning your future is in your hands.

Daniel Zagata of Evershore Financial Group

Key Points:

• Importance of long-term care planning: Even if you don't expect to need it, planning for long-term care is essential.
• Medicare limitations: Medicare does not cover custodial care, which includes assistance with daily living activities.
• Financial implications: Long-term care can be expensive, and it's important to have a plan to cover the costs.
• Insurance options: Long-term care insurance can help protect you financially in case you need care.
• Viatical settlements: In some cases, you may be able to sell your life insurance policy for a lump sum to cover long-term care expenses.

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Transcript

Robin: Welcome to Informed Aging, a podcast about health, Help and hard decisions for older adults. I'm Robin Rountree, a former family caregiver. I worked in the home care industry and now I work for the Alzheimer's and Dementia Resource Center.
With me is my co host. 
Hi, thank you for joining us today. I'm Edith Gendron, executive director of Alzheimer's and Dementia Resource Center. I have 40 years of working with adults. primarily with seniors and elders in need. I'm a certified positive approach to care trainer and consultant, and ADRC is a designated positive approach to care agency.
Robin: The thoughts and opinions expressed belong to Edith and I, not our wonderful employers and sponsors. The podcast is a service of the Alzheimer's and Dementia Resource Center. We are not affiliated with the Alzheimer's Association.
Before making any significant changes in your life or your person's life, please consult your own experts. Today, [00:01:00] our guest is Daniel Zagata, managing partner of Evershore Financial Group. He believes that all people deserve dedicated, specific, unique, and judgment free advice to help enhance their journey in life.
We're going to talk with him about long term planning. We'll be back right after this. 
Robin Rountree: Senior Helpers is the only home care agency offering a revolutionary new way to approach senior care, the Life Profile Assessment. This database app is a crucial tool in helping seniors age safely and successfully at home. Combined with our proven in home care programs and trained caregivers, Senior Helpers Life Profile is leading the way to better outcomes for seniors.
For more information, log on to SeniorHelpers. com slash Orlando.
Robin: For over 37 years, the Alzheimer's and Dementia Resource Center, ADRC, has served as a Central Florida based [00:02:00] grassroots non profit and community resource center. They are dedicated to providing support and hope for families and individuals caring for someone they love who is living with Alzheimer's disease or other dementia related illnesses.
ADRC empowers caregivers with the knowledge, support, skills, and strategies they need to help them confidently prepare for the challenges that lie ahead. To learn more, visit the website ADRCCares. org.
Robin Rountree: And we're back. And today we're talking about long term care insurance with Daniel Zagata. Now, you've got a bunch of letters after your name. Uh, CLU 
Daniel Zagata: certified, , life Underwriter. Okay. CHFC. Chartered Financial Consultant. CFP, certified Financial Planner. A IF Accredited Investment. Fiduciary. 
Robin Rountree: All right.
You worked hard for all of those, so I, I think you should tell people what you've got. 
, so Daniel, you work at Ever Shore, correct? Yes. You're a managing partner there, correct? [00:03:00] So you talk about money a lot. Yes. And usually people are a little older when they come talk to you, I'm guessing.
Usually, yeah. Okay. 
Edith Gendron: They shouldn't be, though. I have to jump in and say that the smart people, if you're listening, you need to go see Daniel when you're 30 and get ready. I'm serious. Yeah. I'm serious. Don't do what I did. 
Daniel Zagata: Yeah, I think it's usually the first trigger is people start to see their parents.
Prepare for retirement or enter into retirement and it's the first, uh, I want to be different conversation they have. 
Robin Rountree: Nice. Nice. Especially if mom and dad are like, um, honey, here's the nursing home bill. They'd like for you to cover this. 
Edith Gendron: Or, or, um, how's the back room looking? 
Daniel Zagata: Which newsflash. Children do not want their parents to move in with them as much as they pretend that they say you can come live with me whenever, that's not realistic.
Edith Gendron: Parents don't want to live with their children. They do not. 
Daniel Zagata: They do not. 
