Frank Samson: Welcome to Boomers Today. I'm your host, Frank Samson and of course each week we bring you important, useful information on issues facing baby boomers, their parents and other loved ones. Today we have with us Cathy Sikorski, who is an elder lawyer and caregiver promoting financial and legal preparation in the aging crisis. Her first book, Showering with Nana, Confessions Of A Serial Caregiver, and Cathy's number one Amazon book, Who Moved My Teeth, is a practical and legal guide for the aging crisis. She has been on Huffington Post, AARP, and is a SheSource expert for the Women's Media Center. Cathy, thank you so much for joining us on Boomers Today. I really appreciate it.
Cathy Sikorski: Thanks for having me. I'm so happy to be here with my people.
Frank: Yeah, my people too. Many of us fall into that category. I do want to talk a little bit about your books in a little bit and share with people how they can order that. But I know you and I had a few minutes to be able to talk to each other beforehand and we were talking about the maybe vulnerability that women have with various long-term care issues. And so tell us why has the way we save money now set up women for a disastrous financial future?
Cathy: That is such a good question. And often people don't even know it's going to happen until they get into a crisis situation. And when I talk about a crisis situation, I mean a long-term care crisis. Somebody gets sick, they have to deal with not only the sickness, but the financial impact of that. And all of a sudden the way we save money has changed everything. And I know that sounds crazy, right? But this is the deal. Your parents, my parents, the grandparents, they saved everything in joint savings accounts, CDs, checking accounts, even maybe some joint investment accounts, right? Several years ago, all of that changed. We started doing 401ks IRAs 403Bs. And the difference is none of those types of savings avenues can be owned by anybody but one person. So only one person can own a 401k. So let's say Bill and Marge are in their 60s, are enjoying a wonderful retirement. Bill has a $2 million IRA or 401k. That 401k probably from work. Marge doesn't have anything because she typically stepped out of the workforce.
She may have never gone back or she went back as a part timer or just for several years, but not enough to certainly meet what Bill has. And he has a major stroke and now he's in a nursing home and he's never coming out. And Marge says, wait a minute, that $2 million is our money to live on for the rest of my life. I'm 62 years old. What am I supposed to do? And the question is, how does she get her hands on that money? Because legally Bill owns that money, not Marge. So there's a lot of problems around that. Number one, the biggest problem is does she have a power of attorney that allows her to go in and access that money.
Frank: Yeah. And talk to us about power of attorney. I'm going to give you my personal opinion of the name. I think it's lousy, I think it's a horrible name. It's a horrible name. But I'd like you to talk about that because it's so important because again, the term power of attorney, and I think obviously we agree with one another on that, it scares people. Going, "Oh, I got to go get an attorney. I've got go," well she should have an attorney anyway, but it's like this is going to cost me a fortune. So people shy away from it, but tell everybody about a power of attorney and how important it is. My opinion, if you're 18 years or older, you should have one.
Cathy: Did you read that I wrote that a million times? I totally agree. 18 years or older, you should have one because you're an adult. So here's the 30-second definition. A power of attorney is a document that you sign, giving your agent, they call this person your agent, the power to act as if they are you in every possible circumstance. So in a financial power of attorney, you're giving them the authority to do everything financial that you could do, sell things, buy things, use your credit card, get rid of your car, sell your house, buy a house. I mean, it is a very powerful tool. It is the same in a healthcare power of attorney. And some States call it a proxy, but it's the same thing, where you're giving someone the authority to act as if they are you in a situation where all your healthcare decisions need to be made. So not only is it an extremely powerful tool, so you have to choose wisely, choose wisely.
But the second thing that I find daunting is many married couples have each other as their agent, which is great. Hopefully you trust your spouse enough that you do that, but they forget to add an alternate and I don't know about you, but my husband and I travel all the time together. You know? I mean it's very possible that something bad could happen to both of us at the same time. You've got to have an alternate in there who can pick up the slack even if it's just temporary, to take care of your affairs. And as you said, which I love and which I is why I made my children when they went to college sign powers of attorney before they left, everybody 18 or older should have one. Because nobody knows when something might happen.
