Working with an estate planning attorney is an excellent way to prepare for the future and to protect the assets that you want to pass on to your loved ones after you’re gone. A qualified lawyer will be able to offer you valuable advice, not only on setting up a will or trust, but also on creating other important documents, such as medical directives and powers of attorney.
One area that often gets overlooked in the estate planning process is long-term care insurance. There are different reasons that it gets ignored:
- I’m too young to think about long-term care (whether you’re 40, 50, 60, or more)
- I already have medical insurance, isn’t that good enough?
- I don’t want the added expense of long-term care insurance
- I have enough money set aside for nursing home or other long-term care
Some or all of these justifications may be true, but it really does make sense to at least discuss the risks with your attorney. For example, were you aware that it’s estimated that 60% of people over the age of 65 will need some kind of long-term care in their life? Also, how confident are you that your health insurance will pay for long-term care? You will definitely want to double-check that, as most private insurance, as well as Medicare, don’t cover most long-term care services. Such expenses (which can run in excess of $8,000 a month here in California) can have a very detrimental affect on your financial security and overall wealth.
Keep in mind, too, that long-term care isn’t just for the elderly. Many younger people involved in accidents or who are diagnosed with a particular disease or illness will also require long-term care. In many cases, this type of care will take place in a hospital or rehabilitation center, and it’s important to know where the money will come from to pay these continuing expenses.
Of course, that’s not to say that everyone needs long-term care insurance. Again, your estate planning attorney can help you assess your risks and determine the right course of action.
What Long-Term Care Insurance Does
Long-term care is certainly beneficial in paying for nursing home expenses, but it doesn’t necessarily exclude other types of care settings. It may be used to pay for in-home care, for example, or to help with the costs of adult day care or assisted living facilities.
Basically, long-term care insurance comes into play when an individual has lost the ability to take care of two or more of their own daily activities. These are usually defined as:
There are some other impairments that can trigger the need for long-term care, even if the person involved is still able to function in all of the ways listed above. For example, a person with Alzheimer’s may still require long-term care, even if he or she is able to perform all six of the daily activities.
Of course, long-term care isn’t just about daily activities. It can also be used to pay for health care and rehab costs that are recommended by a physician. Physical or speech therapy may be covered, as well as the need for professional care by a registered nurse.
Your estate planning attorney will work with you to help answer the most important questions in purchasing a long-term care insurance product. Based on knowledge of the Orange County area, the lawyer can guide you as you determine where in the community you might be most interested in receiving care and help base estimated coverage needs on that and other criteria.