You don’t have to be a Miami estate planning lawyer to understand the importance of planning for future health care costs.
According to an article on marketwatch.com, Americans borrowed approximately $88 billion to cover medical expenses last year. Health costs are reason number one for bankruptcies among the middle class. The U.S. Department of Health and Human Services estimates that 70% of those aged 65 and older will need long-term care at some point. With the average monthly cost of nursing homes in Florida reaching as high as $8,882, there is no time like the present to start planning for your golden years, especially if you want to protect your assets and wealth.
Long-Term Health Care Mistakes to Avoid
Estate planning mistakes abound when it comes to long-term care. Meeting with a Miami estate planning lawyer now to go over your options could save you a lot of heartache in the future.
In the meantime, keep reading for some of the most common mistakes that we see people make:
- Purchasing long-term care insurance with inadequate benefits. If you purchase a policy that has gaps in coverage, you could be left with not enough cash flow to take care of those gaps. In such cases, assets may need to be sold off to pay for care.
- Not understanding Medicaid. Many people believe that they have to deplete their life savings before they can qualify for Medicaid benefits. A Miami estate planning lawyer can help you come up with a strategy to qualify.
- Long-term investments with no liquidity. When your wealth is tied up in investments, you can’t use it to pay for your care.
- Assuming your will takes care of long-term health arrangements. Don’t assume that barebones estate planning will put all the pieces in the right place.
- Failing to put advance directives in place. Be sure to designate a durable power of attorney in case of incapacitation. Otherwise, your family may be in for a long guardianship battle in the courts.
How Can I Plan for Long-Term Care?
Many people need long-term care at some point in their lives, but few actually make plans for it. If you ever need help to perform daily activities such as eating, bathing, and dressing, over an extended period of time, you will need long-term care. You should involve your family in long-term care decisions to keep everyone aware of your plans and needs. Make sure you have the right documents in place before it’s too late, or your family may be forced to provide for you.
Long-term care is often needed because of aging, chronic illness, or injury. While most care recipients are older, a good number of younger working-age adults are currently receiving long-term care due to health issues and injuries.
You may be able to secure long-term care services in your home, an assisted living facility, or a nursing home, but it can be quite expensive. Fortunately, there are steps you can take to plan ahead and pay for it.
According to Genworth Financial’s Cost of Care Survey, in-home care can cost over $50,000 per year. Depending on the skill and certifications of the caregiver, it could cost your estate significantly more.
Depending on the level of care you need, assisted living can also cost over $50,000. The most expensive long-term care option is a nursing home, which can cost over $90,000 per year. These costs could also rise in the near future. Planning your estate in advance is one way to help you ensure that there are adequate funds.
Keep in mind that long-term care is not covered in full by health insurance, disability, or medicare. Health insurance may cover nursing home expenses, but only for a limited time. Disability insurance may cover part of your income if you are unable to work, but it does not pay for care. The Medicare program provides limited coverage for skilled care, essentially only covering up to 100 days of post-hospitalization care. Beyond that, you’re on your own. Proper financial planning now may help to reduce the burden for your family and estate.
Who will end up footing the bill if you need long-term care? There are three sources: your assets, Medicaid, and long-term care insurance. So what should you do to protect yourself and the members of your family?
Medicaid is set up to pay for the cost of care for low-income individuals, children, and others who cannot support themselves. If you want to qualify for Medicaid, you may need to “spend down” your assets if you don’t do any other planning. Another caveat to consider is that you will need to find a facility that accepts Medicaid.
Long-term care insurance is often the best option if you have assets or income you want to protect, you want to limit the financial burdens you place on others, or you want to have a choice where you receive care from. Premiums are usually lower when you are young and healthy. It’s best to purchase a policy before age starts to set in.
Planning now may save you from many hassles in the future. When those moments arise, it becomes clear why consulting a lawyer each step of the way was a smart decision.
Talk to a Miami Estate Planning Lawyer Today
As you can see, planning for long-term health care requires specialized knowledge if you want your strategies to hold under pressure. Creating an estate plan now and putting all the proper protections in place can give you the peace of mind you need to know that your future is secure.
If you need help putting your estate plan together, don’t wait any longer. Get in touch with a Miami estate planning lawyer today at Casal & Moreno. We will work with you to create a plan that fits your family’s needs.