Long Term Care and Skilled Care

What are your plans for aging? What will you do when your health, or the health of your spouse, mother, father, aunt, uncle, sister, or brother begins to fail? An estimated 50% of the population will use long-term care during their lifetime. So, assuming that either you, or someone you know, love, live with, care for etc. will need long-term care, what is the plan?

Many people plan to self-insure or buy long-term care insurance. Both of these are good options.

Self-Insure: This plan involves putting money away periodically toward long-term care. The main risks of self-insuring is needing money sooner than planned, not having enough money, and losing money on investments. Still, money in savings need not be used for long-term care if you do not need the care. This flexibility makes this an attractive option.

 

Buy Long-Term Care Insurance: Contrary to popular belief, this may be a financially attractive option. Remember, the basic rule of thumb with insurance is that the younger and healthier you are at the date of purchase, the cheaper it will be. Insurance professionals recommend that individuals purchase this type of insurance between the ages of 55 and 65, ideally, although it can be purchased earlier, or even later, depending on your health and family medical history. There are now insurance products that provide a death benefit in the event you do not utilized the long-term care coverage during your life.  You should discuss your options with your financial advisors and insurance agents.

 

Receive Public Aid. If you are too old, or your health is too poor to make savings or insurance a valid option, public funds may offer some hope. Unfortunately, this hope is limited.

First, not all long-term care facilities have beds allocated to individuals receiving public payments (i.e., Medicaid). It is true that there are perfectly nice facilities that have public aid beds, and really terrible places with public aid beds. Finding a facility takes time, research and effort.

Second, you have to qualify for public aid money. In Illinois, to qualify to receive aid you must have very limited income and have little or no assets, resulting in the need to “spend down” assets prior to receiving aid. The application of the “spend down” rules will vary per individual. Factors considered include whether you have a spouse or a disabled dependent child living in a home you own.  In this case, the value of the home, as well as certain other assets, may be accepted from the spend down rules.

Third, giving money and assets to family members or others will not avoid the spend-down rules unless you make the transfers well in advance of the need for long-term care (over five years), and the transfers are not made to avoid a known creditor.

Consider an Irrevocable Trust. Putting money in a trust generally will not result in qualification for public aid. Assets in a standard estate planning trust (i.e., a Revocable Living Trust) will also be counted as part of your assets that you own or control. However, assets held in certain irrevocable trusts, or in a trust with special needs provisions, may be protected. Again, this depends largely on when the trust was created, who funded the Trust, and why it was put in place. As with savings and long-term care insurance, timing is everything. Putting the plan in place before you need it can save assets for yourself and your family.

 

 

For long-term care planning, it is best if you think about this issue sooner rather than later, and any planning must be done with individualized counsel by a qualified attorney who concentrates in this area of law.

Should you have any questions about Long-Term Care and Skilled Care, or would like to schedule a free initial consultation, please contact Waltz, Palmer & Dawson, LLC at (847)253-8800 or contact us online.

Waltz, Palmer & Dawson, LLC is a full-service law firm with various areas of service to assist your business, including: Employment Law, Intellectual Property, Commercial Real Estate, Business Immigration, Litigation and general Business Law services. Individual services include Estate Planning, Wills and Trusts, Probate, Guardianship, Divorce and Family Law.

This article constitutes attorney advertising. The material is for informational purposes only and does not constitute legal advice.

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