Robin Rountree: No. So we get older, we age, [00:04:00] and I think a lot of us just put blinders on as to what is going to happen or think, okay, I'll get hit by a bus or I'll just die in my sleep. Um, we don't want that for anybody, but I guess if you gotta go, then you gotta go.
But they haven't planned. Everything that happens up to that point and how they're going to pay for it. So there's an assumption that Medicare will pay for your in home care or for your assisted living facility. 
Daniel Zagata: Right. And the subject of long term care planning, I think is very important and I want to make a distinction because you mentioned long term care insurance.
It's not about insurance. You have to have a plan. Now, if your plan entails insurance, good for you. Nobody is going to go from, well, let me rephrase that. Very few people will be perfectly healthy. Mm hmm. And then just get hit by a bus the next day, like you said. Right. So you're going to have a period of time where you're going to have expenses and [00:05:00] care needs, which might be a week, a month, or in the case of certain, , dementia diagnoses could be years and years.
And no, Medicare does not pay for it. I always tell people you need to review the federal Medicare guidebook on three specific pages in bolded letters. It says we do not pay for custodial long term care. And that's very, very important to understand that. 
Robin Rountree: So custodial long term care, you're thinking, I'm sick, I'm going to go, not to the hospital, not quite the hospital, and Medicare will pay for it, and they will not.
Daniel Zagata: Correct. And, you know, I think the definition of what is custodial care. So very simply, I mean, that's help with, you know, Activities of daily living. So that's your eating, bathing, dressing, continents, uh, toileting, things like that. It's not that you are in a bed with tubes coming out of your head. Right.
And, and there's a big distinction where people go through a continuum of care, and that's changed significantly in the last two decades, where now [00:06:00] people spend a majority of time at home, get custodial care, and the nursing home is a final stage. Okay. Or, , if there's a cognitive impairment, you might have a memory care facility that's at that final stage.
So it's changed significantly how people. Need to kind of plan out those end years and let's just get it right out of the way The whole I will just push myself into a river. I'll jump off of the blah blah blah 
Robin Rountree: I mean that is some people's plans 
Daniel Zagata: Yeah It's except it's not because you know what when you're 99 years old and you can't do your own dishes and cook your own food And your 18 great grandchildren are coming over.
I don't think the plan is you're gonna jump off a cliff, right? So people have to grow up a little bit and understand that this is a part of planning that they need to do 
Robin Rountree: Yes. Could you just define what you mean by custodial care? 
Daniel Zagata: Yep. So custodial care is something that can be given by a home health care aide.
So it does not have to be a registered nurse. So those again are help with their activities of daily [00:07:00] living, eating, bathing, dressing, maintaining continence, toileting, and transferring, which is a fancy way for moving. moving around. 
Robin Rountree: Right. So if you need a little bit of help around the house, you're not ready for the old folks home.
Right. You can pay people to come in and do that. 
Daniel Zagata: Correct. 
Robin Rountree: Is it cheap? No. No. No, we know that. No. And, and Medicare doesn't pay for it. 
Daniel Zagata: Right. And , there's a, a little bit of a gray area where people say, well, I want to do Medicaid planning. So Medicaid is the system when you become destitute. So that's when you've spent down all your assets and you don't have any funds left and the government will step in.
But usually that is only in a nursing home facility. And also it's not usually the level of care that people want to plan for. So you sometimes it's ironic you have maybe like a wealthy person who then wants to plan to be in a. Medicaid facility or subpar level of care. And that does not make sense. 
Edith Gendron: All you have to do is visit one.
And [00:08:00] I'm not being funny. I'm serious. Early, early on in my career. That's one of the things I did was monitor or audit, if you will, the quality of care and Medicaid facilities. And it was heartbreaking. Someday when I feel like I'm revisiting tragedy, we'll have that conversation. um planning for Medicaid.
It's a choice. You should maybe have that discussion to make sure you understand what that means in the state you're living in, but should that be your goal? Good grief. 
Daniel Zagata: And it's interesting because, you know, as you said, I deal with money. And I enjoy it because it's awkward and strange and everybody lies about it and everybody pretends like their uncle Bob the plumber told them to go buy cryptocurrency.
