Overview

Rating: +0

People over the age of sixty-five years of age represent the fastest growing age group in the country. It has been estimated that two out of every five people over the age of sixty-five years will enter a nursing home. Nursing home expense can be financially devastating. Proper planning for long term care is critical today.

The cost of long term care can be very expensive. In addition to using your assets and savings to pay for the cost of long term care there are other alternatives which include:

Long Term Care Insurance: More and more this insurance is becoming a viable alternative for people with significant assets which they wish to protect from depletion. Individual policies sold in Massachusetts must meet stringent coverage requirements which are protective of consumers. In addition, under a special provision of Massachusetts law the state will not place a lien on your home if you require Medicaid after the coverage of a qualifying policy is exhausted. Anyone considering long term care insurance should contact an insurance agent experienced in this area.

Medicaid: This is a joint federal and state program that pays for the cost of long term care for people who meet its economic and other guidelines. Planning for Medicaid is quite complicated. An experienced lawyer should be consulted.

Single Premium Life Insurance: A life insurance policy may be purchased with a single large premium payment that has as a provision of the policy the ability to tap into the death benefit during your lifetime if needed to pay for long term care. It is usually advisable to have the insurance held in an irrevocable life insurance trust so that if the insured dies without having tapped into the policy, it will not be subject to estate tax. An advantage of this type of planning is that if you never tap into the policy during your lifetime, the proceeds are available as an asset to your beneficiaries. With long term care insurance, if you never require long term care, you and your beneficiaries receive no cash benefit from the premiums.

Viatical Companies: Companies now exist that will buy your life insurance policy during your lifetime and pay you close to its death benefit to use for long term care costs.

Long term care planning is complicated but necessary. If you are considering such planning you should consult your lawyer and financial planner.

Planning for long term care is a complicated task. The earlier a person plans, the more options are available. This area of the law varies from State to State and is often changed. This memorandum contains general information regarding long term care planning that, although helpful, must be discussed with a lawyer trained in this specialty of the law in your location.