What’s the Deal with Long-Term Care?
In general when thinking about estate planning, people focus on what will happen to their property and money after they pass away. In reality, that misses one pretty significant consideration: the need to plan for long-term care.
The last thing any of us want to contend with when a health issue arises later in life is having to throw together a hasty estate planning solution in the face of mounting medical costs. Your best defense is careful planning with the help of a trusted attorney.
Why it’s so important to plan for long-term care
While only a small percentage of current U.S. residents will need to reside under long-term care for a period of over three years, that number sharply increases when factoring in nursing home stays of a shorter duration — which will still have a substantial impact on your estate.
Whether the care you need takes place in a nursing home, assisted living facility, or with an in-home provider, the costs can mount with alarming speed. For example, the average rate for assisted living in California costs approximately $4,774.00 per month. As those costs add up, you could see your assets dwindle much sooner than you’d hoped. Luckily, an estate planning attorney can help in a number of ways.
What We Will Discuss During Our Meeting
If long-term care isn’t factored into your estate plan, you are probably not looking at a truly realistic and accurate representation of your assets. During our discussions, we will take into consideration the following factors in order to get on the right track:
Set reasonable expectations for long-term care
It’s impossible to know what life will bring, but we can certainly make educated guesses. For example, are there any major diseases that run in your family? There is a chance you will have the good fortune of staying healthy well into your golden years, but estate planning is an aspect of your financial life in which it’s helpful to protect yourself against worst-case scenarios.
In the estimated likelihood that you will require such care, at what age could you reasonably predict you’ll need it? Do you have any current health conditions to take into account? Exploring these possibilities may not be the most enjoyable exercise, but it’s far better than facing the reality of long-term care with no plans in place.
Consider a long-term care insurance policy
As Medicare or standard health insurance may not cover your costs, a long-term care insurance policy is one way to protect yourself against draining your financial assets. We will discuss resources for finding an affordable premium that isn’t likely to increase prohibitively over time. Begin this process as soon as possible, as your premium will be lower the younger you are when you apply.
Another potential oversight is assuming your long-term care will be covered by Medicaid. We will need to determine your qualifications and get the specificities of your unique financial situation in terms of Medicaid benefits.
Get smart about living wills and trusts
In order to best prepare your loved ones for complex medical decisions, you will need to have an advanced healthcare directive. In addition, it may be right for your situation to have a revocable living trust, and possibly one or more irrevocable trusts, like a life insurance trust or a charitable remainder trust, as part of your long-term care planning.
It’s also important to create a plan that allows someone you trust to access and utilize your financial resources for your benefit in the event of unforeseen medical circumstances. One common mistake is tying up assets in investments that aren’t liquidatable when you might need them most. For example, money locked into annuities can result in a fee for early withdrawal. Working with a team of that includes an estate planning attorney, financial advisor, and insurance professional can provide you and your family with the best overall solution.
What to Do Next
Take the time now to schedule a FREE 30 MINUTE CONSULTATION about the best ways to maintain financial security in tandem with the demands of long-term care. Even if you don’t end up needing long-term care in your lifetime, you can enjoy the peace of mind knowing you’ll be covered.
The process of completing a long-term care plan may sound daunting, but I’m here to help you by making it a streamlined experience — simply get in touch today and let me put you in a more secure position for the future.
