You’ve probably heard about long-term care planning. It’s your plan for how to care for yourself at home or at a facility if you can no longer take care of yourself. It’s how you’ll pay for those services and an explanation of the services that you want.
Long-term care planning allows you to stay in control of the way you’re cared for in the future, which should be your goal. However, it also has another major benefit: It helps protect your assets.
Protecting your assets with long-term care planning
Medicaid rules make it so that you can’t have much in terms of countable assets. If you have a higher income or a great number of assets, then you simply won’t qualify for Medicaid until you pay down (spend) those assets. That may include selling off those assets for money to pay for your care.
Long-term care planning eliminates this issue by looking at how you can afford care without touching your current assets. This may also include Medicaid planning, including, but not limited to, setting up trusts or giving away assets long before the look-back period.
No care plan covers every expense, but long-term care planning considers this
Your long-term care plan will consider all aspects of your situation to determine how you can get the coverage and support you need as you age. This includes looking at your basic health plan and how much it covers, your 401(k) benefits, your portfolio and other financial supports you may have.
Once you know the financial position you’re in, your attorney will help you find ways to protect the assets you intend to pass on to your loved ones, like life insurance policies or your home. For example, you may put your home into an irrevocable trust, which takes it out of your estate and places it into the hands of a third party until it is distributed to the beneficiary.
There are many aspects of long-term care that have to be considered when you start estate planning. Start planning early, so you have plenty of protections in place if or when you need care.