Work with an estate planning attorney to determine the best long-term care decisions for your family.
So many of us are failing to plan ahead for the inevitability of death and decline. I can understand and sympathize, but many of us are missing the chance to make our futures more secure with long-term insurance or estate planning.
Who Needs Long-Term Care & What Does It Cost?
Let’s define the problem: Someone turning 65 today has almost a 70% chance of needing some type of long-term care services and support in their remaining years. Over 40 percent of the general population will need eventually to stay in a nursing home.
The average daily private room rate in a nursing home (in the Nashville area and in 2022) is $97,747 annually. For a semi-private room, the cost is $89,852 annually. Assisted living costs $50,676 annually. Some of those in assisted living will “graduate” to nursing home care.
Care at home is also expensive. Home health aides or companion homemakers cost $58,916 annually. But that is only 45 hours of care a week.
Very few people are really wealthy enough to be “self-insured” for this sort of financial crisis. Accordingly, we all need to be considering how we would pay for care if we needed it.
Long-Term Care Insurance
One option is long-term care insurance. I’m no expert in this type of insurance, but I do recommend that everyone at least consider it and not rule it out without gathering information. Here is a helpful resource from tn.gov.
The first important question for long-term care insurance is whether you can still qualify. If you wait until you have a serious health condition, or even if you just wait until you are too old, you might not qualify.
If you can qualify, then investigate all the options and talk with experts in the field. If possible, talk with at least two people so you make sure you understand the full range of options.
Picking the Right Long-Term Care Insurance
There are a lot of variables at play in selecting this type of insurance. You want to make sure you buy insurance from a reputable and solid company. Too many companies underestimated the risk in the past and have either raised premiums dramatically or gone out of business altogether.
Then you need to decide how much insurance you want to buy:
– What will the policy pay, and for how long?
– How long will you have to wait before the policy starts paying?
– Do you want to combine long-term care insurance with a type of life insurance?
There are many questions that only you can answer.
Estate Planning with Elder Law of Nashville
In addition to long-term care insurance, there is a way to structure your assets with an irrevocable trust that can help you shelter assets and still qualify for Medicaid. Again, there are many questions to be answered. This time, instead of an expert in long-term care insurance, you need an expert in elder law and estate planning.
You need to be relatively healthy and younger to consider this type of planning. Medicaid has a 60-month (5-year) “look back” period. If you transfer assets to an irrevocable trust less than 5 years before you need to apply for Medicaid, you could be penalized.
For those who want to achieve more peace of mind, however, these are both good alternatives that need to be considered. Denial is not a strategy–many of us are going to need help as we age.