We’ve spoken before on this blog about the importance of long-term care insurance as an adjunct to estate planning. As we noted before, most of us will require long-term care at some point in our lives. So, given that long-term care planning is an important task for all of us, especially for those in retirement, what types of strategies are we talking about in long-term care planning?
Long-term care insurance, as some readers may know, has been a popular option for funding long-term care planning over the years. The specific terms of long-term policies vary, but the basic goal is to reimburse the policyholder for long-term care services up to a pre-selected daily limit. Because long-term care insurance can be rather expensive, though, it is important to consider alternatives.
Unfortunately, alternatives to long-term care insurance are rather sparse. On the self-help side of the alternatives, there are insurance policies and annuities with long-term care riders. For those who can’t afford these options–and many cannot–the next best option is to make use of government funding, particularly through Medicaid.
Medicaid planning, sometimes considered a specialty all its own, is important because of the fact that eligibility depends on meeting certain financial requirements. Without planning in advance how to protect one’s assets, those who end up needing long-term care usually end up draining their estate in order to pay for care, until they qualify for Medicaid. With a bit of planning, though, one can keep important assets within the family. To be effective, though, Medicaid planning must be done early rather than when it becomes clear that long-term care is needed. Working with an experienced attorney throughout the process ensures that one will avoid making mistakes in protecting assets.
Bankrate.com, “Alternatives to long-term care insurance,” Jay MacDonald, Accessed Feb, 6, 2015.
U.S. Department of Health and Human Services, “Medicare, Medicaid & More,” Accessed Feb. 6, 2015.