Regardless of how much wealth you’ve built up, the need for extensive long-term care can threaten to quickly erode it, leaving you with little, if anything, to pass down to your loved ones. The risk of this happening may be greater than you think. In fact, if you’re 65 or older, there’s a 70% chance that you’ll need some sort of long-term care in your lifetime. That’s why it’s imperative that you know how to build an effective estate plan that takes the potential need for long-term care into account.
In this post, then, we want to look at some estate planning steps you can take right now to reduce the risk of long-term care ruining your estate. By following them, you’ll hopefully shield your finances, secure the care you need and rest assured knowing that your loved ones will be supported by your estate’s assets.
Estate planning steps to address your potential need for long-term care
Getting a handle on potential long-term care costs can be tough. But with some intricate navigation of the process, there are ways to protect your and your loved ones’ interests while still ensuring that you have the support needed to cover any long-term care costs that may be thrown your way. Here are some steps for doing that:
- Seek to qualify for Medicaid: If you structure your estate properly, you may be able to reduce your income and your assets so that you qualify for Medicaid benefits. This means that the government will pick up the tab for much of your long-term care needs. While they may try to swoop in and recover those expenses from your estate once you pass away, there are ways to use your wealth to your and your loved one’s benefit that won’t be subject to recoupment by the government. Just make sure you’re aware of the Medicaid lookback period so that you don’t get penalized for planning too late.
- Purchase a long-term care insurance policy: While this isn’t an option for everyone, especially since they can be somewhat expensive, a long-term care insurance policy may provide you with an additional layer of protection and peace of mind. Just be sure to fully understand the terms of any policy that you purchase, as there are often strict requirements that must be met before the insurance company will start paying for care.
- Learn about your long-term care options: There are a lot of different ways to meet your long-term care needs. And each of them carries a different price-tag. By educating yourself on your options, you can prepare for the type of care that you want. This will give you an idea of what you need to save and the most effective way to cover your potential costs.
Keep in mind that there’s a lot that goes into each of these three steps. So, it may be a good idea to discuss each of them with your estate planning attorney.
There are countless ways to devise your estate plan. You don’t want to get caught up in putting together documentation that doesn’t protect and advance your interests. That’s why now is the time to educate yourself as much as possible on what you can do to secure your future.