Defending Your Custody Agreement: Protecting Your Education Choices

How Do Long-Term Care Considerations Affect Estate Planning?

14 July 2023 by Daryl Young

Planning for your estate is critical to ensure that your inheritors carry out your final wishes and guarantee a fair distribution of your assets. However, estate planning is understandably stressful and complex, and people often overlook critical aspects. One of these essential aspects to consider is how your long-term care may impact your estate.

In other words, most people think of their estate as their current assets. In reality, major life events and long-term care can greatly diminish the assets available to your estate after your passing. If you want to take a holistic approach to estate planning, it's crucial to factor long-term care into your discussions with an estate planning attorney.

Why Should You Think About Long-Term Care Now?

Long-term care may not seem like a major consideration if you're currently healthy and independent. However, health events can often strike suddenly. Nursing home care can cost thousands of dollars per month, with private rooms in some states crossing well into the five-figure range. These costs can rapidly eat through even substantial savings or assets.

Additionally, certain programs (such as Medicaid) may require you to spend down retirement savings and other assets before you qualify. These programs can also claw back expenses after you pass, which can jeopardize major assets like your home. If you plan to pass on your home or some of your savings to your children or other inheritors, these long-term care costs may threaten those plans.

The good news is that you can often avoid these outcomes with the correct planning. However, it's important to start thinking about these situations as soon as possible. Waiting until you need long-term care can substantially limit your options, making it much harder to protect assets you may want to pass down as part of your estate.

How Can An Estate Planning Attorney Help?

Numerous options are available to make long-term care a critical part of your estate plan. An estate planning attorney can help discuss many of these choices with you, including planning ways to protect your assets while qualifying for state programs such as Medicaid. These options may include transferring assets now, creating a trust, or other alternatives to minimize your "visible" assets.

Note that Medicaid's look-back period is five years, which means that any major changes to your financial situation during this period (including gifts or asset transfers) can limit your eligibility or delay the start of your coverage. An estate planning attorney can help you examine your assets, recognize issues, and design an estate plan to provide long-term care without jeopardizing your estate. 

For more information, contact a local estate planning attorney. 

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