Plan ahead to protect your life savings

Transitioning from your home to a longterm care facility is a decision no one wants to face. Recent data released by the National Center for Health Statistics, however, estimates more than two-thirds of Americans age 65 and older will need longterm care services during their lifetime.

“It’s not a fun thing to think about,” said David Edwards, a Springfield estate planning and elder law attorney with the Edwards Group LLC, who recently spoke on “Paying for Long Term Care: Surprising Ways to Gain Benefits, Expand Care Options and Protect Your Life Savings” at the 13 th annual Conference for Caregivers in Springfield.

The conference was sponsored by the Area Agency on Aging for Lincolnland, Inc. The organization serves a 12-county area in central Illinois and offers a number of services, including counseling, respite care, legal advocacy and education.

“Caregiving is a balancing act,” said Debbie Deopere, community services specialist with the Area Agency on Aging for Lincolnland, Inc. Conferences like this recognize the challenges caregivers face and provides an outlet to socialize with others traveling the same road.

The one-day conference brings together speakers to provide information to caregivers about topics that are important to them, and provides caregivers with access to services and resources that are available in the community. This year there were 107 attendees, who could choose from among a number of sessions, of which Edwards’ was one of the most popular.

“It’s important to be realistic about what your care needs are,” said Edwards. Families need to know what options are available and to have a care plan in place should a loved one be unable to continue caring for themselves at home.

Long-term care comes with a hefty price tag – nursing home costs can run between $5,000 and $6,000 a month while assisted living costs can run between $3,000 and $5,000 a month. Medicare only pays benefits for the first 100 days of a nursing home stay, although it will continue to pay for doctors, medications or a return trip to the hospital, leaving you to pick up the remainder of the tab.

Without a plan in place, individuals can burn through their life savings, lose their property or leave their spouse impoverished, with nothing to show for their lifetime of hard work. Good planning can preserve your assets to pass down to your family. It’s important to designate a person to make decisions for you when you can’t and to tell your family about your financial assets.

Making decisions about long-term care and how to pay for it can be stressful for families. “The earlier we can plan, the more we can do, the more assets we can protect, and the easier we can make it on the family,” said Edwards, who often hears people say they wish they had done this sooner. “People have better dreams for their money.”

The biggest concern families have is losing their life savings or family home. “Arranging things now gets the best results,” said Edwards.

Planning before needing nursing care is crucial and gives one more leeway in preserving their assets while maximizing government benefits for their care needs. One option is to take assets out of your name and place them into a “nest egg” trust – or Medicaid Asset Protection Trust or Veterans Asset Protection Trust. Whatever assets are placed in trust are protected; assets placed in a Medicaid Asset Protection Trust are fully protected after five years.

It’s almost always never too late to plan. Edwards often sees clients in crisis mode, when a loved one has been hospitalized and is being released to a long-term care facility. Even then there are things that can be done to protect their assets while maximizing Medicaid and VA government benefits. Assets that are transferred less than five years after a loved one needs nursing care are subject to Medicaid review.

The biggest mistake Edwards sees is families spending down all their assets before applying for benefits. At that point, it is too late to do anything. Under Medicaid rules, the surviving spouse is limited to $30 a month in benefits to live on in the future. By planning ahead, the family can preserve funds to pay for extras without paying out of their own pocket.

There is a lot to keep in mind when planning for your future long-term health care needs. Being informed and making decisions early gives you more options to choose from and ensures your loved ones are provided for.

For those unable to attend the talk at the conference, the Area Agency on Aging for Lincolnland, Inc. will be hosting a repeat session at their office in January.

Roberta Codemo of Springfield is a regular contributor to Illinois Times and Capital City Senior.