Considerations for Long-Term Care Planning

Protecting Your Wealth from Medicaid Spend-Down  

One of the primary reasons to develop a long-term care strategy is to prevent losing your assets to pay for care. Without proper planning, you may be forced to spend down your savings and liquidate assets to qualify for Medicaid coverage of long-term care services. This process, known as Medicaid spend-down, can quickly deplete wealth you've worked hard to accumulate over your lifetime.

By implementing long-term care planning strategies early, you can protect more of your assets and have greater control over how they are used. Some options to consider include:  

• Long-term care insurance policies to cover care costs
• Irrevocable trusts to shield assets from Medicaid spend-down  
• Strategic gifting of assets to family members
• Converting countable assets to non-countable assets
• Medicaid-compliant annuities  

The key is to put protections in place well in advance of needing care, as Medicaid has a five-year lookback period for asset transfers. Working with an elder law attorney or financial advisor experienced in long-term care planning can help you develop the right strategy for your situation.  

Unique Considerations for Women  

Women face some distinct challenges when it comes to long-term care planning that make it especially important to have a solid strategy in place:

• Longer life expectancy: On average, women live about 5 years longer than men. This means a higher likelihood of needing long-term care services at some point.
• Higher rates of disability: Women are more likely than men to develop disabilities or chronic health conditions that require long-term care.
• Greater chance of living alone: Women are more likely to outlive their spouses, potentially leaving them without a caregiver at home.
• Lower retirement savings: Due to wage gaps and time out of the workforce for caregiving, women tend to have less saved for retirement on average.
• Higher long-term care costs: Because women tend to live longer, their lifetime long-term care costs are often significantly higher than men's.  

These factors make it even more crucial for women to plan ahead and consider options like long-term care insurance to help cover potential care costs down the road. Starting to save and plan early can make a big difference.   

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Planning Implications for Singles and Those Without Family Nearby  

If you're single or don't have family members living close by who could potentially provide care, long-term care planning takes on added importance. Some key considerations include:

• Designating a health care proxy: Choose someone you trust to make medical decisions on your behalf if you become incapacitated. This could be a close friend, more distant relative, or even an attorney.
• Creating an advance directive: Document your wishes for end-of-life care to ensure they are followed.
• Building a support network: Cultivate relationships with friends, neighbors, and community members who could potentially assist with care needs.
• Researching care options: Familiarize yourself with home care services, assisted living facilities, and nursing homes in your area so you know your options. 
• Considering long-term care insurance: Without a spouse or children to provide care, insurance can help cover professional care services.
• Setting aside more savings: You may need to budget for higher out-of-pocket care costs without family assistance.
• Exploring aging-in-place modifications: Look into home upgrades that could allow you to stay in your home longer if that's your preference.  

The key is to be proactive in planning for your care needs rather than leaving things to chance. Meet with a financial advisor and elder law attorney to discuss the best ways to protect your assets and ensure you'll have the care you need as you age.

While long-term care planning involves considering some difficult "what-ifs," having a strategy in place can provide invaluable peace of mind. You'll know you've taken steps to protect your wealth, expand your care options, and maintain more control over your future.  

Don't put off this crucial planning - the sooner you start, the more options you'll have available. At WHZ Strategic Wealth Advisors, we're here to help ensure you have the best plan for long-term care and all your financial needs, giving you “Absolute Confidence. Unwavering Partnership. For Life.” Visit our website to schedule your complimentary consultation or give us a call at (860) 928-2341.  

Authored by Vice President, Associate Financial Advisor, Michael Baum, CFP® RICP®. Securities and advisory services are offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. These materials are general in nature and do not address your specific situation. For your specific investment needs, please discuss your individual circumstances with your representative. WHZ Strategic Wealth Advisors does not provide tax or legal advice, and nothing in the accompanying pages should be construed as specific tax or legal advice. 697 Pomfret Street, Pomfret Center, CT 06259 and 392-A Merrow Road, Tolland, CT 06084. 860-928-2341. www.whzwealth.com.