Paying for long-term care: an important aspect of estate planning
For many, long-term care is more desirable than nursing home care. Unfortunately, such care is expensive and not covered by Medicare over the long-term. As a result, it is vital to plan for your long-term care expenses in your estate plan.
Due to advances in medical care and nutrition over the past 50 years, Americans of today are living longer than ever. Although this is generally thought of as a positive thing, it brings forth an issue that many of our grandparents did not have to address for themselves-long-term care. As the population ages, the number of people needing long-term care is expected to balloon as baby boomers age. According to the Georgetown University Public Policy Institute, as many as 7 in 10 adults will require long-term care at some point after age 65.
Long-term care is a term that includes home and community-based services for older adults that need help with their daily activities because of a disability or a chronic illness. This type of care may include help with activities such as shopping, cooking and cleaning, as well as the administration of basic medical care.
In the past, people needing this type of care would often be cared for in nursing homes. However, nowadays, only five percent of people require a stay of five years or more in a nursing home, so there is a greater need for less intensive alternatives.
Today, there are several types of long-term care options for those that do not require the round-the-clock care that a nursing home provides. Some of the long-term care options are:
- Home care: This type of care involves health aides periodically visiting the home. It is perfect of those that do not need the intensive daily care of a nursing home, but need some assistance with day-to-day tasks such as bathing, transportation, cleaning and cooking.
- Assisted living/senior housing: This type of care involves the senior moving into a facility. However, the atmosphere is more like an apartment than a nursing home. The facility may employ staff to provide very basic medical care as well as assist residents with medication, transportation and other daily activities. In general, this type of care is good for those needing more medical attention than home care provides, but less than a nursing home.
- Day care: In this type of care, the senior visits an adult day care center. The center provides entertainment, social interaction and basic medical care and assistance with medication. This type of care is ideal for independent seniors that do not need a high level of care.
Estate planning is important
Most people find outpatient long-term care a more desirable alternative to the institutional surroundings of a nursing home. However, long-term care can be very expensive and can quickly drain savings if the expense is not properly planned for.
Since it is likely that you will need some form of long-term care in the future, it is vital to plan how you will pay for it. Although Medicare will pay for some long-term care costs, it is limited to 100 days of care in most cases. As a result, it is not a good long-term solution. Fortunately, there are several ways to plan for your long-term care expenses, such as long-term care insurance, Medicaid planning or other estate planning tactics. Depending on your circumstances, one option may be better than another.
An experienced elder law attorney can review your situation and recommend the best way to ensure that you reach your long-term care objectives.