In this short video it is made very clear that I am not an attorney and that all the material presented on this page and in these videos is gathered from research and years of educating people about this important subject.
Tens of millions of Americans are estimated to require long-term care. As the Baby Boomer generation ages in the years to come, that number is only expected to increase.
According to Medicare.org, there are many reasons why seniors — or even younger people — might require long-term care, ranging from disability or disease to mental illness. Even sudden injuries or severe medical issues like heart attacks, strokes, or cancer could cause a person to lose their independence and require nearly constant care for the rest of their lifetime.
Here are some ways you can anticipate, plan for, and pay for long-term care, whether for yourself or someone else in your life.
Planning for Long-Term Care
As you begin to anticipate and plan for potential long-term care for yourself or a loved one, you can start by asking yourself a few questions.
What lifestyle choices are you making right now?
Be honest with yourself. Nobody is perfect, and we all have our vices. Most likely, there’s almost certainly something you could stop doing or cut back on to reduce your chances of one day needing long-term care.
How can you reduce the risk of injury or onset of illness?
For instance, a recent study showed that yoga empowers seniors by “preserving or enhancing physical function in older men and women.” This is promising news for aging individuals who are looking to maintain their independence and avoid long-term care!
Are there hereditary illnesses and conditions that could impact you?
We all have genetic susceptibility to develop certain conditions, and those types of conditions vary from person to person. Although many people associate nursing homes and long-term care facilities with conditions like Alzheimer’s and Parkinson’s disease, a recent study found that mental illness is more likely to place people in long-term care. Mental disorders made up nearly half of all admissions, while conditions like Parkinson’s represented only 15 percent.
Are there any home modifications you need to make?
Based on your answers to the above questions, some home modifications might be necessary. For instance, you might install special light bulbs that are known to prevent depression and boost mental health. You might also consider downsizing or moving into a home without stairs.
Paying for Long-Term Care
To help plan how you’ll pay for the high costs associated with long-term care, whether for yourself or a loved one, you can start by answering the following questions:
How close are you to retirement?
If you require long-term care earlier in life, it will become more expensive because the costs will eventually add up over the years. Later in life, you’ll be paying for fewer years, and you may qualify for special programs that can help offset the costs.
What savings plans or insurance programs are currently available?
Not all insurance plans cover long-term care, and health insurance rates generally increase once long-term care is required. That’s why it’s advantageous to look into Medicare and other options before you actually need care.
How do you plan on paying for the costs of long-term care?
It might be a good idea to have multiple financial streams to help you afford care for yourself or a loved one. Medicare and health insurance don’t cover everything, so start saving earlier and research your options. By getting long-term care insurance now, you can save money.
Another thing you can do to ease some of your family’s financial burden in a worst-case scenario is purchasing a pre-paid funeral plan. Pre-paying for your funeral can be easier than you think. For instance, you could designate a joint savings account towards saving up some money to cover funeral expenses. You could also purchase a prepaid insurance plan through a funeral home or a final expense insurance policy, the latter of which will also cover any end-of-life medical costs.
Long-term care and funerals might be difficult topics to approach right now. However, your efforts will make things easier for yourself and your family in the future.
Providing care to an elderly, sick or injured person is a life changing commitment. The medical and personal demands are constant and unwavering. The financial and physical impact adds to the strains and must be faced as each presents itself.
Planning ahead is possible to some degree within each of these areas. I’d like to share with you an area of preparation that can be done prior to needing care and available to everyone.
It is into the world of legal matters that most of us treadly lightly and with trepidation. We don’t want to make the wrong decision and we fear losing control. Both of these are valid. The cost and accompanying confusion often make it easier to simply procrastinate.
While these emotions are valid, shown by the statistic that close to two-thirds of adults have not done any planning, they are not a reason nor excuse to ignore a simple process that turns uncertainties into certainties, a plan that ultimately helps keep control in your hands.
The legal documents each of us need at a time of illness, accident or death, are a power of attorney for medical, a power of attorney for financial, a living will or medical directive and a Will or a Trust. Other documents may be suggested by your legal advisor.
The decision between a Will or a Trust is often based upon specific and unique needs and the size of a person’s estate. Each state has an estate threshold which is a good starting point. If a person has a home and a family, avoiding probate can be a good idea. A will is used in the probate process, the one you acquired or the one provided by the state, if you never got around to it. A trust helps a family avoid probate, if it’s set up and properly maintained.
Acquiring the right document (a will) or setting up the right entity (a trust) is the important first step. While we consider these options for our parents, having them completed for ourselves and our children is a wise idea. There is no magic age when we are free from accident, illness or death, and leaving a legal plan in place is a gift to all.
The second, and just as important part of this planning, along with the correct documents, is enlisting the services of an organization that can be with you along the way and your loved ones when the time comes to execute the plan. A service company, is the generic term for such an arrangement. More specifically, a Trust Service Company, since a trust is more of a living document that can be altered and changed by the people who set it up, as opposed to a will that sits in a drawer until someone passes.
A trust service company, should provide regular visits to assure that the estate and the trust are in synch, offering changes and updates as life changes and updates. Most importantly is the assistance that is provided to those we love, when it comes time to exercise the rights laid out by the documents.
There are a number of other benefits and drawbacks to each of these choices. There is also plenty to read, and much that can seem confusing. My suggestion is to do some research and then make a decision. Having done nothing is not the legacy you want to leave behind.
Lack of Record Keeping
Estate planning is partly about making things easier for your family to close out your estate following your death. However, many successor trustees / personal representatives end up spending a lot of time searching for information which was not properly organized. They need to inventory your estate or trust assets, so they need to know what you owned, so they can be certain the inventory is complete. They need to locate, liquidate, close and distribute every account, but first they have to identify them. If you are not organized, they may miss an asset, disrupting your distribution plan and complicating the process. A lack of organization will also increase the time, money and effort needed to close your estate.