And it's just very interesting how everybody feels like they have to have the right answer. But I just, I don't understand. Why people will spend hours planning vacations to get upgraded cruise [00:09:00] rooms and hotel rooms. But then when it comes to your own level of care, because it's not something fancy and enjoyable, we compress it and we don't want to plan for it and it doesn't make sense.
It's going to happen. Right. Again, I don't know if it'll happen for two days, two years, or 20 years, but you want to plan to not be a burden on your children or grandchildren, but also to have the level of care you want. 
Edith Gendron: Yeah, the quality of life you want, right? Yeah. Daniel's the person that taught me, uh, what I say in almost every course.
, if that bus hits you today, you're The plan you've got in place right now, that's your plan. And boy, the lights come on. I'm not kidding. That sentence alone, the lights come on. 
Daniel Zagata: And unfortunately, usually the younger you are, , the more kind of, , blocked mentally you are to good planning. You should just think I got all the time in the world.
And the great thing about money and financial planning is it deals with math. And math doesn't care about your opinion or your [00:10:00] thoughts or your beliefs. It's just math. So we need time. We need compounding. We need planning for the math and the money to make sense of what you want it to do. 
Robin Rountree: So the math doesn't get its feelings hurt when I cuss when I pay bills.
Nope. Okay. Nope. I'm very glad to hear that. 
Edith Gendron: Are you ever too old? To plan? 
Daniel Zagata: Nope. You're never younger than you are today. So you need to plan no matter what. Now, again, you might be at a point where, because of your age, some of the planning tools aren't available to you anymore, but you still need a plan. You know, and we can conceptualize death.
So people pre play their funeral. They have their list of what they want to happen, things like that. They don't do the same thing for planning. Like you need to have a discussion with your children or your significant other. of what you want [00:11:00] and the type of care that you want when you get to a certain point.
And especially around the, the world of, cognitive impairments, there's a whole nother deep level of, of emotions and guilt and other things that factor into those decisions. So if you don't have the conversation. Early, it all gets placed on somebody's, you know, shoulders to, to make all those decisions and that's not good.
Right. 
Edith Gendron: We see that here, right? We have distraught children, adult children coming in and what are we going to do? And, you know, I'm working two jobs already and, you know, talk about Swedish death cleaning. 
Robin Rountree: Yeah. Yeah. So it's, , if you don't plan the crisis, the health crisis becomes possibly also a financial crisis and some drama in the family that could have been avoided with awkward and tough discussion, you kind of have to pull the bandaid off, you know, 
Daniel Zagata: and it's tough too, because we live in a world where.
Mom lives in Florida, , Child 1 lives in New York, Child 2 lives in [00:12:00] California. Mom gets sick. Child 1 in New York has more money but doesn't have time. Child in California has more time but doesn't have resources. Then you start to have family issues of who's paying for it, who's going to coordinate it, who's going to uproot their family.
Robin Rountree: Mm hmm. And 
Daniel Zagata: their jobs and their life to care for somebody else. Yes. And it's, it's really tough. 
Robin Rountree: Yeah. And if you haven't made a plan, then you're letting the opportunity come for your children to stop talking to each other and, and have that trauma. 
Daniel Zagata: And people panic. I mean, there is, again, when we talk about usually cognitive impairments, there is some lead up time to preparation, but there are things, I use this example all the time.
You know, you have a stroke in the middle of the night. You better execute your plan now, because there's no time to have a family powwow and think about what do we want to happen. It's you need to do it now. And people have to have that, that discussion ahead of time. 
Edith Gendron: Yeah. Yeah. Having somebody else make end of life [00:13:00] decisions or catastrophic illness decisions for you., That was a, that's a tough, tough thing to do. You know, I mean, I've got, I've got that nurse practitioner in my world and I did appoint her, but she knows I will, I will haunt her if she doesn't make the decisions I want. Right. I want. 
Robin Rountree: And that's why you've got to write it down because if you leave it up to, well, they know maybe they don't, maybe they were zoned out thinking about paying their bills when you were talking about your services.
