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Planning for long-term care

Home Estate Planning Planning for long-term care

  • Avatar patsnation 
    Participant
    Status: Other Professional
    Posts: 5
    Joined: 09/18/2016

    Hi all-

    Working on estate planning with my Mother and trying to figure out the best method to protect her wealth. We lost my Grandfather’s entire inheritance to nursing home bills about 10 years ago.  He had Alzheimer’s and was in long-term care for almost 8 years before he passed on.  Its made all of us a little more aware of planning…he flat out refused to sign a living will or plan and we all paid for it.  My mother has about 1.5 million in assets including her home and a  very good pension (~75k per year in income….meaning she uses almost none of her investments in retirement).

    I have been trying to look into trusts vs long-term care insurance vs living wills….but I have minimal to no experience in this arena and I’m not sure what would be the best path for her to take. Her CFP has advised long-term care insurance, but I wanted to see what other people were doing to protect themselves.

    Thanks!

    #26580 Reply
    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 7307
    Joined: 01/09/2016

    Was this your mom’s father? If so, that increases her chances of having Alz, also – is that correct? This article on long-term care options may help: Should You Buy Long-Term Care Insurance?

    A living will is a revocable trust and will not protect assets from Medicaid.

    Make sure the CFP is fee only. If so, (s)he should be a great resource to help you evaluate the strength of various LTCI policies.

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~ 270-247-0555
    https://fox-cpas.com/for-doctors-only/

    #26609 Reply
    childay childay 
    Participant
    Status: Physician
    Posts: 846
    Joined: 01/09/2016

    $75k per year will pay for most of the nursing home cost.. how old is she?

    #26617 Reply
    Avatar patsnation 
    Participant
    Status: Other Professional
    Posts: 5
    Joined: 09/18/2016

    Thanks for replies.  Yes, my grandfather was my Mother’s father which is why we know she is high risk to potentially need care. She’s currently 61 years old.  When my grandfather was in a home we were paying closer to 120k a year for his care…although I do live in pricey New England which likely affects that.

    #26634 Reply
    askloff askloff 
    Participant
    Status: Financial Advisor, Insurance Agent, Small Business Owner
    Posts: 1
    Joined: 09/24/2016

    When you speak with an estate attorney and elder law attorney, please ask them about how a trust can protect assets away from your mother’s state’s Medicaid program.  Please understand what limitations Medicaid places on the types of care (i.e.: home care and assisted living facility care) it will pay.

    Newer Long Term Care Insurance (LTC) policies can be Partnership Program certified – allowing you to protect your assets away from Medicaid without a look-back period.  We published an article on The Florida Long Term Care Partnership Program, since the guidelines are the same in almost all states (except: CA, CT, IN and NY – where we have published unique articles).

    LTC Insurance policies with lifetime benefits (that can be still be purchased today), insure against the risk of a long and expensive claim (e.g.: Alzheimer’s disease).  The policies also give the flexibility to choose the location of care (i.e.: home care and assisted living facility care).  We published an article that compares insuring with LTC Insurance versus self-insuring.  We provided an example of premiums and benefits for Long Term Care Insurance. Please see this article Insure of Self-Insure for Long Term Care.

     

    Aaron Skloff, AIF, CFA, MBA
    CEO – Skloff Financial Group
    Phone:  908-464-3060
    http://www.skloff.com

     

    #26645 Reply
    Liked by askloff
    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 7307
    Joined: 01/09/2016

    Why don’t you list the companies offering unlimited benefits and the premiums….

    Click to expand…

    ADV part II, AUM fees on page 6.

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~ 270-247-0555
    https://fox-cpas.com/for-doctors-only/

    #26690 Reply
    hatton1 hatton1 
    Participant
    Status: Physician
    Posts: 2910
    Joined: 01/11/2016

    Usage
    9%: Percentage of adults over age 65 experiencing difficulty with self-care, 2013.

    15%: Percentage of adults over age 65 who experience difficulty living independently, 2013.

    44%: Percentage of men who will need long-term care.

    58%: Percentage of women who will need long-term care.

    0.88 years: Average duration of nursing-home stay for men.

    1.44 years: Average duration of nursing-home stay for women.

    22%: Probability of needing more than one year in a nursing home, men.

    36%: Probability of needing more than one year in a nursing home, women.

    2%: Probability of needing more than five years in a nursing home, men.

    7%: Probability of needing more than five years in a nursing home, women.

    11%: Percentage of the population age 65 and older that has Alzheimer’s disease.

    5.4 million: Number of Americans who have Alzheimer’s diseases, 2016.

    13.8 million: Projected number of Americans who will have Alzheimer’s disease by 2050, barring the development of a medical breakthrough.

    50.4%: Percentage of nursing-home residents who have been diagnosed with Alzheimer’s or some form of dementia.

    Cost of Care
    $17,680: Median annual cost for adult day care (five days/week), 2016.

    $43,539: Median annual cost for assisted-living facility, 2016.

    $82,125: Median annual nursing-home cost, semiprivate room, 2016.

    $92,378: Median annual nursing-home cost, private room, 2016.

    $164,250: Average annual nursing-home cost, private room, Manhattan, 2016.

    $63,875: Average annual nursing-home cost, private room, Monroe, Louisiana, 2016.

    3.5%: Five-year annual inflation rate in nursing-home costs, private room, 2016.

    22%: Percentage of long-term care costs that are paid out of pocket, 2013.

    13.2%: Percentage of people who receive professional home healthcare who have long-term care insurance coverage, 2010.

    $5,518: Median total household wealth for people who have lived in a nursing home for six months or more.

    $0: Median housing wealth for people who have lived in a nursing home for six years

    #26694 Reply
    hatton1 hatton1 
    Participant
    Status: Physician
    Posts: 2910
    Joined: 01/11/2016

    nsurance
    8%: Percentage of all long-term care delivered in the U.S. that is covered by long-term insurance.

    13%: Percentage of single individuals over 65 with long-term care insurance, 2014.

    $8.15 billion: Amount of long-term care claims paid out in 2015.

    19.6%: Increase in short-term care insurance sales in 2015 relative to 2014. (Short-term care insurance policies cover periods of one year or less.)

    17%: Percentage of applicants ages 50-59 denied long-term care coverage due to health issues.

    45%: Percentage of applicants ages 70-79 denied long-term care insurance due to health issues.

    $3,560: Annual premium for a “best-quality” long-term care policy for a married couple, both age 60, 2016.

    $2,035: Annual premium for a “best-quality” long-term care policy for a single man, age 55, 2016.

    $2,580: Annual premium for a “best-quality” long-term care policy for a single woman, age 55, 2016.

    -1.9%: Decrease in initial premium amount for a “best-quality” long-term care policy for a single man, age 55, between 2015 and 2016.

    7%: Increase in initial premium amount for a “best-quality” long-term care policy for a single woman, age 55, between 2015 and 2016.

    83%: Average premium increase for all of the federal government’s long-term care insurance policies (offered to federal government workers and retirees), 2016.

    #26695 Reply
    hatton1 hatton1 
    Participant
    Status: Physician
    Posts: 2910
    Joined: 01/11/2016

    All of these stats are from Morningstar.  I plan to self insure.  The stats on the average length of stay are very reassuring.  Since I live in the South even a private room is not too bad at $63000.  Patsnation perhaps you should try to get your mom to move to a lower COLA area. Her pension would cover her in many areas of the country.  If her pension or part of it is inflation indexed she would be ok in some areas and never tap her nest egg.

    #26696 Reply

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