By Michael Whitney, Barbara Moss, and Harry Perret
We do need to plan for a long life. Since the 1950s, average life expectancies have increased to 80 years.
We help people plan for income, housing, healthcare, chronic conditions, and long-term care. How will you answer these questions for yourself or for a loved one?
- Legal services—what documents do I need, how does Social Security work, should I take steps to qualify now or in the future for Veteran’s benefits or TennCare?
- Healthcare and long-term care (LTC)—how will I find and pay for healthcare and pay for long-term care. Where should I live; how will I manage a chronic condition?
- Advocacy—what if my family isn’t getting along, what if I’m being taken advantage of?
What’s Your Plan?
Do you feel you are going to live a long life? Do you agree that the longer you live, the greater likelihood your health could become compromised, and you may need some kind of extended care? Are you sure that your home will always be the right place for you? If you needed care, would that have an impact on those you love?
What are Your Concerns?
It can be overwhelming to confront the future. How will I access quality healthcare? How will I be able to pay for long-term care? How can I continue to live independently? How can I maintain mobility and control over decision making? Can I still leave a legacy for my loved ones?
What will the government pay for: Medicare vs. Medicaid?
Medicare only covers a maximum of 100 days of skilled care after a 3-day hospitalization. It is designed to pay for severe, short-term illness only.
Medicaid (called “TennCare” here in Tennessee), is a program for people who qualify and not just those who are impoverished. There are protections, for a spouse at home for example, that have been around since the 1980’s and are little understood. In addition, if you have a life expectancy of greater than 5-years, sophisticated planning can preserve some, if not all, of your assets.
What is Long-Term Care?
Long-term care involves help with activities of daily living (“ADLs"). You can receive that help at home, in adult day services, or as a resident in assisted living facilities or skilled nursing facilities. Long-term care is not simply nursing home care.
Why is Planning Important?
Not having a plan is the default. I will self-fund from my own assets, so which asset should I use first? Retirement planning is income planning AND protecting against the unexpected. A single long-term care event can become the biggest potential risk to our portfolio. For some of us, this is the time to consider having a partner to help cover the costs in a tax-efficient manner.
Private Long-Term Care Options That Provide Answers:
- Standalone LTCi: Smaller annual premiums provide a greater benefit pool when care is needed
- Linked-Benefit Life Hybrid: The leveraging power of existing assets is in the LTC benefit pool – LTC is the key reason for purchase; legacy assets are a secondary benefit
- Linked-Benefit Annuity Hybrid: Leveraging an annuity for multiplied value in an LTC benefit pool; if LTC is not need the annuity benefit remains
- Accelerated Benefit Life: Life insurance is the key driver in this concept – access to the death benefit as a living benefit covers care expenses
Life Care Planning:
- Legal Planning: Powers of attorney, wills, revocable trusts, irrevocable trusts, qualifying for VA Benefits or Medicaid now or in the future.
- Care Coordination: Having a care coordinator who can navigate finding care and housing
- Advocacy: Having a law firm to advocate for you or a loved one
Care and Housing Can Be Expensive:
Since the cost of care is always rising, what seems like a reasonable amount of long-term care coverage insurance today may not be sufficient for future care needs. Today’s products include additional leverage, riders or return-of-premium guarantees. A long-term care policy is an asset, not an expense – it creates pool of tax-free benefits. Some coverage is better than none. Having a plan may free up some assets to pass on to a charity of your choosing.
It is truly hard to talk about aging, diminished capacity, and death. We are good at pretending that we are never going to die and there is no chance we will become disabled. But we know, in the back of our minds, what the reality is. In our practices, we pull aside the curtain for a minute, do some planning, and provide people with peace of mind.
Submitted by: Michael F Whitney, MBA, CRPC® Wise Family Wealth, LLC, Barbara Moss Esq. Elder Law of Nashville PLC, Harry Perret, The Oak Tree Advisors. All are members of the Jewish Federation of Nashville Professional Advisory Council (PAC). For more information about the PAC members and upcoming seminars on May 11, contact Eric Stillman at firstname.lastname@example.org.