Planning For Long-Term Care

Every day, from 2011 until 2030, 10,000 baby boomers will turn 65. 70% of them will need some form of long-term care during their lifetime. For those 70% requiring long-term care, the average total cost is estimated at $266,000. About 25% of households have no retirement savings at all, and the median savings for those who do is less than $75,000. Thoughtful estate planning is now required simply to prevent insolvency for the individual and their families.

Long-term care is generally not considered acute medical care, but rather assistance with the basic personal tasks of everyday life. There are six basic Activities of Daily Life (ADLs) which include bathing, dressing, eating, toileting, transferring, and continence. ADLs are used primarily for determining needs with respect to government programs or triggering insurance coverage. However, there are many more everyday tasks where individuals require assistance. Assistance is often provided by family members, in-home support services, or institutional facilities (i.e. adult daycare, assisted living, skilled nursing homes, etc).

Crisis Planning

A crisis situation arises when an individual requires or is about to require long-term care and whose options to pay for this care are limited. Often times the individual will have little cash or other assets that can be sold quickly. Their primary asset is their home which nursing homes may suggest they sell to raise the money needed to pay for the long-term care. Consulting with an attorney may allow the individual to save their home and preserve their other assets by qualifying for Medicaid assistance.

Planning in Advance

Creating an estate plan that considers the cost of long-term care can save greater assets from being used up by long-term care costs. Whether the client plans to private pay, use long-term care insurance, or qualify for Medicaid discussing these options with an attorney can help ensure that funds will be available when the need arises.

Frequently Asked Questions About Long-Term Planning

Why should I think about long-term care and estate planning at the same time?

Long-term care is an emerging issue that poses a great risk to individual’s estate plans. Conditions requiring long-term care can come along suddenly leaving little time for advanced planning. Long-term care costs can exceed $200,000 significantly impacting retirement savings plans. Estate planning can take a client’s financial resources and reduce the risk that long-term care will disrupt retirement resources. Essentially you are creating protection against a worst-case scenario.

I qualified for Medicare, why should I think about long-term care planning?

Medicare only covers the first 100 days in a long term care facility. The average stay in a facility exceeds 18 months, so there is a significant financial impact for individuals requiring long term care.

What are the eligibility rules for Medicaid?

To qualify for Medicaid, an applicant cannot have more than $2000 in countable assets and their income cannot exceed a certain amount that is adjusted year to year. Under the Medicaid rules, there are many exceptions for assets so they will not be considered against the $2000 limit. For example, an applicant’s personal residence is not countable up to a certain equity amount.

I've been told that I need to spend down all my assets before I qualify for Medicaid.

Not all your assets must be spent down in order to qualify for Medicaid assistance. In fact, with good planning, you may be able to keep many of your assets from being considered countable for Medicaid eligibility purposes.

Can I gift money to my children and grandchildren so that I will qualify for Medicaid sooner?

Unfortunately, probably not. Medicaid rules include what is known as a Lookback period. This Lookback period examines transfers made in the last 60 months by the Medicaid applicant. If those transfers were made for the purpose of trying to qualify for Medicaid, then those amounts will be counted for eligibility purposes. There are exceptions to this rule, so it’s a good idea to consult with a knowledgeable attorney to understand your options.

Your Essential Guide to Estate Planning, Administration, and Long-Term Care

Get a free copy today!

Financial needs and health concerns naturally evolve naturally as we age. You can address these changes comfortably by choosing to face your estate planning challenges head-on. Download a free estate planning ebook to help you get started with this process. 

Request a Call Back?

Please provide some basic information and we'll get back to you within 48 hours, during business hours.

Submit A Call Back Request

for any inquiry

 by Jo Ann S. on Holman Law Firm
I'm recommending him to all my friends

Steve presented at Allen's senior center. He did a great job of communicating so effectively on a sensitive topic. He listened intently to all question and showed a sincere care for each attendee. I'm recommending him to all my friends who have estate planning or will needs.

 by anonymous on Holman Law Firm
Living Trust Prep

Atty. Holman was very thorough and answered all of our questions promptly. Most of the questions were via email, but he also spent time on the phone for the initial consultation, discussing our needs and reviewing documents after they were prepared. We never felt rushed or pressured. My wife and I felt completely comfortable and confident in his handling of our affairs. We highly recommend him !!

 by Julia B. on Holman Law Firm
Professionalism and care are outstanding

Steve's level of professionalism and care is outstanding. Steve has participated in numerous community events and each time, he blesses his audience.

 by Miroslav (Mick) on Holman Law Firm
Financial Consultant

Steve Holman did an outstanding job explaining complex estate matters to me and my 91 year old mother. He also helped us think through some sensitive non-legal, non-financial "elder matters" (like planning for a dignified exit and making sure her wishes were clear and codified). He is bright, energetic and has the perfect demeanor for constructively interacting with older folks. Hire him!

Page 1 of 3:
Scroll to Top