What is long-term care planning?

Long-term care planning is the process of developing the best and most economical plan for paying for an individual’sContact Amy button possible long-term care needs while trying to preserve and protect assets for the individual’s family members.

What is the main goal of long-term care planning?

The goal of long-term care planning is two-fold. Long-term care planning seeks to ensure that a client has sufficient funds to pay for such care should it become necessary. At the same time, long-term care planning seeks to preserve a client’s assets for family members, avoiding spending all of an individual’s funds on long-term care.

Planning how to best cover the costs of long-term care provides clients with the comfort and confidence of knowing that they have addressed this possibility thoughtfully and responsibly.

How do you plan for long-term care?

The client’s financial situation is the primary factor in determining whether the client will qualify for Medical Assistance benefits to pay for long-term care. Accordingly, the planning process starts by developing a solid understanding of the client’s financial picture, including current and expected assets and income. Other factors that impact a client’s financial situation must also be considered – for example, does the client have a disabled adult child residing at home?

There are various strategies legally available to become eligible for Medical Assistance benefits. Whether an approach will “work” depends on a client’s unique circumstances. A strategy that benefits one client may be detrimental to another. For this reason, long-term care planning may involve collaboration between the client, the client’s family members, legal counsel and, if applicable, the client’s financial advisor.

Ideally, planning for long-term care takes place long before a client needs such care. Planning in advance provides the most options. For example, there’s more time available to give assets away (if appropriate) and avoid or reduce the penalty of the “five-year lookback” period. Planning in advance also allows time to reflect and address the emotional impact of implementing certain planning strategies.

While advance planning is ideal, it is not the only option. Planning may be done at any time, and certain strategies may be available and appropriate even when a client has an immediate need for long-term care services.

What are long-term care insurance plans?
Various insurance companies offer plans or policies to pay for a portion of long-term care costs. Before purchasing such a policy, I recommend that a client compare the various plans and consult with legal and financial advisors to determine whether such insurance is a good option.

What is the best way to plan for long-term care?

There is not one best way to plan or one best strategy to deploy. 

That said, a universal best practice is to plan well in advance of when long-term care may become necessary. Planning can be beneficial for individuals in their 60s or early 70s, who enjoy good health – when the possibility of long-term care may feel remote.