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Ask the Expert: Is Long-Term Care Planning Worth the Wait?

There is one certainty about life and that, quite simply, is we are all going to die.  It is sad and nobody wants to think about their ultimate demise, however, it is the one undisputable fact we know about living.  We can plan for our life’s end easily by doing basic estate planning such as letting our loved ones know our wishes, creating a will, prepaying for our funerals.  But the other part of life we need to consider that most people tend to not think of is what happens if we become sick before we die.

The number one cause of portfolio erosion is the cost associated with needing intermediate or skilled care assistance if we experience a prolonged illness.  If you are like me suddenly find your aging parents in need of care and without an asset protection plan, you may know exactly what I am referring to.  Caring for the elderly is not only emotionally stressful, but it can be financially catastrophic as well.  Having recently gone through this experience personally and practicing this type of planning professionally for almost twenty years, I have one important recommendation for anyone in their fifties or older – make sure you have an estate planning attorney and that you have this exact discussion with them.

The long-term care industry has changed dramatically as baby boomers have come of age and our population has grown older.  There used to be a time not so long ago when consumers had the ability to insure this type of risk through purchasing insurance that protected their assets.  Given the disparity between the premium dollars collected by insurance providers compared to the benefits these insurers have paid out in claims, the industry has changed drastically and obtaining traditional long term care coverage has become almost impossible.  If you are approved for it the cost can be expensive, so how do we ensure that everything we have worked for is not lost to the costs associated with advanced aging?  We call that estate planning lawyer in our contact list and have a candid discussion with them on how to protect our assets.

Advanced estate planning has become more normalized as the insurance industry has failed to keep up with consumer demands.  I can assure you that the cost you pay for your legal work will always be a micro-fraction of how much you would spend on monthly nursing home bills.  Looking at trust planning in a variety of forms can not only preserve a substantial portion of your assets, but also protect your family from having to make tough decisions about spending money because you have put measures in place to preserve your wealth.

Contingency planning is difficult for many people because we do not want to think of no longer living happy, healthy, and productive lives.  We want to see our children and grandchildren grow and make their way in this world.  We want to experience a life that are truly golden years.  But the cost of not doing this planning and waiting can be enormous. A well-rounded financial advisor will have these discussions with you and encourage you to complete this critically important portion of your long-term financial plan.  They should also facilitate your engagement with an attorney if you do not have one.  Do not delay!  Win the game of financial chess by creating strategies that put the pawns of high cost medical needs in the position of check mate.