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Tips for properly planning for long-term care needs

On Behalf of | Aug 29, 2023 | Estate Planning |

When it comes to estate planning, a lot of the focus is on asset distribution. While this is certainly a key part of the estate planning process, it’s not the only critical issue that you’ll want to address in your plan. There are a whole host of other issues that if left unresolved could put you at risk, and in turn leave your estate susceptible to additional costs. As a result, you could be left without the protection that you need, and your loved ones might be at risk of losing out on the inheritance you intended for them to receive.

Your need for long-term care planning

One way your estate’s assets can be quickly eaten away is through long-term care costs. Without adequately planning, these expenses can quickly rack up into the tens, perhaps even hundreds of thousands of dollars per year. And the potential that you’ll need long-term care at some point in your life is significant, with some studies showing that 70% of individuals aged 65 and older will need long-term care at one time or another.

So, what can you do to protect your well-being and your estate when the need for long-term care arises? Here are some tips that we hope you’ll find useful:

  • Plan early: Given the expenses associated with long-term care, the earlier you can plan the better. Start thinking about what kind of long-term care you’ll want if the need arises and get a grasp on what the costs of that care will look like. This will give you a strong starting point as you embark on the estate planning process.
  • Consider long-term care insurance: One of these policies can give you a significant amount of protection and peace of mind. But before purchasing one of them, you’ll want to understand their limitations. After all, in many instances, the insurance company won’t start paying your care costs until you can demonstrate that you’re unable to complete certain daily activities.
  • Seek Medicaid eligibility: Government programs like Medicaid can help cover a large portion of your long-term care expenses. However, before it’ll do so, you’ll have to meet certain eligibility criteria. This includes those pertaining to asset and income limitations. Even if you’re above the thresholds, though, you might be able to engage in effective estate planning to reduce your assets and thereby render yourself eligible, which could be achieved through exempt property transfers or the creation of an irrevocable trust. The latter will protect your estate’s assets from creditors and start the Medicaid lookback period.
  • Talk to your loved ones about your plan: Bringing your loved ones into your planning can be crucial, as it can reduce confusion and give you peace of mind knowing that everyone understands the role that they’ll play in your long-term care. This may include everything from payment of bills to taking care of your beloved pet.

There’s obviously a lot that goes into the creation of an effective long-term care plan. And given that Medicaid will assess your financial situation in the years leading up to your request for eligibility, you need to start planning now.

Are you ready to take the next step?

If so, then consider researching long-term care more in-depth, as well as gaining an understanding of key estate planning tools that are at your disposal. By doing so, you’ll hopefully be better positioned to build the estate plan that you need to protect your interests. Perhaps then you’ll be able to rest easy knowing that you’ve done what you can to ensure that your needs will be met in the worst-case scenario.