Even if you’re healthy now, there’s a significant chance that you’ll need long-term care at some point in the future. In fact, studies have shown that 70% of those age 65 and older will need some form of long-term care. This is a significant number, especially in light of the costs associated with long-term care.
Those who inadequately plan for their potential long-term care needs can thus face dwindling resources, meaning that they might struggle to cover their needed care expenses and find ways to leave wealth to their loved ones.
If you want to avoid that from happening to you, then now is the time to start developing an estate plan that protects your interests. But if you’re like most people, you don’t even know where to start that process.
Steps to take when engaging in long-term care planning
If you want to protect your interests, then you can’t take a wait and see mentality to your estate planning. Instead, you should get out ahead of the issue by taking the following steps:
- Understand the costs involved: When you engage in long-term care planning, you’ll want to carefully think about the type of care that you’ll want. Once you’ve identified that, then you can start calculating what that care will look like from a financial perspective. This, in turn, will give you an idea of what resources you’ll need to cobble together to cover those expenses.
- Consider insurance: Long-term care insurance policies can help cover a significant amount of your care-related expenses when the time comes. However, these policies can be expensive, and they often have a lot of terms and conditions that must be met before you can file a successful claim. So, make sure you understand the parameters of a given policy before deciding to take it out.
- Create a healthcare directive: While one of these documents can specify what type of medical care you’d like if you’re unable to make that decision for yourself, it can also address what kind of long-term care you’d want. That way you can rest easy that you’ll be cared for as you see fit, even if you can’t voice your wishes at the time that long-term care is needed.
- Financially plan: If you want to self-fund your long-term care, then you’re going to need to ensure that you have adequate resources. This will require some adept financial planning on your part given that the costs of long-term care can easily reach into the hundreds of thousands of dollars.
- Engage in Medicaid planning: If you don’t think you’ll be able to self-fund your long-term care, and many people aren’t able to do so, then you’ll want to effectively plan action steps to ensure Medicaid eligibility. Given the five-year lookback period on the disposition of your wealth, you’ll want to start this process sooner rather than later.
Confidently navigate your long-term care plan
Thinking about your potential need for long-term care and how to pay for it can be stressful. But don’t let your fear of the future impact your willingness to plan for it. After all, we find that most people feel a burden lifted from their shoulders once they finalize an estate plan that covers their needs and wishes.
With that in mind, take charge of your future. Educate yourself on your estate planning options and pick the path that makes the most sense to you.
