Long-Term Care Planning

What Is Long-Term Care Planning?

Planning for future long-term care is a challenging task but one that can’t be put off indefinitely. Whether someone considers options years in advance, or they delay making plans for long-term care, the time will come when the decision will be unavoidable.

Given the high cost of long-term nursing home care and assisted living facilities, many people find that their plans for long-term care are dictated by their financial circumstances. While that is true for many families, there are still a wide range of long-term care options from which even those with limited means can chose.

Deciding What Long-Term Care Plan Is Right for You

Once you and your family decide to undertake the task of planning for your optimal long-term care, you may consider these basics as a starting point:

• Will you need it? (2022 statistics show 70% of seniors will need some type of long-term care)
• What level of care will you need?
• How long will you need each level of care?
• Is your home adaptable?
• Do you have family care options?
• What financial resources will you have for long-term care?
• What can you do now to improve your long-term care security?

When you think about these issues early in life, it is impossible to see into the future and predict the answer to many of those questions. However, as we age, sometimes what the future holds becomes more perceptible.

The onset of disease or an unexpected permanent disability will bring many answers to the questions listed above into much sharper focus. 

Self-Pay:  Self-financing long-term care, if possible, requires the most advance planning to set aside sufficient funds and investments to fund the continuing costs of either in-home care or the fees for a residential care facility.

Long-term Care Insurance Policies: Long-term insurance policies are available with varying amounts of coverage and different levels of premiums. These policies usually require a “qualifying period” during which no benefits are paid until after the insured demonstrates a period of disability and is assessed as eligible to receive the benefits. The policies often limit coverage for daily care costs as well as a lifetime policy cap. 

Depending on the level of care required by the insured, the expenses may exceed the value of the daily coverage, requiring the balance to be paid by the insured or their family.

Family In-Home Care: Economists and medical experts agree that physical and mental health is prolonged when a person can remain in their own home and receive care, and the cost of care is minimized. But as age advances and health or mobility deteriorates, in-home care tends to be less practical.

Another problem with planning for in-home healthcare is the financial, physical, and emotional toll the family caregiver experiences from the persistent responsibility. 

Medicaid: Without a private source of funds to pay the climbing costs of long-term residential nursing homes and assisted living facilities, or long-term care insurance, many people seek Medicaid coverage which will pay the entire cost of long-term residential care if you are eligible for Medicaid benefits.

Only people with assets and income below the Medicaid eligibility limits qualify for benefits. Unless a person has established a plan, they will be faced with the need to spend down their excess assets to pay for nursing home care until they have so few assets that they qualify for Medicaid. 

Planning for long-term care can enable you to preserve your financial assets for your family and remain eligible to have Medicaid pay for nursing home or other long-term nursing care.

Trusts: An experienced elder law attorney can counsel you on the creation of a type of trust into which your property and assets may be transferred that permits you to control how and when the assets are used and for what purpose. Because the assets are owned by the trust, Medicaid does not consider them to be available to you.

The law allows Medicaid to look back five years to determine if you have transferred funds to avoid holding assets when you applied for Medicaid coverage. Unless the trusts are created and funded before that time, Medicaid may impose a penalty period of ineligibility.

But if executed in time, trusts can be constructed to provide that the funds get distributed to your children or other loved ones following your death. Until then, the trust can benefit you and your spouse without jeopardizing your Medicaid eligibility.

Certified Elder Law Attorneys (CELA) specialize in these and other strategies to assist you in planning for long-term care in such a way that you retain control of as much of your wealth and property as possible while still receiving necessary, dignified long-term care.