There is an old Chinese saying that the best time to plant a tree for shade is 20 years ago. The second best time is now. There are two kinds of planning for long term care – pre-planning and crisis planning.
Pre-planning is when the client has no need of any immediate long term care services, and is not anticipating long-term care needs for some time. Usually these clients will plan with some kind of Long-Term Care Insurance (hereinafter LTCI). If purchased when young or still middle aged and healthy, the insurance company assumes the risk and the cost is usually lower. You may be able to deduct part of the cost of these premiums on your income taxes if you itemize medical expenses. There are some very good policies out there and they are designed for multiple circumstances, such as both spouses sharing one policy or a policy that doubles as life insurance and/or long term care insurance so no premiums are wasted. Some LTCI policies are available as riders on annuities. I suggest you get several quotes and be sure to talk with your financial planner, not just the life insurance agent, to be sure your goals are being adequately met at a price you can afford.
From an attorney standpoint we need to look at the whole picture – all assets and how they are titled, not just insurance, plus the client’s liabilities and goals. A solid estate plan is a first step. Some of traditional estate planning techniques like joint with right of survivorship deeds and payable on death accounts do not work in most long-term care scenarios. When there is enough time an attorney can guard against losing assets by utilizing irrevocable trusts.
Crisis planning happens when long-term care services are already being discussed due to a diagnosis or services are expected to be provided in the next five years due to advanced age or services are actually being provided and either no or inadequate pre-planning happened.
There are various crisis planning strategies, the use of which is dependent upon the client’s assets, income, and marital status. A married couple may have more options available as they are allowed to keep more in countable assets and still receive SC Medicaid. Spend-down and converting countable assets like a money market account to an exempt assets such as a preneed funeral trust or making a home repair are just two possibilities.
It is not too late to do something even if it’s just a few days before a Medicaid application is filed.
I do not recommend planning on your own or with the social worker at the nursing home. This is truly an area where someone with legal training needs to look at the situation and give advice. The cost of an elder law consult is inexpensive when compared to a home or all or your life assets being spent for end of life care.
Disclaimer: Information contained in this column is meant to be of general information on frequently asked questions concerning disability, elder law, estate planning and probate law, and does not contain specific legal advice to a client. No attorney-client relationship is created by reading this column.