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How can older adults plan to pay for long-term care?
Estate planning isn’t just about the distribution of property when a person dies. A thorough estate plan can also help protect people when they are at their most vulnerable. Older adults who are about to retire often sit down to create an estate plan if they haven’t already or update an existing one.
People preparing for retirement frequently choose to expand their documents to address the unique concerns that arise later in life. Many older adults may eventually need long-term care. They need the support of an in-home nursing professional or to relocate to a nursing home. Long-term care typically costs thousands of dollars a month, and people preparing for retirement can plan to make that support more accessible.
What does long-term care planning involve?
Long-term care planning often involves asset protection planning. People have to review their holdings and make preemptive decisions about how they hold and manage their resources to ensure they have access to Medicaid if their health declines.
Medicare generally does not cover long-term care expenses. Older adults in need of intensive support usually have to apply for Medicaid, which has strict limits on countable assets and income.
Any transfers made in the five years prior to an application for long-term care Medicaid benefits could trigger a penalty. Older adults also have to consider whether their homes and other assets might be vulnerable to Medicaid estate recovery efforts after they die.
Establishing a trust, taking on co-owners for key assets and even gifting resources to family members can all be ways to plan in advance to qualify for Medicaid to cover long-term care costs. People preparing for retirement may need assistance as they address their unique estate planning concerns, and that’s okay.