Daniel Zagata: You know, in Florida specifically, so I've been doing this almost 25 years and 
Edith Gendron: he started at 10. 
Daniel Zagata: I did. I did. 
Edith Gendron: He was a sharp kid. Yeah. 
Daniel Zagata: Stay out of the sun. But you know, Terry Shivo. I mean, a Florida case, which everybody is very familiar with, and you talk about a battle between a family, a spouse and her parents to make an end of life decision for somebody, which if you, if you just read about that case, you know, the, the husband said, well, we had talked about this, we, we [00:14:00] knew what each other's plans were, but we never wrote it down.
You have to write things down. You can always change it. Writing something down is. Is one of the most significant like steps to taking action on any plan and now you've committed to it. It's on paper. You can change it, but it Makes it serious. It makes it real. 
Robin Rountree: Yeah. 
Daniel Zagata: So. 
Robin Rountree: I'm just thinking back to the heartbreak of that whole Terry Schiavo thing where the parents were saying, well, this balloon moves in the room and she's following the balloon with her eyes.
Edith Gendron: And you're starving my daughter to death. 
Robin Rountree: Yeah. Right? Yeah. That whole thing. But did I, do I want my life to be the big thing of my day is to follow a balloon around? No. Nope. That's not what I would want for my life. But unless you write that down. And 
Daniel Zagata: then you don't want to talk about money, but you take that person and you say, okay, the hospital says, well, we're done taking care of this person, but we can move them into your home.
And that's seven, eight, [00:15:00] 900 a day with a medical bed. And in that case, a registered nurse that has to be there all the time. I don't know a lot of people that can afford 350, 000 a year. Medical expenses on top of 
Robin Rountree: Yeah. 
Daniel Zagata: All the other things
Edith Gendron: okay. . Yeah. Yeah. No, I, I've listened to Daniel for a long time. Yeah.
Robin Rountree: Yeah. Do you keep like a box of jokes in your office? I have no 
Daniel Zagata: jokes. No. I, I, I, I've been nicknamed Dr. Doom, but I also believe in the Murphy's Law of Planning. Okay. And that is when you have a plan in place, nothing bad will happen to you. Oh. It's the people that don't do the plan that are always in a constant state of, um, dramatic.
Messy, stressful situations because when you're prepared for it, you see it coming. You know, I also make the joke, , pilots aren't really that smart because, and I can say that cause I'm a pilot too. So disrespect to any listeners that are pilots, but there's a reason they have a checklist for every single thing that happens because they thought about it ahead of time before it [00:16:00] happened.
When the engine catches on fire, nobody's looking at the other person saying, what do you want to do about it? They don't think. They pull out their written checklist and they say, this is the things we do in this order. And your life should be like that to a certain degree as well for, for tragedy, but also for positive things.
Hey, if we come into some extra money, let's take these trips, we'll save a little bit and we'll do this and do that. So. 
Robin Rountree: Yeah, my husband and I talk a lot about what we'll do when we finally win that lottery. . But you know, it's not so much until then, but until then, 
Edith Gendron: until then you gotta pay the mortgage.
Robin Rountree: Yeah, you do. You do. So we need to have our end of life wishes down.. Uh, smart to have your funeral or whatever prepaid. Um, but you need that plan to pay for what comes. And I was thinking my financial planner, you know, when we looked at things, it's like this amount of money a year. And I'm like, well, But I know it's going to be more toward the end of life.
So shouldn't you kind of balance that [00:17:00] 
Daniel Zagata: so a couple things first? It's interesting, but if you go if you google gen worth long term care They have a great calculator for every county in the country to show you average cost of care for in home care Assisted Living Care, Nursing Home Semi Private, and Nursing Home Private Rooms.
So you can look exactly, because a lot of people might say, you know, if something happens to me, I'm going to move from Orlando and I'm going to move up to North Carolina or Wisconsin. You say, okay, well the cost of care is different up there. So you can kind of plan that out. But then when you get your number and you say, okay, if I need care, it's going to cost 6, 000 a month on average.
