When Planning for Retirement, Don’t Forget About Long Term Care Insurance

Roughly 60% of those turning 65 can anticipate using some form of long-term care in their lives, according to the U.S. Health and Human Services Department. Those individuals may be faced with a nursing home, assisted living, or in-home care.  The costs associated with these types of care make elder law planning extremely important.  This is one reason individuals should consider the possibility of long-term care insurance.

CNBC’s recent article, “Not having long-term care insurance can be ‘the single biggest devastator’ of your financial plan,” reports that over 8 million Americans have long-term care insurance. However, the cost of that insurance is rising. The increase is due to several factors, including the fact that companies under priced their policies for years and misjudged how many would drop coverage.  Because of those rising premiums, some individuals may choose self-insurance.  That means saving a pool of money to earmark for long-term care. Coverage is also available through Medicaid, which has eligibility requirements.  Despite these increases, when planning, one should consider purchasing  some form of coverage. This is because not being insured can be the biggest devastator of a financial plan.

The rule of thumb has been to buy LTC coverage at age 55. However, it really depends on your situation. The big unknown is health, and the odds of being able to qualify for coverage at age 60, compared to age 30 or 40, is vastly different.

A traditional LTC policy will cover the costs of care for a certain period of time, generally up to six years. The amount of coverage is based on the average cost of care for your location. Most insurers offer it in the form of a monthly benefit, and possibly with some inflation protection.  There’s also a hybrid policy that covers long-term care costs, but becomes life insurance paid to heirs, if it’s not used. Of the 350,000 Americans who purchased long-term care protection in 2018, 85% chose the hybrid coverage. It’s also called combo or linked-benefit. The big difference between a traditional LTC policy and the hybrid policy is you’ll pay more for the hybrid policy.

The attorneys at Michael T. Huguelet, P.C. would be happy to discuss your options for long term care planning and the benefits of long term care insurance so you have piece of mind that your assets are preserved and left to those who mean the most to you.  If you are looking for long-term care planning in Orland Park, Illinois or the surrounding suburbs of Chicago, please give us a call.

Reference: CNBC (October 14, 2019) “Not having long-term care insurance can be ‘the single biggest devastator’ of your financial plan”

 

Long-Term Care Planning is Important

The expense of long-term care is often astronomical. Many people who end up requiring long-term care initially pay for it out of their own their own assets.  Medicaid is the federal program that assists with healthcare benefits for those who qualify and cannot afford them.  Many people end up accessing Medicaid benefits, after their own assets have been depleted.  The Medicaid program can help with paying for home care, assisted living, and nursing home care, explains Insurance News Net’s recent article, “Medicaid planning.”

Speaking with an elder law or Medicaid planning attorney is a great idea to make sure people can qualify for Medicaid before they completely exhaust their resources.  These practitioners specialize in helping people qualify for Medicaid benefits far in advance of their assets becoming depleted.

For those who are thinking of transferring all of their assets to their children to qualify for Medicaid, the government has already thought of that. If you gift any assets to your children, you may be subject to a penalty before becoming Medicaid eligible. However, there are perfectly legal strategies that a senior can use to become eligible for Medicaid, while still keeping considerable assets.  Assets may be freely transferred between spouses to help gain eligibility for a spouse that needs care.  There are also many assets that are exempt for purposes of gaining eligibility.

With the guidance and planning from qualified legal counsel, seniors who require long-term care can get assistance with their healthcare from the government, while preserving assets for their loved ones.

The attorneys at Michael T. Huguelet, P.C. would be happy to sit down with you and assist with long term care planning so you have piece of mind that your assets are preserved and left to those who mean the most to you.  If you are looking for long term care planning in Orland Park, Illinois or the surrounding suburbs of Chicago, please give us a call.

Reference: Insurance News Net (September 29, 2019) “Medicaid planning”

 

Special Needs Families and Special Needs Trust

If nothing prepares a person for parenting, consider how much harder it is to be prepared to raise a child with special needs. Parents often sink in uncharted waters. It’s not just a matter of negotiating all of the day-to-day details, says Newsday in the article “Be ‘biggest advocate’: Parents plan future for adult children with special needs.” Special needs families need to plan for what will happen as the parents age, become ill or pass away.

As an adult child with disabilities ages, eventually there will be medical issues. If the parents are gone, who will be able to make medical decisions? Where they live, who will oversee their finances and who will be there for them to rely on in a parenting role? There are many questions and they all need answering.

For one family, raising their special needs child was a full-time challenge.  The couple sought out others in their same situation, noting that often even their own family members could not relate to their daily experiences.

Here’s what needs to be top-of-mind when planning for a special needs child:

Don’t wait to plan. Families often think they have time, but you never know when unexpected events occur. Have a plan in place for legal guardianship, finances, and health care.

Work with experienced legal help. You want to work with an attorney who has a great deal of experience and knowledge in special needs law and estate planning.

Stay in control. When children turn 18, they are adults. Parents and guardians will need to go through court to become the child’s guardian. Unless that is done, the parents and guardians will have no legal rights about the child’s medical, financial or other affairs. A successor guardian also needs to be named, so that when the parents are no longer able to serve, someone is in place to care for the child.

Create a Special Needs Trust. An attorney with experience in special needs planning will be able to work with the family to create and structure a Special Needs Trust (SNT). A disabled person may not earn enough to support himself, or the caregiver who remains at home to care for them and care-related expenses. The SNT helps to meet current needs and plan for future needs. The SNT is used to preserve eligibility for any means-tested state and federal benefits. It allows the individual to have a better quality of life, by providing for expenses that are not covered by their benefits.

It’s very important that no assets be left to the child in an inheritance. Any assets must be placed in the SNT. A well-meaning relative could put any eligibility for aid in jeopardy.

Parents and guardians also need to name a trustee and a successor trustee of the SNT. The person needs to be competent, good with money management, organized and focused on caring for the loved one. It cannot be an emotional decision.

Parents of special needs children are advised to create a Letter of Intent, a narrative that outlines their child’s likes and dislikes, strengths and weaknesses, activities and friends they enjoy and other details that will help them to continue an enjoyable life when their parents are gone.

Parent’s own estate planning must be done with an eye to maintaining the SNT and caring for their other children. This is a case when assets need to be distributed in a realistic and fair manner. Don’t wait until it is too late. Let our experienced Frankfort, IL estate planning attorneys help you plan for your family’s future.  Book a call!

Reference: Newsday(May 9, 2019) “Be ‘biggest advocate’: Parents plan future for adult children with special needs.”