Livens & Reed, PLLC

Good planning will include ignore long-term care protection

It is difficult to engage people in a discussion of long-term care needs when they are busy making sure that their expenses today and tomorrow do not exceed their budgetary constraints. People in Texas and elsewhere are reluctant to talk about long-term care when those needs seem so far away and possibly unnecessary. However, ignoring long-term care planning can be a devastating mistake under most life outcomes.

The problem does need to be addressed, according to the Department of Health and Human Services (DHHS), which reports that 70 percent of Americans who reach 65 years will need assistance with everyday activities of life. This may be due to a chronic illness or disabling injury, including Alzheimer's, cancer, stroke, diabetes and the like. Despite this authoritative report, less than one-third of Americans age 50 or more have any plans for long-term care.

Additionally, DHHS reported that of the 10 million persons needing long-term care in the country, 37 percent were younger than age 65. We see more and more situations of a long-term disability afflicting someone at an early age and progressing to a more disabling condition later in life. Furthermore, the popular myth that Medicaid will pay for every one's long-term care needs is also false.

A person must be qualified under rigid standards set forth by Medicaid. If long-term care planning has not been done, Medicaid may provide the expenses but the agency may also go forward and seize the elderly person's house or other property. A plan devised in cooperation with an elder law attorney will address those problems before they occur, and will provide for legal methods to save the individual's assets for his or her beneficiaries.

There are options in Texas and elsewhere that can provide a structured response to the needs that may arise for long-term care. There are newer financing vehicles that have been created with focus on the expenses of long-term care. One possibility is an annuity contract. Additionally, long-term care insurance is now available that will provide a cash benefit if long-term care turns out to be unnecessary.

Source: Forbes, "Northwestern MutualVoice: Surprise: You'll Likely Need Long-Term Care", May 11, 2015

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