The cost of long-term care in a nursing home facility in many of the urban portions of Maryland range from $11,000 to $14,000 per month. This can be a daunting figure for many upcoming retirees to wrap their heads around. While most people do not want to think about the possibility of ending up in a nursing home, the reality is that many have no other better options. Home health care is often either too expensive or not comprehensive enough to meet the medical needs of many elderly in their last few years of life. While many hope that family members can manage their needs, more often than not, this becomes a failed strategy.
Long-term care covers both medical and non-medical needs and typically revolves around assistance with activities of daily living (ADLs) such as bathing, toileting and eating. The most common approach to meeting these needs is through professional home health care aids, assisted living facilities and skilled nursing facilities. Financially, to cover the costs of these services, most people will need at least $10,000 per month. How do you pay for this without depleting all of your resources for your spouse or other family members to later use or inherit?
That is where long-term care planning comes into play. This type of planning should occur well before you actually need any of these services. What is the best age to start this planning? The American Association for Long-Term Care Insurance (AALTCI) recommends mid-50s. The reason being that premiums for long-term care insurance increase with age.
Most claims for long-term care are initiated by people in their eighties. This makes purchasing long-term care insurance a gamble because while the premiums are cheaper in your younger years, you also run the risk of carrying the insurance and paying premiums for a longer period of time. Failing to do any planning is even riskier because you can deplete your nest egg. Few people can count of becoming Medicaid-eligible because of the low asset and income requirements.
Fortunately, there are many proactive planning measures that can be implemented by a knowledgeable elder law attorney. Some strategies involve asset protection planning such as placing certain assets into irrevocable trusts or forming life estates for real estate. This is done to protect those assets while helping a person to become Medicaid-eligible.
Other strategies include purchasing long-term care insurance. Five key factors to consider when comparing policies include: (1) the daily benefit amount; (2) the amount of inflation protection; (3) the length of the benefits payments; (4) the waiting period before benefits begin; and (5) your current age.
Another popular strategy is to purchase a life insurance policy with a long-term care rider. This allows you to accelerate the death benefit and spend it dollar for dollar on long-term care needs once the rider is triggered. To trigger the rider, most policies require you to show that you need assistance with two or more ADLs or you have become cognitively impaired.
For assistance in determining which long-term care strategy best fits your situation, contact the attorneys at Stouffer Legal in the Greater Baltimore area. You can schedule an appointment by calling us at (443) 470-3599 or emailing us at office@stoufferlegal.com.
