At least seven out of ten Americans age 65 and over will need long-term care at some point. Most people simply underestimate the cost of long-term care, or they think that Medicaid will cover the costs. Your best defense against long-term care costs: advance planning with professional help.
The Memphis Daily News article, “Long-Term Care – Not for Everyone,” says that Medicare does little for these costs and only for a short time period. Medicaid doesn’t apply until the assets of an estate are spent down, so many people must pay for these costs out-of-pocket. The article says that there are two primary ways people address these expenses: with their investment/retirement portfolios and with long-term care insurance. Most people review the cost of long-term care insurance and elect to roll the dice, but when that first round of expenses hits, they probably will wish they’d bought it long ago. But at that point, it’s usually too late to buy it. If you can afford to self-insure, you can save your estate and yourself some serious money.
Long-term care insurance as part of your overall retirement plan is an option you should consider sooner if you don’t have other options to cover the expense. And if passing on an estate to your heirs is important to you, then shifting some of the risk to insurance makes sense. The best time to start looking at coverage is age 55. If you wait beyond that, you may see higher premiums and an increased possibility of being denied coverage.
Talking with a qualified estate planning attorney and insurance professional can help you discover a solution that works best for your individual situation.
Of course, active aging is great, but with age can come injury or illness, so you should look at your options. If you rely on family for long-term care, it can take a huge toll on the caregivers—both emotionally and physically—while your adult children also try to manage their own households. In fact, this “Sandwich Generation” simultaneously caring for aging parents and their children are bearing the brunt of caring for parents, sometimes at the expense of careers and caring for their children.
If you want to make at-home care your plan, make sure that all members of the family are on board before finalizing that decision. Discuss how your care may include outside sources of help, including a hired nurse aide or adult daycare. This is not an easy task for even the closest of families. Before making this decision, consider the short-term and long-term impact it may have on your loved ones and if they—and you—are being realistic about home care. Medicare may cover some of the expenses for at-home care, but it’s often difficult to get approval and there are certain criteria to meet in order to qualify. Take a look at our recent post on the subject for more information.
While we at Family Estate Planning Law Group do not sell insurance, we have always strongly believed in communicating early with your loved ones about your health care wishes and other estate planning topics. In fact, we encourage our clients to hold a Family Care Meeting where loved ones can hear directly from you about your estate plan and their roles. Our clients tell us that this meeting gives them peace of mind: they know their loved ones are prepared to deal with their estate and know their wishes.
For more information, explore our website and contact us to schedule your consultation today!
Reference: Memphis Daily News (July 29, 2016) “Long-Term Care – Not for Everyone”