Modern society has made changes in the way we live our lives. In past generations, families lived in the same geographic areas and were accustomed to taking care of the elderly family members who could not take care for themselves. Modern life requires careers with multiple employers and the need for social mobility. Today, family members are faced with the desire to care for their elder parents but are unable to be caregivers. The advances in medical treatment has resulted in people living longer with their families faced with the costs associated with some form of long term care. Long term care does not mean the constant attention of a physician, but some level of eldercare including:
- custodial care;
- intermediate care; and
- skilled nursing care.
Unfortunately, custodial and nursing care for the elderly is not paid by Medicare and these costs can thrust an individual into financial spend down towards spousal impoverishment and poverty without adequate planning. Familiarity with the financial issues related to eldercare cannot be expected and reliance on a fee-based financial advisor for direction can be positive first step. An elder law attorney can help provide legal strategies to protect your assets subject to certain constraints. These constraints can affect your ability to control your assets and invade the “corpus” of your assets. Long term care insurance can be to address the uncertainties related to eldercare. A long term care insurance policy can be designed to meet the costs associated with eldercare providing greater flexibility and control over your assets. A financial advisor can assist in the review of the following long term care policy considerations:
- Waiting Period
- Benefit Period
- Benefit Triggers – ADLs
- COLA Benefits
- Home Health Care
- Nursing Home Care
- Level of Care Provided (LPN, RN)
- Premium History for In-force Policies
Long term care policy benefits are generally received tax free. A long term care policy can provide greater flexibility when combined with the funding of trusts at the time that there is a permanent decline in health and benefits are applied for. A long term care policy can prevent the healthy or younger spouse from impoverishment due to eldercare expenses.
It is not a matter of if, but when will we be required to meet the financial needs of aging. A financial advisor can help assist you throughout your entire journey towards your True North.
