Long Term Care Planning & Resources

The average American underestimates the cost of in-home long-term care by almost 50 percent, according to a shocking study published by Genworth in 2016. Approximately 30 percent of Americans anticipate home health care expenses to be around $417 a month. However, the national median rate is about nine times that: $3,861 per month for an in-home aide or $3,813 per month for homemaker care (that’s hiring someone to handle household tasks such as cooking, cleaning and running errands), according to Forbes Magazine.

Be Prepared

As you can see, having a realistic, detailed plan to cover long term care is absolutely critical. Being prepared will allow you to protect your hard-earned money from the extremely high cost of long-term care. Having a plan in place could mean the difference between you staying in your home rather than moving to a nursing facility, or paying for top-notch treatment without wiping out your life savings.

Long Term Care Planning Tips

Speak to a Professional

  • Long term care planning includes consideration of personal dependency and medical deductions, home transfers taking into account basis and capital gains taxes, annuities, family caregiver costs, the sale of your home, reverse mortgages, owner occupancy rules, partial sales, gift tax rules, life estates, Medicare, Veterans Benefits, Medicaid, spend down strategies, promissory notes, life insurance loans and cash ins, divorce, income trusts, special needs trusts, annuitizing retirement accounts, and various asset transfer options. These issues can become extremely complex, which is why you should have the counsel of an experienced long-term care planning attorney.

Purchase Long Term Care Insurance

  • Whether you get a short policy for three years, a five year policy or one with spousal options, it will ultimately save you money and give you peace of mind. There are more options available now beyond a strict long term care policy. For example, you could purchase a hybrid long-term care/life insurance policy. There are also annuity plans available.

Consider a Caregiver Contract with Children or Others in Place

  • This contract must be in writing and should be as specific as possible. The caregiver should keep a log of services rendered and must include the payment under this contract as taxable income.

Get Good, Detailed Legal Documents in Place as Soon as Possible

  • Disability and long term care needs can come at any age. Your current power of attorney and will should be reviewed and revised or replaced, if necessary. depending on your wishes and goals. You now may need to add specific language to deal with the IRS, gifting, specifics on real estate that may need to be sold, and to add accounting provisions to safeguard your financial assets.

Long Term Care Planning Resources

Below is a list of helpful resources you can use for your plan:

When To Begin This Type of Planning

It is never too soon to begin Long Term Care Planning. It is critical to have some type of long term care plan when you or a loved one needs help with daily activities (e.g., eating, dressing, bathing, toileting, transferring, and walking) or instrumental activities of daily living (such as cooking, cleaning, caring for pets, paying bills, and managing finances). This type of planning MUST be started while you are still mentally capable of making legal and financial decisions. Take action today by speaking with an attorney at InSight Law. Our team is ready to help you and your family with your long term care planning needs.