The Critical Need for Long-term Care Planning

How can I include the cost of long-term care in my estate plan?

Californians are living longer these days and that longevity is good news for the most part. At the same time, with an aging population comes an array of age-related illnesses that require long-term care. Unfortunately, the costs for medical treatment whether at home, in an assisted living facility or a nursing home can be very high. Many elderly people and their loved ones mistakenly believe that Medicare will cover costs associated with long-term care. The fact is that this program only pays for services such as nursing home or rehabilitative care for a limited number of days. For this reason, it is essential to include long-term care in a comprehensive estate plan.

Paying the Cost of Long-Term Care

Depending on the circumstances, visiting nurse services can provide elders with long-term care in the home. It is more likely that an assisted living facility or a skilled nursing facility (or nursing home) will be the venue for care, and the cost is driven by the type of care being provided. For example, specialized care provided in memory centers for treating dementia patients can cost more than regular nursing homes. In any event, the cost of long-term care can easily drain someone’s assets. For those who are not able to self-fund these costs, there are other options.

Long-Term Care Insurance

One option, provided that you qualify, is to purchase long-term care insurance. This provides coverage for a variety of personal and custodial care services in the home, an assisted living facility or nursing home. Long-term care insurance can also reimburse you for daily living assistance such as bathing, dressing or eating. The cost of this coverage can be quite expensive, and the type of services covered varies greatly.

Medi-Cal

In the alternative, the joint federal-state Medi-Cal program pays for care primarily in skilled nursing facilities. This is a needs based program, however, and to qualify you must have less than $2,000 in liquid assets. There are ways to distribute your assets, such as by establishing trusts, that can enable you to qualify for this program.

 Veterans Aid and Attendance

The Aid and Attendance pension program, run by the Veteran’s Administration, offers benefits to qualified war veterans and their spouses who need assistance performing daily tasks or those in need of long-term care in an assisted living facility or nursing home.

The Takeaway

Many individuals will inevitably need long term care and the cost of an assisted living facility or nursing  home can be daunting. While there are options such as long-term care insurance and distributing assets into a properly designed trust, these matters can be difficult to navigate and require the assistance of an experienced estate planning attorney.