When discussing estate planning with clients or potential clients, the meeting usually begins with questions about who will receive property, who will make medical and/or financial decisions upon incapacity, and how to minimize taxes and the costs of estate administration. Most individuals tend to shy away from discussing how to pay for long-term care or nursing home expenses as it is not easy to talk about the unpleasant thought of needing nursing home care. No one wants to go into a nursing home. I believe many families are sincere when they say they will not let mom or dad go into a nursing facility or they will care for them at home. Sometimes, however, it is just not safe for someone to remain at home and skilled nursing care is the only option.
Long-term care expenses can cost six figures annually in some states, and generally speaking are not covered by Medicare or your private health insurance policy. Although there are several strategies to protect your assets in the event you require long-term medical care, we will focus on two of the more common financial and legal strategies for this article.
Long-Term Care Insurance
Long-term care insurance policies should be considered as an option to pay for long-term care in the event care is needed. There are different options for coverage, so discussing your needs with a qualified insurance representative and elder law attorney is very important to ensure you are protected.
Irrevocable Trust
Asset protection using an irrevocable trust is another option to protecting your assets from estate recovery should you need long-term care. Because of the 5-year look-back period rules involving trusts, this type of planning must be done at least five years before the need for long-term care and the filing of a Medicaid/MassHealth application. A consultation with a qualified estate planning and elder law attorney is highly recommended if considering an irrevocable trust strategy.
As discussed above, we discussed only two strategies for purposes of this article. Each family’s situation should be discussed on a case-by-case basis to determine what strategies are appropriate. Many different factors such as health, family dynamic, assets/income, and whether we are working with a spousal couple or single/surviving spouse are a few examples of the factors we must evaluate to determine what options our families have. Please call our office to schedule a consultation to discuss what’s best for your family.
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