If you're like many, you may associate long-term care with nursing homes and end-of-life care. But far more people will need long-term care in a crisis—an injury or illness that requires long-term care or rehab before you can live independently again.
And while it's important to make long-term plans for long-term care, crisis planning can be just as crucial when it comes to preserving your assets. Here we discuss three key differences between planning for long-term care and planning for a crisis.
Crisis Planning Requires Flexibility—Long-Term Care Planning Provides It
The unpredictable nature of crises can make them challenging to plan for. But in many ways, the process of planning for long-term care can also help you plan for crisis care. In other words, long-term care planning may involve Plans A, B, and C, while crisis care may require some combination of these plans and strategies. This allows you to borrow what you need and discard what you don't.
Long-Term Care Planning Can Benefit From a Trust
If you're wondering how you'll be able to pay for long-term care for yourself and/or a spouse, you may assume Medicaid is off the table until you've spent down your assets. While this is generally true, there are certain types of trusts that allow you to benefit from the trust income for life without having trust assets "countable" for Medicaid purposes.
Because assets belong to the trust instead of the individual, they're excluded from the Medicaid calculation as long as they weren't transferred within the look-back period. This period is five years in all states (including D.C.) except California, where the look-back period is two-and-a-half years.1
However, not all trusts are created equally. Before you create a trust of your own, talk to your financial professional and an experienced estate planning attorney to make sure the trust you select works well for your needs, assets, and wishes.
Crisis Planning Needs a Strong Network
A key part of crisis planning involves knowing who you can reach out to in times of need—including friends, loved ones, care providers, and even ombudspersons who can help you navigate the health care system. When you're creating your crisis plan, think about who you may be able to lean on.
- Do you have loved ones who live near a care facility who can see you regularly?
- Is there anyone who can transport you to and from medical appointments?
- If you have pets, is there someone nearby who can take care of them or have them boarded until you've recovered?
- Do you have a medical or legal power of attorney that will allow a trusted loved one to make decisions on your behalf and pay bills if you're incapacitated?
By evaluating the strength and skills of your network, as well as the documents you have in place when an emergency occurs, you can gain a far better idea of who you should contact first and rely on in a crisis.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation.
LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.
All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by WriterAccess.
LPL Tracking # 1-05325540.
1 Understand Medicaid’s Look-Back Period; Penalties, Exceptions & State Variances, American Council on Aging, https://www.medicaidplanningassistance.org/medicaid-look-back-period/