The cost of long-term care is not going down.

People are not all powerful.

They cannot stop the steady march of time.

Even making healthy decisions does not stop the aging process.

As people get older, they require more assistance as their bodies begin to fail.

According to a recent The Indiana Lawyer article titled “Economic instability and the need to plan for long-term care,” most people will require long-term care at some point.

Most adults over age 65 will require long-term care at some point.

With about 10,000 baby boomers turning 65 each day, there will continue to be a growing need for these services.

About 70 percent of those ages 65 or older will require long-term care during their lives.

Unfortunately, the cost of these services has and will continue to increase.

A Genworth Cost of Care survey found the costs of long-term care had significantly outpaced inflation from 2004 to 2021.

There are simply not enough workers to keep up with the demand for care.

Are there ways to pay for long-term care without losing all you own and going into debt?

Yes.

These do require advanced planning and action.

Although the ideal option is to purchase long-term care insurance when you are in your 50s and still relatively healthy, some people are not able to do so as a result of chronic health issues.

These people may secure the services of an elder law attorney.

Such attorneys often utilize irrevocable trusts or asset protection trusts to secure the funds.

With these types of trusts, the grantor no longer owns the assets after they have been retitled to the trust.

The trust cannot be amended, modified, or terminated without the approval of the trust beneficiaries.

In addition to removing assets from the name of the grantor, these trusts can minimize taxes.

These trusts must be created by a professionals so principal and income can be assessed.

These trusts should be set up well before a health crisis.

Similar to long-term care insurance, this planning should be completed when a person is still relatively healthy and of sound mind.

Because Medicaid looks into the finances of an individual for five years prior to the Medicaid application, the assets transferred must be made prior to these fives years.

Failing to do so makes a person ineligible for coverage.

The rules regarding Medicaid eligibility are extremely complex and I, professionally and personally, steer clear of advising clients about them.

Any nursing home or assisted living expenses will need to be paid by the individual until they are Medicaid eligible.

Whether through Medicaid planning or through long-term care insurance, people should be prepared for the high cost of assisted living and nursing home care.

Reference: The Indiana Lawyer (Aug. 3, 2022) “Economic instability and the need to plan for long-term care”