LONG TERM CARE PLANNING

CURTIS J. FORD ILLINOIS ATTORNEY

“When you sit down to create your estate plan your primary objective will likely be to ensure that your estate assets are

handled according to your wishes when you die.”

Why It Should Be Part of Your Estate Plan

Long Term Care Planning – Why It Should Be Part of Your Estate Plan? www.nashbeanford.com 2

When you sit down to create your estate plan your primary objective will

likely be to ensure that your estate assets are handled according to your

wishes when you die. A comprehensive estate plan, however, can

accomplish much more than simply creating a roadmap for the division of

estate assets. One addition to your estate plan that you may not have

considered making is long-term care planning. As you age though, the

odds of spending time in a long-term care facility dramatically increase.

The cost of that care can wipe out a lifetime of working, saving, and

investing if you failed to plan ahead. The good news is that by

incorporating long-term care planning into your overall estate plan you can

protect yourself and your assets.

Long Term Care Planning – Why It Should Be Part of Your Estate Plan? www.nashbeanford.com 3

FACTS AND FIGURES

In order to understand why long-term care planning should be included in

your estate plan, consider some of the following facts and figures:

The average American female lives to age 81

The average American male lives to age 76

In 2050, experts estimate there will be 19.4 million people in the U.S.

over age 85

In 2050, those same experts estimate that 27 million people will need

long-term care

You stand a 1 in 5 chance of suffering a disability that requires long-

term care prior to reaching retirement age.

75 percent of people who live to age 65 will go on to need long-term

care

1 in 3 seniors dies suffering with Alzheimer’s or another dementia

disease

The average cost of a year stay at a nursing home in Illinois is

$62,050 for a semi-private room and $74,643 for a private room.

The average length of a stay in a long-term care facility is 2.5 years

The average long-term care insurance policy costs $128-$216 per

month in Illinois for someone aged 52-60.

PAYING FOR LONG-TERM CARE

At an average annual cost of around $70,000 and an average length of

stay of 2.5 years, the average stay in a long-term care facility will cost you

$175,000. If you have worked hard all of your life, saved diligently, and

Long Term Care Planning – Why It Should Be Part of Your Estate Plan? www.nashbeanford.com 4

invested wisely, you undoubtedly don’t want to see the results of your

working, saving, and investing disappear because of a long-term care bill.

Sadly, that is precisely what could happen.

People frequently don’t realize until it is too late that their health insurance

policy does not cover long-term care. Relying on Medicare after retirement

won’t work either as Medicare doesn’t cover long-term care costs. You

could purchase long-term care insurance – if you can afford it. Long-term

care insurance is expensive though, averaging over $2,000 a year in Illinois

before you reach retirement age and the premiums will only increase in

most cases. For most people, the only real option is Medicaid. Fortunately,

the Medicaid program does cover the costs associated with long-term care.

Long Term Care Planning – Why It Should Be Part of Your Estate Plan? www.nashbeanford.com 5

MEDICAID ELIGIBILITY

While Medicaid covers long-term care expenses, you must first qualify for

Medicaid benefits. The Medicaid program has very low income and assets

limits. For age based Medicaid the value of your countable assets cannot

exceed $2,000 if applying as an individual and $3,000 if you live with a

dependent. If your assets exceed the asset limit you must “spend-down”

your assets before qualifying for Medicaid benefits. In essence, you must

deplete your life savings before Medicaid will help pay for your long-term

care costs.

MEDICAID PLANNING

You may have heard the

term “Medicaid planning”

before and wondered why

someone needs to plan for

Medicaid. Now you know –

to qualify for assistance

paying for the often

exorbitant costs of long-

term care. Planning is

required because the Medicaid program uses a five year “look-back” period

when evaluating an application for benefits. Any asset transfers made

during the look-back period will likely be disregarded by the Medicaid

program, meaning the value of the asset will be added back into your

estate for purposes of determining eligibility for benefits. Therefore, simply

Long Term Care Planning – Why It Should Be Part of Your Estate Plan? www.nashbeanford.com 6

transferring assets into a family member or loved one’s name just prior to

applying for Medicaid is not an option. Medicaid planning, however, when

started early is a perfectly legal and highly successful option when

accomplished with the assistance of an experienced estate planning

attorney. Medicaid planning protects your hard earned assets and ensures

that you will receive the care you need when you need it.

The need for long-term care planning should be clear by now. If you have

yet to consider long-term care planning as part of your comprehensive

estate plan now is the time to do so. Consult with your Illinois estate

planning attorney as soon as possible to ensure that both you and your

assets are protected.

REFERENCES

American Association for Long-Term Care Insurance, Illinois Long-Term

Care Insurance Reported

LongTermCare.gov, LTC Path Finder

National Care Planning Council, Guide to Long Term Care Planning

Mayo Clinic, Long Term Care: Early Planning Pays Off

Alz.org.,Alzheimer’s Facts and Figures

Long Term Care Planning – Why It Should Be Part of Your Estate Plan? www.nashbeanford.com 7

About the Author

Curtis J. Ford

Curtis J. Ford is a partner in the law firm of Nash Nash Bean & Ford, LLP. His practice focuses on Elder Law issues, including Long Term Care and Medicaid Planning, Estate Planning and Real Estate. Mr. Ford has had tremendous success in helping families preserve a legacy for their children.

www.nashbeanford.com

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Moline 5030 38th Avenue, Suite 2 Moline, IL 61265 Phone: (309) 762-9368 Fax: (309) 944-3960