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Are you prepared for the realities of long-term care?

As the quality of life around the globe has risen, so has the overall life expectancy. Average Americans are routinely living to 80, 90, even 100 years of age. This is due in no small part to medical and technological advances like:

  • Access to preventative health care
  • Widespread vaccination programs for diseases that were responsible for countless deaths and disabilities in years past (polio, measles and whooping cough, among them)
  • Medical treatment and transplant breakthroughs that mean certain conditions like tuberculosis, heart disease and lung disease, diabetes, kidney failure and liver failure are no longer a death sentence
  • Agronomic advances that create better crop yields, thus increasing food availability
  • Technological progress in terms of safer vehicles, more insulated homes that provide better protection from the elements, the ability to seek emergency help when needed and connectivity to a support system

There are currently about six million people in our country who are 85 or older, and that number is expected to more than double in the next 25 years. Advanced age often begets poor health and a host of medical conditions and limitations that can make independent living nearly impossible. Unless there are family members or friends willing (and able) to step in as caregivers, the need for long-term assistance in the form of home healthcare staffers, residential care facilities, assisted living facilities, nursing homes or other options will likely be necessary.

The difficulties of long-term care

The problem with long-term care is two-fold: 1) it signifies a lack of independence for most elderly people, something they are usually vehemently opposed to, and 2) it is extremely expensive. The first problem is one that can only be addressed on an individual level. Clearly, if your parent, grandparent or other vulnerable person is resistant to the idea of caregiving assistance, a frank but compassionate conversation must take place to explain the situation.

Once that has been done, options could be considered like perhaps using the person's savings to cover the cost of part-time or live-in home health assistance if that is feasible, under the supervision of nearby friends or loved ones. If in-home care isn't an option due to the complexity of the situation, then at least everyone is on the same page. At that point, financial arrangements can also be discussed.

The second problem with long-term care is the cost. Even relatively basic nursing homes and other residential care facilities can cost several thousand dollars a month. High-end facilities with more amenities can easily run more than $100,000 a year. Since there are few government subsidies or set-offs available (other than Medicaid or possibly Veterans' or Railroad benefits), and private health insurance might not provide coverage for this type of care, it is usually self-funded. Someone who worked their entire lives to have a retirement-age nest egg or to leave a financial legacy for their children can see their life savings wiped out in a relatively short time.

Planning ahead can make all the difference

We all know that we should have an estate plan, and that it should be individually tailored to address our unique assets, desires, potential heirs and tax complications. In the past, "estate planning" generally only meant dealing with the disposition of assets after we pass away (i.e., creating a will or trust), but nowadays, it is much more than that. Modern comprehensive estate planning also encompasses making arrangements to appoint health care decision-makers (through health care proxies or directives), financial powers of attorney, guardianship of our children, conservators for special needs loved ones and even the need for long-term care in our golden years.

Long-term care planning can make a world of difference not only in the quality of care you receive, but also the extent to which loved ones have to pitch in to help provide for your healthcare. By, for example, gifting assets to loved ones in your lifetime or putting assets in a special needs trust (with you as the beneficiary but not the trustee), you could preserve important benefit program eligibility. Other options, like purchasing long-term care insurance, the costs of which could be payable directly out of estate assets, could also help offset the massive expenses of assistance.

Only an experienced and skilled estate planning attorney will truly understand the complexities of the options available to you in order to preserve eligibility for the government benefits you deserve and to fund the care you need. The earlier you start planning for the possibility that you might require long-term care in the future, the better prepared you will be when the need arises.

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