Then I take people through the example and say, great, let's just pull it right now. Let's figure out where we were going to pull it. Let's do a fire drill. And you start saying, sometimes people say something like, well, I'm going to pull it from my IRA. Okay, great. That's a hundred percent taxable. So you need to pull 9, 000 to net 6, 000 for your expenses.
Robin Rountree: You're 
Daniel Zagata: like, Oh, I didn't think of that. I [00:18:00] said, okay. And then, so you really have to walk through that fire drill of where would I pull this from and where would I pull it from if I have to pull it for three years. Average length of long term care claim in the United States right now, I'm going to round up.
It's about 2. 8 years, but let's call it three. So three years of expense is pretty significant at six, seven, 8, 000 a month. And that is average. So, some places, New York, certain metropolitan areas, it's 12, 13,, 14 thousand dollars a month. Other rural places, it's much less. But you still have to plan for it.
Robin Rountree: Now there is such a thing as insurance for long term care.
Yes, there is. Something you believe in?
Daniel Zagata: I will say that I am a fairly, , decent believer in insurance in general. Okay. Um, with a disclaimer that we all hate it. Right. We all hate insurance until we need it. Yes. Okay? And the reason we dislike insurance is because you're paying something, you're paying a premium, but you're not getting anything from it.
[00:19:00] And to get something from it, something bad happens to you. So just the general aura around insurance is always negative. But that being said, you always want to mitigate your risks of what you're paying versus what you're not and what, what the costs are and things. Long term care insurance has been around for 35 years.
Okay. And back when it first came out, there was a lot of, , discontent with people saying, well, what if I didn't use it? I paid all this money into it and I got nothing out of it. I said, wow, you're right. So how much money did you get back from your car insurance company, your homeowner's insurance company, your health insurance company, and every other insurance company you own?
And people look at me and I say, see, you've already created a mental block because you want to have a reason to not like what's about to happen. But now today it's very different. There are many different types of insurance plans. Some have a return of premium. Some, if you don't use it, you get all the premium back.
Um, some premiums are less, some have a death benefit. So it's very customizable to what. You [00:20:00] want to accomplish, , but it depends on your age. Your health, your situation. And here's the best piece of advice I can give people is that one, you need to talk to a licensed planner to explore your options and always do it sooner than later.
It is based on your age. It is based on your health. So. I got a long term care policy when I was 23. 
Robin Rountree: Wow. That was 
Daniel Zagata: right around the time, uh, also Christopher Reeves fell off a horse and now became paralyzed. So it can happen to anyone. It's not old people insurance. I hate when people think it's age dependent.
It's not. It's just long term care, meaning you need assistance. But the younger you are, the less expensive it is. Ridiculously inexpensive. But what usually happens is, you know, you have somebody who might hit their late 70s, just get diagnosed with a medical illness, have a stroke, have something, and then all of a sudden we get a phone call, we'd like long term care insurance.
And the moment I get that phone call, I say, what [00:21:00] happened? And now you medically can't get it or it's too expensive.
Edith Gendron: You said something else and I'm not going to ask a very clear question. Give me 30 seconds here. There is something I heard about, in terms of paying for care. You didn't plan well. Right.
Um, you didn't expect to get sick, but you got sick. Maybe, maybe you develop Lewy body dementia and your family is not well off, la, la, la. But you have this nice insurance policy that you had the foresight to take out years and years ago. And it's life insurance. Yes. I'm sorry. Life insurance policy. It'll pay a big premium when you're gone.
There is a service out there, if you will, out there that says, I'll buy that from you now and you can use that money for your care. What do you think of 
Daniel Zagata: that? So, um, like everything, uh, it's gotta be appropriate for the person. So you want to talk to a licensed professional before you make that [00:22:00] decision. But there's two ways to access that.
And that's a good point. So first one, which is pretty generic, which is an accelerated death benefit. Most companies have this free of charge on life insurance. And that is where, , if you are within 24 to 36 months of passing away, , they will accelerate and pay you your death benefit in advance. So you can use that for health care.
Wow. 
Robin Rountree: Okay. 
