Thinking about a time when we will need help taking care of ourselves is not fun, so most people put off discussing long-term care until it can't be ignored – which is sometimes too late for proper planning. As we enter a new year, it’s a good time to finally stop putting off planning for the future.
This year, make it your New Year’s resolution to put a long-term care plan in place. Planning ahead will save time and money and help ensure your wishes are carried out. To help get you started, here is a checklist of the essential building blocks of a solid long-term care plan:
Power of attorney. Make sure you have an updated durable power of attorney. A power of attorney allows you to appoint one or more people to act for you on financial and legal matters, and a “durable” power of attorney stays in effect in the event of your incapacity. Without it, if you become disabled or even unable to manage your affairs for a period of time, your finances could become disordered and your bills not paid, and this would create a greater burden on your family. They might have to go to court to seek the appointment of a conservator, which takes time and money, all of which can be avoided through a simple document.
Health care proxy and medical directives. Similar to a durable power of attorney, a health care proxy appoints an agent to make health care decisions for you when you can't do so for yourself, whether permanently or temporarily. Again, without this document in place, your family members might be forced to go to court to be appointed guardian. Include a medical directive to guide your agent in making decisions that best match your wishes.
Long-term care insurance. Consider whether to purchase long-term care insurance. Determining whether you need this type of coverage depends, in part, on your financial situation. The cost of a long-term care insurance policy varies considerably, depending on your age when you purchase the policy, the benefit period, and the level of benefits, among other things, but the premiums can be expensive. Therefore, if you have the resources to self-insure your long-term care and still have money left over, you likely don’t need to buy a long-term care policy. On the other hand, if you cannot afford to pay monthly long-term care premiums, you will likely be able to qualify for Medicaid.
Medicaid planning. Take steps to protect your assets in the event you will need to apply for Medicaid. Most people end up paying for nursing home care out of their savings until they run out and then they qualify for Medicaid to pick up the cost. Careful planning can help protect your estate, whether for your spouse or for your children. If you plan far enough in advance, you may have the luxury of distributing or protecting your assets, so that when you do need long-term care, you will quickly qualify for Medicaid benefits.
Family discussion. Sit down with family to discuss your long-term care wishes. Making sure that everyone understands what you want to have happen can help reduce conflict later. The discussion should include where you want to live, how you want to be cared for, how you want your money managed, and what kinds of burial or funeral arrangements you would prefer. These are difficult conversations, but websites like The Conversation Project https://theconversationproject.org can help you get started.
Contact your attorney to begin putting your long-term care pan into place. Don’t wait till next year.