Frank: And you mentioned something I think is so important. I think married couples assume that they don't need one because their spouse would make those decisions. And that's not correct. That's a false assumption.
Cathy: Not only is it a false assumption, but let's circle back to how we started this conversation, which is if you have a 401k, and you are incompetent and completely disabled, your spouse has no authority to go in there and get that money by virtue of being a spouse. You have no authority. Nobody cares if you're a spouse. I would say, and I'm sure you've seen this, in the medical field, they are a little bit more flexible. If you went to the hospital with your spouse in emergency in your life, that's my husband. I'll make decisions for him. They're not going to stop everything and say, "Oh, excuse me, can I see your power of attorney?" You're probably going to get away with a little bit more.
You're never going to walk into a bank or Merrill Lynch or Vanguard and say, give me $1 million because my husband might have to go into a nursing home and I want to move some money to protect myself. No way. You've got to have that power of attorney. And so again, it circles back to that place where, especially women, who are almost always in a different financial place than their husband. They are not on equal footing.
Frank: So how do we help these women prepare for staying financially secure? Especially if the spouse has these investments. Assuming that.
Cathy: So now that you know this, if you're healthy, you've got to start looking at ways to put yourself on equal footing if you can financially. If you're in your 40s and 50s and you are still a stay-at-home mom or you're taking care of your mother or your mother-in-law, you can start saving money in your own IRA, hopefully. That's one way to do it. Another way to do it is to just A, be aware of this. And B, make sure you have a document, a power of attorney, a durable financial power of attorney that allows you to go into your spouse's financial setup and have access to that money. I live in Pennsylvania where we are particularly strict with this rule. So if that document doesn't say that I as an agent have unlimited gifting power to gift that money to me or anybody else, depending on what it says, I won't be able to go in there and get either any money, or more than $15,000 a year.
Frank: What happens to that money if the proper legal documents have not been set up?
Cathy: Going back to my example, that money has to be used for Bill, who's in the nursing home. And my authority then will come from the court. I have to get a guardianship. Another reason why you want this power of attorney, because who wants to go to court and get a guardianship? You need testimony that I have a doctor say that he's incompetent. You have to have the court choose you, which they probably will, but then you are at the behest of the court, that you must report to them at least on an annual basis. Every penny you spend on this person and every medical decision that you make. And it's your spouse.
Frank: Gotcha. Yeah. So, and I know this could open up a whole other can of worms here, but are you saying that a trust necessary or not absolutely necessary to make sure that is all handled in the proper way.
Cathy: A trust has absolutely nothing to do with this. Nothing. You might need a trust, you might want a trust and it might make financial sense to have a trust, but it has nothing to do with the basic authority to access funds through someone who is incompetent. Okay. Now a trust could change that depending on how you've set up the trust and who the trustees are, but trusts aren't for everyone. And trusts are such super complex legal documents, especially now with the secure act and there's so much going on legally, that nobody should have a trust unless they've talked to a legal and financial professional together. Those documents can hurt you as well as help you. You've got to be really smart about what your family needs and that is such a personal thing to every family and what their needs are.
Frank: Let's say you made a quick mention of it, but maybe we could get into some more specifics here on this gifting. Explain that a little bit.
Cathy: I love that you asked me that. Know that when you signed a power of attorney, you are basically saying, my agent, in this case, your spouse, let's say for this sample or your daughter, let's say you're single. My agent has the authority to access all of my funds and I'm going to either give them no gifting power, which means they can't access funds for anything but me, only me. They can only pay my nursing home bills. They can only pay my hospital bill. They can only pay things for me, so they have no gifting power or I'm going to give them limited gifting power, which means they can access up to $15,000 a year for anybody I decide they can give to. It’s usually $15,000 because that's the federally exempt gift tax now. That's what they've determined limited gifting means, or I'm giving them unlimited gifting power, which means they can take all my money and do whatever they want with it, which could be scary.
