It may not be the most pleasant thought, but there is a significant chance that you may need long-term care during your final years. As lifespans have increased over the past decades, so has the likelihood that the average American adult will need assistance to maintain their quality of life during their golden years. 

One of the best gifts you can give your future self is to prepare for these potential needs in advance. You can accomplish this through a comprehensive estate plan. Below, we discuss why the need for care has increased and ways to prepare for any eventual care needs during the estate planning process. 

What Is Long-Term Care (LTC)

Long-term care is an umbrella term that refers to many things. It may be as simple as having someone come by to do chores you can no longer manage or as complex as moving to a nursing home with specific medical professionals on staff. As long as a person’s need for care is ongoing for more than a few months, it is considered a long-term need. Common types of LTC include:

1. Home Care: Care provided at home by licensed healthcare professionals or family members, which can include medical treatment, personal care, and daily activity assistance. Costs vary based on the type and frequency of care but can range from $25 to $50 per hour for professional caregiving services.
2. Assisted Living Facilities: Residential settings that offer personal care services, health care, and activities in a community environment. They are suitable for individuals who need some level of support but do not require the intensive medical and nursing care provided in nursing homes. Monthly costs can average between $3,000 to $6,000, depending on location, amenities, and level of care provided.
3. Nursing Homes: Facilities that provide the highest level of care for older adults outside of a hospital, offering medical care, nursing care, meals, and activities within a highly structured environment. These facilities are the most expensive, with costs potentially exceeding $7,000 to $10,000 per month for a semi-private or private room.

Likelihood of Needing Long-Term Care

The need for all forms of long-term care is on the rise nationwide. According to studies, about 70% of people turning 65 can expect to use some form of long-term care during their lives.

The most obvious reason is that people are simply living longer. As people age, a natural consequence is that specific tasks become more difficult. Aging often leads to health concerns like arthritis that can limit mobility, making tasks like maintaining a yard, cleaning a kitchen, or even getting dressed more difficult. Older adults with these issues benefit from receiving dedicated care to help them keep their quality of life. 

Other issues are also linked to aging. For instance, people with memory problems or dementia may not be able to make their own decisions or safely care for themselves. Similarly, lifelong health problems like heart conditions or diabetes may worsen with age, requiring more constant monitoring and treatment to ensure they do not develop life-threatening complications. For all these reasons, it is more likely than ever that you may need ongoing help once you are older.

Assessing Your Potential LTC Needs

Every person faces different challenges as they age. Some people find mobility to be their greatest challenge, but their minds remain sharp, while others stay mobile and face cognitive difficulties. Even the specific age when people may start to need extra assistance varies. 

This can make planning for long-term care more complicated, but there are ways you can assess the care you may need in the future. The two biggest factors that can help you determine what to plan for include:

1. Personal Health Assessments: Get regular health check-ups to monitor chronic conditions or potential health issues that might require long-term care. Take the time to understand personal risk factors such as mobility limitations, cognitive impairments, or chronic diseases like diabetes, heart disease, or Alzheimer’s disease.
2. Family History: Review family health history to identify patterns that might predict your own care needs, such as hereditary conditions or typical longevity. Consider how family members have dealt with aging and long-term care, including any genetic illnesses.
3. Family Circumstances: Open conversations about your long-term care preferences, discussing scenarios where you might need help. Establish who in the family might be willing and able to assist with your care or how external care will be coordinated and funded.
4. Healthcare Providers: Consult with your primary care physician or specialists to understand your health prognosis and how it might impact your long-term care needs. Getting professional advice on preventive measures and lifestyles can help you minimize future dependency on long-term care services.

Based on these discussions and evaluations, you can draft a care plan that addresses potential needs ranging from minimal assistance to full-time care. This proactive approach not only prepares you and your loved ones for future needs but also helps in managing the financial aspects more effectively.

Financial Planning for Long-Term Care

Proper financial planning for long-term care often involves preparing a variety of payment approaches. This multifaceted approach ensures that individuals can secure the necessary care without compromising their financial stability or burdening their loved ones. Common sources of financial support during LTC include:

1. Personal Savings and Assets: Most people use savings, retirement accounts, and other assets to fund long-term care, at least in part. You may also consider the liquidation of assets such as property or investments if more substantial funds are needed.
2. Long-Term Care Insurance: You might purchase insurance specifically designed to cover long-term care expenses. Policies typically cover care not provided by health insurance, Medicare, or Medicaid, with varying terms and benefits that can be tailored to personal needs and budgets.
3. Hybrid Life Insurance Policies with Long-Term Care Riders: Combining life insurance with long-term care benefits allows policyholders to use the death benefit as a living benefit to pay for long-term care. These policies can be more flexible, providing a death benefit to heirs if the long-term care benefit is not fully used.
4. Government Programs: Medicare generally covers short-term nursing home stays or limited home health care following a hospitalization. It does not cover custodial care, which is the most common form of long-term care. Meanwhile, Medicaid offers the most comprehensive long-term care coverage for those who qualify, covering aspects like nursing homes and some in-home care services. 
5. Veterans Benefits: Veterans and their spouses may be eligible for benefits that include long-term care through the Department of Veterans Affairs (VA), such as the Aid and Attendance benefit.

Early planning can significantly affect the affordability and availability of options like long-term care insurance or hybrid policies. Understanding eligibility requirements for government assistance programs is crucial, as planning often involves structuring finances and assets to qualify for aid.

Legal Instruments for Long-Term Care Planning

Regardless of the type of ongoing care, you may need in the future, you can prepare for it today. Estate planning is the process of developing documents that will ensure your wishes are respected, both after your passing and if you become incapacitated. You can use your estate plan to generate the following documents to ensure you receive the care you want and that your assets are protected. 

Draft an Advanced Health Care Directive

An advanced health care directive is the term used by the state of California to refer to what is commonly known as a living will. In your advanced health care directive, you can explain the type of care you would prefer to receive in different circumstances. This may include specifying whether you want to be placed on a ventilator, what kind of medications and lifesaving treatment you do or do not want to receive, and other medical details if you cannot make your own decisions. 

Assign a Power of Attorney

Power of attorney documents let you name your agent or attorney in fact for financial or medical matters. Your agent with the financial power of attorney will have the right to manage your assets if you are incapacitated. Meanwhile, your medical agent will be allowed to make healthcare decisions on your behalf in similar circumstances. 

Create a Trust

Trusts allow you to protect your assets and ensure they are granted to the correct recipients. With appropriate legal guidance, you can create a trust that will protect your most important assets if you require long-term care and cannot manage them yourself. The person you name as a trustee will be responsible for ensuring the assets are handled according to your wishes. 

Prepare Your Estate Plan With Expert Guidance

It is best to prepare for the potential need for long-term care long before it is necessary. The expert attorneys at The Dayton Law Firm, P.C., can create an estate plan that will protect you, your family, and your property if you are unable to make decisions or need ongoing care. You can learn more about the benefits of an estate plan for long-term care and how we can assist you with drafting the necessary documents by scheduling your consultation today.