Daniel Zagata: What you're talking about is a viatical settlement. So when you viaticate a life insurance policy, you basically go out onto the free market and there's companies that do this and say, okay, well you, you have a, X lifespan left, your death benefit is blank. So we'll give you, we'll buy your policy.
We become the beneficiary, but we'll give you an advance on your death benefit now. Not the whole amount, I would think. Sometimes it's the whole amount. Really? The entire thing. But, but there's a, an offset. So for example, and these are just super generic numbers I'm making up. If you were 80 years old and you had, 
a level of dementia that's, let's call it [00:23:00] moderate. Okay? Okay. And you had a million dollar life insurance policy. A viatical company might look at it and say, okay, well you're 80, moderate, , dementia, so we think your lifespans six years, we've gotta pay the premium. Yada yada, okay, we'll give you $600,000 to buy your 1 million policy.
Now if you die the next day, you still only got 600. 
Robin Rountree: Right? 
Daniel Zagata: But if you live 15 years. You got your 600 up front and they got stuck with only a million dollars in the time value of money. So, , it is medically underwritten in reverse. Most insurance you take, they want you to be healthy. This is medically underwritten to be unhealthy to give you a higher offer.
, but you got to be careful about it. I think that's the best thing to, to advise people. You want to be with a licensed person that can guide you through that process. Right. 
Edith Gendron: Okay. Thank you. I kind of understood it before, but I understand it now. 
Robin Rountree: Yeah. Yeah. And you know, if you don't have options, then that's going to be something you look at.
Edith Gendron: I mean, if doing that prevents your children from going into hock or whatever. [00:24:00] 
Daniel Zagata: Right. 
Robin Rountree: Right. 
Daniel Zagata: Yeah. Something I, I do want to say, cause you just said a very important word. The most valuable thing that we as planners provide to clients are options, and the longer you wait to plan, the fewer options that are on the table.
But when you have options in life, whether you want to, Relocate, change jobs, you have a medical issue, you get married, you get divorced, all these things. When options are on the table, you can always be flexible with your life and your plan. When you have no options, and that is the world of Medicaid planning or, or not planning, you get backed into a corner, it's horrible.
Right. Because you just feel helpless. At that point. 
Robin Rountree: Right. Because you're not in charge of your decisions. Correct. Mm. 
Edith Gendron: Well, yeah. You feel forced by circumstances and that, as we know, uh, impacts the ability of your brain to function properly, your health. Yeah. That's not, that's not jokey stuff. No. That's scary stuff.[00:25:00] 
All right. Daniel, how can people get help from you? 
Daniel Zagata: they can always contact our office. Contact me. Number to contact us is 321 304 4009. we're real easy to work with. You can have a phone conversation with me. We can jump on a zoom. We can meet. , we're good people to work with and we've been heavily embedded in this community.
And by the community, I mean, The planning community, helping people plan for the future and not just thinking everything will be rosy and sunshine, but we got to plan sometimes for the bad stuff too. 
Edith Gendron: Yeah, it does rain sometimes. Does somebody have to live in Florida to get help from you? 
Daniel Zagata: They do not. Nope.
So, we're an independent financial firm. What that means is, we are not beholden to any company or product or anything like that. We do true consulting and fiduciary planning and we're licensed in basically every state, so we can work everywhere. 
Robin Rountree: All right. So, the name of the company is Evershore.
Daniel Zagata: Evershore Financial Group. 
Robin Rountree: Okay. Yep. And Evershore. com is the website. That's it. We will put that in the comments so you can find it later. 
Daniel Zagata: Awesome. 
Robin Rountree: [00:26:00] Thank you so much for being here, Daniel. Thanks for 
Daniel Zagata: having me. Thank you.
Robin: Please subscribe to our podcast, Informed Aging. Tell your family and friends about us as well. If you'd like to support the work that we do at the Alzheimer's and Dementia Resource Center, please go to adrccares. org slash donate.
You can find us on Facebook at facebook. com slash informed aging. Today's episode was recorded at ADRC's podcast studio, and That's all for now. We're looking forward to our next visit.