When Should Long-Term Care Planning Begin? (Published 09-2019)
Have you received the dreaded call in the middle of the night that your parent fell and broke their hip or shoulder? Did it trigger a stressful discussion with your loved ones about moving out of the family home and into an assisted living facility? Are you waiting until this happens, or have you thought about planning for it? The time to plan is now.
These are the kinds of questions that millions of adults, who find themselves sandwiched between responsibilities for their parents and children, are struggling to figure out. Is medical care for your parents needed at home, in assisted living facilities, or in nursing homes? What about their own care? How will it get paid?
When we think of estate planning, we likely think about executing a will or creating a trust to protect our estate and take care of our family members after we pass away. Yet, it’s equally important to ensure that loved ones are properly cared for as they age, and that long-term planning has been addressed.
Long term care expenses can quickly deplete an estate. Hard-earned assets and property can end up going to a nursing home instead of to beneficiaries. The good news is that choosing the right long-term care options can help protect your estate, and make sure that you and your loved ones have the care you need.
Long-term Care Insurance
This is a type of insurance policy that provides coverage for the costs of long-term care should you need it in the future. The premiums can be costly, and there are many different options for coverage. It is important to carefully review these options, ideally in your younger years, since premiums can increase significantly as you get older. In recent years new products have come on the market that combine guaranteed payout of life insurance with the flexibility of life time benefits should you need in-home or nursing home care. Your should discuss all of these options with a financial advisor.
Once you decide on a policy, make sure to let your estate planning attorney know.
Asset Protection and Benefits Planning
Both state and federal governments provide options for public benefits to help cover the costs of necessary medical care for older adults or adults with special needs. The downside is that you cannot qualify for such benefits if you have too many assets or property.
In certain cases, you may be able to use public benefits to cover long-term care costs without jeopardizing your entire estate. A plan for long-term care and asset protection may involve:
- Creating irrevocable trusts
- Medicaid planning
- Veteran’s benefits planning
- Planning for the needs of a well spouse
- Medicaid asset recovery
Find the Long-Term Care Plan that Works for You
Discussing your options for asset protection and preservation with an experienced elder law and estate planning attorney, might be the difference between preservation of wealth and depletion of assets. Planning for long term care can protect your hard-earned wealth, give you peace of mind, and take care of the people you love.
Often when attorneys or financial advisors create a long-term care plan, they focus on the assets and how to protect them for your future care, but don’t discuss how you actually want to be taken care of when the time comes. Make sure that your attorney spends time discussing your long-term care goals and plans and actually includes them in the legal documents that make up your plan. It is not uncommon for long-term care and asset protection plans to assume that your loved ones and care givers know your wishes, and provide little direction to them. Most standard forms focus only on how to protect your assets and not on how to spend them properly when the time comes to use them.
Matthew V. Piwowar is a Grand Rapids estate planning attorney. Mr. Piwowar is a member of the State Bar of Michigan, and the State Bar Probate & Estate Planning Section, the National Network of Estate Planning Attorneys, and the Michigan Forum of Estate Planners.