ESTATE PLANNING: Another Important Family Discussion – Long Term Illness and Care
Some families talk and others don’t. Sometimes, it is the kids who don’t want mom or dad to talk about estate planning issues – they cannot face the fact that some day mom and dad won’t be here. Other times, it is the parents who cannot discuss the future.
Either way, there are certain issues that need to be addressed. One of them is long term care.
We are living longer. That is both the good news and the bad. We all would like to live to a ripe old age and be healthy until we draw our last breath. Unfortunately, that is not the case for many of us.
What is your plan for getting older? Where will you live when you can no longer live alone? What is the plan for a long-term illness?
In many families, the unspoken plan is for one of the family members to care for mom and/or dad until their dying days. For some families, this is a realistic plan as there are children who are able and willing to care for mom and/or dad in this way.
There are other families in which mom and dad state that they are never going into a nursing home, yet, there is no plan for care. This must be addressed by the family.
If you do not want to go to an assisted living facility or later to a nursing home, are there family members who will actually care for you? Have you discussed this with your children? Or are you assuming that because you cared for your parents, your children will care for you?
Do your children work full-time? That could impact their ability to care for you. Caring for aging parents often comes at the same time that families are putting children through college. Quitting work to care for a parent may not be realistic or possible.
If you do not expect family to care for you, are you acquainted with the costs of assisted care? Of nursing home care? Assisted living can cost $3,000 to $4,000 per month. This is a cost that is not covered by Medicare or Medicaid. It is direct pay. Could you afford $36,000 to $48,000 per year for assisted living?
If your health deteriorates, you may need nursing home care. Medicare pays only for a limited number of days after discharge from a hospital. Thereafter, it is the patient’s responsibility to cover the costs. If you have long term care insurance, the cost may be covered. If not, you will quickly spend your accumulated savings.
If you are a couple, there is some ability to save a portion of the marital estate for the benefit of the non-institutionalized spouse. Currently, in Michigan, that community spouse may keep the marital home, an automobile and approximately $123,000. The balance must be spent down prior to qualifying for Medicaid.
These financial issues are why it is necessary to have a plan. Have a conversation with your family to see where everyone stands on this issue. Then develop a strategy.