Pros To Know: Addressing Long Term Care and Estate Planning

America’s elderly and disabled members face a looming crisis, and it centers on the ever-increasing costs of providing care to those who are unable to care for themselves. For decades, the nation’s politicians, policymakers and economists, along with leaders in the insurance industry, have known that our changing demographics, initiated by our aging Baby Boomers, were leading America toward a Long Term Care (LTC) financing crisis of enormous magnitude. Yet, our leaders have done nothing to ensure that a viable, affordable path exists for retirement security and dignified aging. Instead, millions of our citizens are forced to go broke, spending down their hard-earned life’s savings and selling their homes, to pay for nursing home or other LTC expenses, which typically approach or exceed $8,000 per month.

An estimated 12 million Americans are currently in need of LTC – defined as institutional or home-based assistance with Activities of Daily Living (ADLs). In the next two decades, the U.S. health care system will face a tidal wave of aging Baby Boomers. This, among many other factors, will create an unsustainable demand for LTC in the coming years. Fewer family caregivers, increasingly limited personal financial resources, and growing strains on federal, state, and family budgets will further complicate efforts to organize and finance services. Although there is tremendous variation in what will be needed, 70% of people who reach the age of 65 will require some form of LTC at a point in their lives. Women aged 65 and over will need services for an average of 2.5 years compared with about 1.5 years for men. The number of Americans needing LTC at any one time is expected to double from 12 million today to 27 million by the year 2050. Trying to understand how Medicaid laws and regulations can provide assistance when all your other assets have been exhausted is an overwhelmingly complex proposition.

Only 4 in 10 Americans have an estate plan in place, and many of those have the wrong estate plan. Far too often, mistakes are made that can be easily avoided with the careful guidance of an estate planning professional, such as:

  • Dying Intestate. Dying without a will or other estate plan means that the State or the IRS will simply make one for you, resulting in a probate process that is needlessly time consuming, expensive, public, and frustrating.
  • Having an “I Love You” Will. In many situations, a will simply passes the complex issues and problems associated with transferring and protecting wealth on to the spouse or future generations; it creates more problems than it serves.
  • Giving Property Outright to Children. Countless problems arise when, for example, a child is too immature to handle money responsibly, suffers a severe financial setback, marries a fortune-hunter, or is addicted to drugs or alcohol. You may need to protect your heirs from their own poor decisions.
  • Not Having a Trust. A trust is the single most effective estate planning tool available. There are many types of trusts and in addition to protecting your privacy, a trust will help you leave what you want, to whom you want, in the way you want – a completely customized plan – at the lowest possible cost.
  • Not Funding Your Trust. Establishing trust means re-titling your assets to the trust; otherwise it does no good.
  • Not Having Your Documents Reviewed and Updated. Once the estate plan is put in place it is important to have it reviewed at least every two to three years to keep up with changes in your life and/or the law.
  • Failing to plan for life’s other crises. Additional strategies are important to provide comprehensive protection: Advanced Health Care Directive; HIPAA authorization; a comprehensive Power of Attorney for financial affairs and other vital estate planning tools.

There are resources available that families can use to deal with these deeply complex issues, such as local workshops by legal professionals, available to pre-qualified individuals. These workshops are informative and sign ups are available now, followed by no-obligation personal consultations. With the careful guidance of a qualified Medicaid and estate planning professional, such as Aspen Legacy Planning, one can implement unique planning strategies to preserve his or her hard-earned assets and provide lifetime protection and peace of mind.

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