Does Life Care Planning Take the Place of Public Benefits?
One of the biggest mistakes people make when preparing for the future is not considering what might happen if they need long-term care. Many people work hard through the years to establish well-funded retirement savings or to build wealth they hope to pass on to future generations. However, if long-term care or other medical needs become a factor in later years, those savings can be used up in just a few years—even if you have hundreds of thousands of dollars put away.
Life care planning works alongside other efforts, including Medicaid planning, to help protect assets for the future while also ensuring individuals have access to public benefits when they need them.
Life Care Planning to Support Future Needs
Life care planning considers more than medical or care needs. It is a big-picture approach to the future that works well alongside other planning considerations, including traditional estate planning. When you work with an experienced life care planning team, you gain an understanding of what decisions you may need to make now and what tools you can put in place to ensure your decisions are followed later.
This process also works to consider what potential future needs you might have and how those needs can be met via a variety of financial and legal tools. Some examples of things you consider through the life planning process can include:
- Whether you currently have a life-altering diagnosis such as cancer or Parkinson’s that should be considered when planning for the future
- The chances that you might face such a diagnosis later in life and how you can plan proactively without making decisions that tie up assets or diminish your quality of life now due to unnecessary “what if” worries
- Whether long-term care insurance and other such products are right for you and how best to invest in those coverages
- How you can protect retirement savings and other assets in light of a variety of scenarios that may occur later in life
- What community and public resources you might need to access later in life, what benefits they might offer, and whether you will be eligible for them
- The role that your loved ones will play in your future, including what type of care they might be willing and able to provide and what type of assets you want to protect to pass on to them
- What you want to happen to you in certain cases, such as if you are ever medically incapacitated, and who you would like to have the legal power to make healthcare decisions on your behalf
Ensuring You Have Access to Public Benefits When Needed
While life care planning can reduce your reliance on public benefits, it is not meant to fully replace the possibility of using those benefits. In fact, comprehensive life care planning can involve thinking about and planning for potential outcomes that require the use of benefits from programs such as Social Security, Veterans Affairs, or Medicaid.
For example, part of life care planning may consider how to protect future Medicaid eligibility while also reducing your overall loss of assets. If at any time in the future you require nursing home care or want to live in an assisted living community, for instance, you will be facing some large expenses.
According to Genworth’s Cost of Care Survey, the average cost in the United States for a private room in a nursing home is around $9,000 per month. That is $108,000 per year and does not cover a lot of other medical costs that might be relevant. Unfortunately, Medicare and other health insurance programs do not cover all the costs associated with this type of care, and many people end up exhausting their savings and spending down their assets before Medicaid kicks in to cover care.
Proactive life care planning helps ensure access to public benefits if you do need them in the future.
Protecting Assets for Your Family When Possible
Big-picture life care planning that starts early can also include asset protection. For example, in some cases, you may be able to protect some of your assets in a trust. When assets are held in the right type of trust, their values are not considered when evaluating your financial situation for Medicaid eligibility purposes.
Transferring assets in any way should be done carefully and proactively. It is generally better to do this type of work well before you might need care or public benefits, as you may run into delays and issues if you transfer assets just before applying for benefits.
Get a Big Picture Understanding of Life Care Planning
The relationship between life care planning and access to public benefits programs is complex. The best decisions in each case depend on many factors, including the age of the individual as well as their goals for the future and personal financial situation.
To find out more about life care planning and work with a team that takes a big-picture approach, reach out to Bratton Estate and Elder Care Attorneys. Make an appointment today by calling 856-770-2744.