Many baby boomers today do not think about their future long-term care needs and, therefore, fail to plan appropriately. If individuals and families are more aware of the potential need for long-term care, they may be more likely to take steps to prepare for the future.
Long-term care refers to a broad range of supportive medical, personal, and social services needed by people who are unable to meet their basic living needs for an extended period of time. Accident, illness, or frailty may result in conditions that include the inability to move about, dress, bathe, eat, use a toilet, safely take medications, and avoid incontinence. Also, care may be needed to help with household cleaning, preparing meals, shopping, paying bills, visiting the doctor, or answering the phone. Long-term care disabilities are often due to the cumulative effects of aging as well as cognitive impairment from stroke, depression, dementia, Alzheimer's disease, Parkinson's disease, etc.
Baby boomers will need to plan for their long-term care needs because, due to the lack of programs funded by the federal and state governments, individuals will likely need to pay for most of their long-term care needs from personal resources. The very nature of long-term care in our society is changing. Medical science is keeping us alive longer and there are fewer early sudden deaths. Fewer deaths mean more prolonged health problems requiring long-term care. In addition, the population of those over age 65 is increasing while the younger segments of our population are not, putting pressure on aging services, especially for long- term care. It is predicted that an aging population over the next 20 years (the baby boomers) will cause a drain on state Medicaid programs, currently the only government source of funding for nursing home care.
Genworth Financial in their 2014 Cost of Care Survey reflects the cost of nursing home care in Florida can easily exceed $80,000 per year. Assisted Living care starts at approximately $36,000 per year, while in-home care can vary from a few hundred dollars a weeks to more than $10,000 per month depending on the level of care required. Many people would be unable to personally pay for an extended period of long term care and some would be unable to even pay for a single month.
The best long term care asset protection defense strategy against the rising cost of long term care is long term care insurance. However, in order to qualify you have to act when you are younger, healthy and don't have a need for the insurance. It's just like life insurance - you can't get it when you need it, you have to plan ahead. Long term care insurance comes with many different features and it is important to work with an insurance professional to guide you through the various options that may be appropriate for your needs and budget. What if you never need it? Then, congratulations! You beat the odds.
Long term care asset protection strategies vary from state to state and also may depend on your marital status. Prior planning is crucial. So is working with a qualified elder law attorney to make sure you have explored all of your options, both legal and non-legal. Don't rely on do-it-yourself strategies or information from well-meaning friends, relatives, or even some financial professionals. This area of planning is just too complex, has too many moving parts and implicates many different areas of the law.