Long-term care planning is often seen as something only for the elderly. The kind of task adult children need to take on as their parents slow down and begin to miss a few steps. The truth is, while long-term care planning is often most used in advanced age, everyone can benefit from having a comprehensive long-term care plan in place long before they ever expect to use one.

“By failing to prepare, you are preparing to fail.” – Benjamin Franklin

What is a Long-Term Care Plan?

Simply put, a long-term care plan is part of a comprehensive estate planning strategy that provides a road-map for known or anticipated health, financial, and personal support needs from life changing injury, medical challenges, or aging. A good long-term care plan serves as the strategic plan for when a person can no longer perform everyday activities on their own.

Taking Control of Your Future

Thinking and talking about aging, or the risk of catastrophic injury or illness, can be emotional and stressful. No one wants to think about a world in which they or their loved ones are no longer around and able to enjoy life. However, while discussing long-term care planning may at first feel overwhelming or uncomfortable, having a plan in place leaves everyone feeling financially and emotionally secure, especially if the time comes when that plan is needed. You cannot predict what the future will hold, but you can minimize the potential negative impacts.

Types of Long-term Care.

There are three types of long-term care scenarios.

1. Home-based – provided at home by informal caregivers (friends, family, neighbors) who manage personal care (dressing, bathing, medication, general supervision) with the possible assistance of formal caregivers (nurses, home health aids, therapists).
2. Community Care – provided in the person’s community such as adult day care and senior centers. The person still resides at home, but will leave the home during the day for some of the caregiving functions.
3. Residential Facilities – assisted living or nursing homes. These facilities vary in the level of care they provide with the lower end offering only housing and housekeeping and the high end being full care establishments. Some facilities offer specialized care options to meet the needs of specific medical care, such as facilities that specialize in dementia.

No matter which kind of long-term care setting you opt for, you will need a way to ensure your wishes are carried out if you are no longer in a position to make long-term decisions, day-to-day decisions, or both. Living Wills, Health Care Power of Attorney, Financial Power of Attorney, HIPAA Authorization, and Revocable Living Trusts are just some of the estate planning tools that can protect you and your family.

Paying for Long-term Care

Cost is one of the biggest factors when it comes to long-term care. According to Fidelity, long-term care can cost $127,750 annual just for a private room in a care facility. This number is for housing alone and does not include medical costs. With Health and Human Services predicting that 22 percent of adults will need long-term care for more than five years, the cost of long-term care can quickly eat through the life that you built. Financing for long-term care can come from personal finances (savings, pensions, retirement funds, investments, and home sale), government programs (Medicare or Medicaid), or private finances (long-term care insurance, reverse mortgages, life insurance policies, annuities, and trusts). This is where a comprehensive estate plan can save your legacy. Using the proper tools, your estate can be structured to not only grow while you are living, but be insulated from creditors, including Medicaid.

Estate attorneys will use legal devices such as a life estate to allow a person to protect their home from the cost of a nursing home. Another common option is the use of an irrevocable trust. In an irrevocable trust assets are transferred over to the trust to be managed by a trustee for your benefit. Homes, business, investments, and other assets can all be safeguarded from the costs of long-term care by placing them in a trust. Trust can sometimes have the reputation as being only for the kind of people with generational wealth. However, a trust is an excellent way for anyone, no matter their income bracket, to protect themselves from the costs of care.

When is the Right Time to Put a Long-Term Care Plan in Place?

Now. No matter how young you are or how excellent your health is. You never know when injury or illness will strike. There are time restrictions in place on protecting your assets from the costs associated with long-term care. Waiting until care is needed often means you are left legally unable to protect certain assets.

The process of estate planning can be complex. It’s critical to have the guidance of an experienced attorney who can help you create a comprehensive plan tailored to your loved one’s needs. Offering trusted counsel and skillful representation for more than 100 years, we work with clients for a wide range of estate planning matters. Contact Middleton Law Offices today at 419.548.0196 for a consultation to learn how we can help.

Articles appearing in this column are intended to provide broad, general information about the law. This article is not intended to be legal advice. Before applying this information to a specific legal problem, readers are urged to seek advice from a licensed attorney.