You've got to choose that person. It makes it right for abuse. I'm not going to pretend that these documents aren't right for elder abuse, but in situations of trust and in situations of like, suppose you have a spouse who has early onset Alzheimer's, you need to have this in place. Or suppose you have a daughter who is taking care of you because you have a chronic disease and you want to pay her as a caregiver, you need to make sure that, because that could be seen as gifting because she's a relative and it probably wouldn't be.
Frank: Oh sure, sure. Yeah. It gets very complex. Yeah.
Cathy: It's crazy how complex it is, which is why you and I talked earlier about how I just think financial advisors and elder lawyers need to work together.
Frank: How do you advise people and get everybody to work together? It's almost like, we deal with situations all the time where the doctors don't talk to one another and we're always concerned about prescriptions being given out and not understanding that and trying to get doctors to talk together. But you have to do the same thing here. They need to work together. So what suggestions do you have?
Cathy: You know what? I really truly suggest two things. I suggest elder lawyers and financial advisors, for heavens’ sake open the door yourself, go meet these people. Talk to them. I really wish we had CEs, like continuing education. We're required to do that and so are CPAs in my state and probably CPAs across the country.
We need more joint meetings where we can talk about why these are joint things and why we should, as I say, be BFFs, best friends forever, but if you are from the client's point of view, I think you should say, "Look, I need you to talk to my lawyer. I need you to be on board with the same thing." I really wish, like I said, the professionals themselves would reach out and I'm hoping that they're learning this every day. That as a client, I think you have every right to say, if you're doing my legal work, I want you to talk to my financial guy, if you to do my financial work I want you to talk to my legal guy. I want to make sure everything is in place the way I think it's supposed to be. So you can both do your jobs if a crisis happens.
Frank: Got it. Okay. So now I want to talk about again, all these terms you cleared up. Power of attorney, but advance directives. All right. DNRs, POLST form. Help us understand all this.
Cathy: All right, so advance directive. I love to say when I do my speaking engagements, advance directives and living wills, another term you're going to hear very often. I just sent my mom to the hospital for a test yesterday. They said, do you have a living will? Advance directives and living wills are the identical same thing. I say it's like Sean Combs and P Diddy, same person with two different names.
Frank: I love that. Okay, got it.
Cathy: It is not a DNR. People get confused by this but it’s true, a DNR is not a living will. It is not the same thing at all. A DNR is almost always used only in a hospital or if you've had someone with a really chronic long-term illness and it means of course, do not resuscitate. It just means if you go into a cardiac failure or cardiac arrest or you can't breathe or whatever you're saying, don't put me on any machines, don't do anything, do not resuscitate me. If I go, then I go. That's much more of an emergency type document than the advance directive or living will. Because the living will, you can put in place now as a 20 year old and just say, if I get to be in a permanent vegetative state for some reason, and those in our age group remember Karen Ann Quinlan, don't we?
Frank: Oh yeah.
Cathy: Who was in a permanent vegetative state for like 20 years. She was very young. And they had no direction about what to do. That's not a DNR. A DNR is really almost always used in a hospital or in a chronic care issue. And again, it just means do not resuscitate. That's a choice that someone has.
Frank: Then what's the difference between a DNR and a POLST, which is a document available in several states.
Cathy: Yes. POLST stands for physician or provider orders for life-sustaining treatment. And in my state it's a hot pink color.
Frank: Same in California. Same thing.
