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Planning For Long-Term Care
As you draw up your estate plan, you should consider setting aside funds to pay for long-term care, should you need it in the future. Many people rely on federal and state assistance programs, like Medicaid, to pay for these costs and quickly find out they are insufficient. This then leaves people attempting to pay for the care themselves or with the help of family. If you did not set aside adequate personal resources for your care, you may find yourself in the position of having to cash out life insurance policies or sell your house and other possessions.
While many think of nursing homes as the main option for long-term care, there are other choices available, including:
Paying for these types of services can be a huge burden on both the individual and the family. Some of the sources of funding for these types of facilities and services include:
Federal and state programs
Medicaid will pay for some long-term care, but the type of care it will pay for, how much it will pay and the eligibility requirements for the benefits vary state by state. Generally, a person has to have spent all of their personal assets in order to receive Medicaid funding for nursing home care. Most Medicaid programs will not pay for assisted living or other types of care other than nursing homes. Medicare, on the other hand, generally only pays for short-term nursing home care following a hospital stay to treat an injury or illness. Medicare also may cover some of the costs associated with therapy (physical, occupational) and in some instances, home care, following a hospital stay.
Individuals can purchase long-term care insurance policies, which are designed specifically to help cover the costs of nursing homes and other assisted care. The type of care and how much it will cover varies by policy. It is important to purchase long-term care insurance before retirement because the costs of the insurance increase with age and it may be more difficult to qualify for the insurance the older you are.
Medigap policies - supplemental insurance policies for Medicare - may help pay for some of the costs of nursing homes, but it is important to remember that Medigap usually will only help pay for costs that are covered and approved by Medicare. Some policies will cover additional costs, but you will want to verify this with your insurance carrier.
Individuals can open up savings accounts or other investment accounts to set aside funding for long-term care. An estate planning attorney or financial advisor can help you choose the best type of account to achieve this purpose.
For those who find themselves in a position of paying for long-term care for themselves or a loved one and do not have adequate resources to do so, other options include:
Long-term care is expensive. No one enjoys thinking about what will happen to them when their health decreases or if they suffer a serious injury, illness or disease. But it is better to be prepared for the worst-case scenario than to worry about it when you and your family are feeling most vulnerable.
Preparing to Meet with Your Estate Planning Attorney
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