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How to spend it all and end up in a nursing home - planning for long term care

Estate planning isn't just about wills and trusts. It's also thinking about what would happen if you became mentally disabled during your life time or if you were to end up in a nursing home. Planning for long term care is a different planning and thought process. Planning for long term care means considering all the options for what would happen if you or a loved one needs to spend an extended period of time in a nursing home or needs to move permanently from home to a long term care facility – either assisted living or nursing home.

Your best defense against the rising cost of long term care is insurance. Long term care insurance can help defray the cost of in-home care, assisted living care and nursing home care. The mistake most people make is to believe they will never need long term care or if they do, their family will be in a position to provide care at home. Frequently, people say, “I’ll never go into a nursing home.” Well, never say, “Never.” Visit a nursing home and ask each one of those people whether they ever planned to live in a nursing home. The answer will certainly be a resounding, “No.”

Long term care insurance is like every other kind of insurance – you can’t get it when you need it. You need to get it when you are relatively young, insurable and the premiums are less expensive. That way, when you need it, you’ll have it. What if you never need it? Then, congratulations! You beat the odds. No one ever hopes to need their auto, homeowner’s or life insurance either, but they sure are nice to have when you do.

Work with an insurance professional who has expertise in long term care insurance. There are lots of choices to make and lots of consequences for making the wrong choices. You’ll have to decide on the daily rate, a cost of living adjustment rider, length of time the policy will pay, and death benefit options, just to name a few. There are new products coming onto the market every day, so find a professional who knows and understands how to help you find the best policy.

If you don’t have long term care insurance and you need long term care, there are some common payment sources. Medicare will pay for short term nursing home or rehabilitative care, but not long term care. A Medicare supplement can help defray some of the expenses (most commonly, the co-pay) of a short term nursing home or rehab stay, but again, not for the long term. If you are a veteran and you meet certain service requirements, you may be entitled to assistance under the pension program known as Aid & Attendance. You don’t have to be a retired veteran to qualify, but you do have to meet the prescribed service requirement, be honorably discharged and qualify under income and asset limitations. Personal resources and/or family resources may be another option for defraying the cost of long term care. If your resources are limited and you’ve done proper planning, then Medicaid may provide long term care assistance. Currently, Medicaid is the only government source for long term care available today.

Each state’s Medicaid program is different. Although Medicaid is a federal program, the states have the flexibility to implement the program in different ways. As a result, don’t rely on information from friends or relatives who live in a different state – likely, the rules and the benefits are not the same. Your best source of information for Medicaid planning is a qualified elder law attorney. In Florida, look for someone who is board certified in elder law. In states that don’t have a board certification program, the National Academy of Elder Law Attorneys (NAELA) offers a certification program for Certified Elder Law Attorney (CELA). Certification programs are intended to award those attorneys whose education and experience meet high standards and indicate a high level of dedication to the practice area. Beware of sales people who hold themselves out as Medicaid planning professionals – if they aren’t a qualified elder law attorney, get a second opinion before relying on their advice.

Planning for long term care generally involves a comprehensive review of assets – their nature, value and ownership. Planning options may depend on whether you are a single or married person. Many programs are available only for nursing home care, but some states have in-home care or assisted living programs. In some cases, there may be a waiting list in order to qualify for benefits under one or more programs.

This area of the law is very complex and touches numerous other areas of the law. It is not for do-it-yourselfers as a negative outcome could have a catastrophic result for a loved one requiring long term care.  

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