The focus of my segments has always been about asset protection. Things you should be doing right now to protect your assets from creditors and predators. But did you know that the biggest creditor out there for all of us is a creditor few of us ever see coming. I’m talking about the costs of long term care.
In my practice I have seen many clients do extraordinary estate planning only to see a large portion, if not all, of the estate evaporate at the end of their lives because one or both spouses were fortunate to live long lives, but unfortunate to need long term care at the end of their lives. The costs of long term care can be staggering. In northern Nevada the average cost of a month’s stay at a long term care facility exceeds $5,000 a month. Add in any additional costs over and above your basic care and you can see how quickly an estate can be decimated by the costs of this care.
So what can you do?
Here are your options:
1. You can chose to do nothing and simply use your own resources to pay for all costs.
2. You can buy insurance to pay for the costs of care.
3. You can implement a plan to migrate most, if not all, of your assets away from your estate so you can qualify for Medicaid.
Most people chose the first option. They either don’t think they will ever need long term care or they are unwilling to pay the premiums for long term care insurance. The advantage is that this strategy is simple and cheap. The disadvantage is that if you ever need long term care, this strategy is the most expensive. Hardly a plan at all.
The next strategy is to purchase long term care insurance. The good news is that there is a wide variety of plans available, so you have choices. The bad news is that most plans are quite expensive and people have a hard time paying a lot of money for something they may not need.
Lastly, for those with modest estates, planning for Medicaid may be a viable option. Medicaid is a needs based program so you don’t automatically qualify for benefits, but in many cases it is the only viable option.
To decide what option works for you I recommend you sit down with an experienced estate planning lawyer to discuss your situation and assets the options available to you to help solve this very important issue. For more information about protecting your assets by planning for the future, contact us.