Cathy: Okay. So it's hot, hot pink. And they say leave it with your papers or put it in your freezer or whatever. And it's meant to be a document that goes with you wherever you go. And so the emergency workers, first responders, if they have to come to you, see that you have that. The difference is number one, a DNR is not signed by a physician necessarily. It's just a choice that you have made within the hospital. You say the patient is DNR and they put it on the records. But a POLST must be signed by a physician and it is a decision and it might not say do not resuscitate, it might say resuscitate under all circumstances you can choose. You're not choosing necessarily to die. You're just choosing whatever your life sustaining treatment is that you want.
I want a respirator, I want pain meds, I want palliative care, whatever it is you're choosing. I don't know if you have personal struggles with it either, but the issue with a POLST form is that you're getting a doctor to sign something when you don't really know what's going to happen.
Frank: I've gotten different views on this so legally, and I can ask you legally, since you are an attorney. Legally if somebody calls 911, they have an issue going on and the person has a POLST form. Let's say they're even in an assisted living facility and right above their bed is this hot pink form. And they come out and what do they do if on that POLST form it says between the doctor and that patient, do not resuscitate, call it a day, whatever. What are they legally responsible to do? And does that vary state by state or what happens?
Cathy: That's a really interesting question because I want to go back to for just a second, the advance directive living will, right, which is the one that you filled out that said, if I'm in a permanent vegetative state, these are my choices. In my state that is not a legally binding document at all. It isn't. So in other words, if nobody pays attention to your choices, you can't sue anybody. That's what that means when we say not legally binding. Because that's really what we're talking about. What happens if they don't do what you want done or what happens if they follow through with what you want done and your family doesn't like it? Those are the two questions we're asking here, aren't they?
Frank: Right. Yeah. Because I know of situations where families were upset that their loved one was resuscitated.
They were brought back to life and that's not what the person wanted. So that's why I was curious. Because you know they have all these forms and DNRs but then what happens if they're in a hospital situation, of course they're going to know all that. What are these EMS people supposed to do?
Cathy: And I think they are legally protected to follow what the POLST says. You know what I'm saying? Because not only has the doctor signed it, but the patient had signed it. Or the patient's proxy or the patient's power of attorney. But it's signed by two people with authority to say what is done and that's always going to be the problem. What if we don't like what decision was made and that's why they put POLST. That's really why they put POLST in there was to protect first responders, what kinds of decisions can they make in these emergencies.
Frank: That's why putting it on hot pink paper, something that stands out. So Kathy, unfortunately, we're running out of time here and I have a bunch of other questions for you so we got to have you back. But with the time we have here, please tell us real quick, a little bit about your books, how people can get it, how people can get in touch with you. It's commercial time for you. Go ahead.
Cathy: Yeah. Okay. Here's my commercial. First of all, I'd love to come back. Secondly, everything you can find under my name. I'm one of those people. If you put my name in, it's going to show up. Cathy with a C. C-A-T-H-Y. Sikorski, S as in Sam, I-K-O-R-S-K-I. So that's my website, www.cathysikorski.com. If you type that in on Amazon, my books will come up. My blog will come up. If you put it in Google, and I'm back to blogging now because I have lots of time working from home and it's called, You Just Have to Laugh or Caregiving is Comedy. So my name will get you pretty much everywhere.
Frank: Great. And I'm sure, I know you're based in Pennsylvania. If people needed legal assistance from somebody like yourself, of course they could go to you directly, but did you have any recommendations on where they could go to find somebody of your type of a background and maybe where they are?
Cathy: Yep. And I highly, highly recommend elder lawyers. We're not the same as estate lawyers, which doesn't mean we're all not good, but we do this kind of work and elders lawyers are certified under CELA, C-E-L-A or NAELA, National Association of Elder Lawyers, N-A-E-L-A. And if you look under those two organizations, you can find a lawyer in your area. So that would be great.
Frank: Perfect. Cathy, thank you so much for joining us on Boomers Today. Really appreciate it.
Cathy: Thank you, Frank it was a good time. Thank you so much.
Frank: It was great. We'll have you back and thank you everybody for joining us on Boomers Today, today. Be safe out there. I'll talk to you all soon.