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Discussing Long-Term Care with an Aging Loved One

December 14, 2023
Andrew Sigerson
An adult daughter discussing long-term care planning with an aging loved one
With an estimated 70% of Americans needing long-term care after age 65, planning for long-term care is an integral part of an Omaha estate plan. It’s better to talk about long-term care and make a plan before the family is confronted with an emergency situation.  Kiplinger’s article, “What Gen X Needs to Know About Their Aging […]

With an estimated 70% of Americans needing long-term care after age 65, planning for long-term care is an integral part of an Omaha estate plan. It’s better to talk about long-term care and make a plan before the family is confronted with an emergency situation.  Kiplinger’s article, “What Gen X Needs to Know About Their Aging Parents' Finances,” says that caring for an aging loved one takes planning ahead and patience.   By using advance planning for your elderly loved one, the family will have more options to secure proper care, protect family wealth, and ensure that the community or surviving spouse will not become impoverished.  This article provides practical steps for adult children, spouses, or friends to begin long-term care planning with an aging loved one.  It's best to start these discussions while the elderly person is still living independently.

How Do You Start the Conversation about Long-Term Care?

Initiating a conversation about long-term care with a loved one can be challenging. It's important to approach the topic with sensitivity and understanding. Begin by expressing your concern for their well-being and future. Ensure that the conversation is inclusive, allowing your loved one to express their wishes and concerns.

What to Expect When Talking with a Loved One about Paying for Long-Term Care

Decisions regarding long-term care can be emotionally taxing for both the caregiver and the loved one. It's important to acknowledge these emotions and seek support when needed. Open communication and empathy are key in navigating these emotional challenges.

Which Long-Term Care Expenses Should You Discuss?

Although discussing finances may be uncomfortable, especially when talking with your parents about long-term care, it's necessary to avoid unpleasant financial surprises in the future. Discussing financial readiness early can help in planning and alleviating future stress. Most people’s first concern about long-term care, in-home or facility, is cost.  While costs vary from region to region, long-term care costs are expensive. Living full-time in a skilled nursing facility can easily cost $100,000 a year. Home health care is less costly. However, there are limits to the level of care that can be provided at home, and staffing shortages often make home health care complex.

What is Their Financial Situation?

The first step in understanding your senior loved one’s finances is to know their assets, such as retirement accounts, investment portfolios, real estate, and other assets. Talk to aging parents or your senior to get a sense of their debts, including mortgages, credit cards and other loans. This information can help you understand their financial situation and plan for their future needs.  As you review your elderly loved one's finances, be aware of potential financial abuse. Senior adults are frequently targeted by scammers and fraudsters who try to exploit them for financial gain. Therefore, it's critical to be aware of the signs of financial abuse and take steps to prevent it from happening to your parents. This may include monitoring their accounts for any suspicious activity or helping them avoid scams and fraudulent ploys.

What Income Does the Elderly Person Have? 

Create an outline of the person's income sources, including Social Security, pensions, and any other sources of retirement income. This can help you plan for their future long-term care needs and ensure that they have sufficient income to support them.

Is Long-Term Care Insurance a Viable Option for Your Loved One?

Find out if your senior bought long-term care insurance and ask to see a copy of the policy. If you don’t understand it, ask an experienced estate or financial planning professional for help. Long-term care insurance can help cover the costs of care services that regular health insurance does not cover. It's important to understand the terms, benefits, and limitations of any policy and how it fits into the overall care plan.  There are waiting periods for most policies before coverage begins. If they are not in good health or are too old, premiums for a new policy may be prohibitive.

Are They Eligible for Medicaid?

If the family anticipates relying on Medicaid to cover the cost of long-term care, a Medicaid Asset Protection Trust (MAPT) should be discussed. Trying to simplify qualifying for Medicaid by transferring assets to children, including the family residence, creates many unexpected problems. Medicaid has a five-year look-back period. Any transferred assets will be uncovered, resulting in coverage being denied. A MAPT protects assets from being counted for Medicaid eligibility. However, this trust must be created and assets transferred five years before applying for benefits.

What Healthcare Costs Can You Anticipate for the Future?

As your senior continues to age, they may require more healthcare support. Planning for these care needs in advance is essential. Talk with your senior about how they plan to pay for potential healthcare costs and help them develop a plan to ensure that they can afford the care they need. Read more about anticipating healthcare costs in our article: Paying for Nursing Home Care in Omaha: Your Guide to Medicare, Medicaid, and More

What to Consider When Seeking a Nursing Home or Assisted Living Community

Moving from the family home to a continuing care residence is another solution. These communities offer different levels of care, which change as the individual or couple’s needs change. Finding the right one requires considerable due diligence. The financial health of the organization, whether or not there is a doctor on premises, what local hospitals are affiliated with the community, whether or not the apartment will be guaranteed to be sold and money returned to the family upon the passing of the individual or surviving spouse, etc., are all considerations to help you make the right choice.

What Do You Need to Know About Advance Legal Planning?

If your aging family member has an estate plan, when was it last reviewed? They should address this (if they don’t have one) as soon as possible by working with an experienced estate planning attorney. Discuss what types of legal documents such as a will or trusts that outline their wishes for their assets after they die.  Their estate plan should also include several documents addressing incapacity. These include Power of Attorney, so a designated person can manage financial and business affairs. A Medical Power of Attorney is also needed if the parent cannot express their wishes for medical care. A Living Will is a separate document containing their wishes for treatments they do and do not want to be used to be kept alive. Understanding your elderly loved one's estate plan can help you prepare for potential inheritances and ensure that their wishes are fulfilled.

Work with an Elder Law Attorney

Family caregivers should work with an experienced attorney specializing in retirement planning and intergenerational wealth transfer like those at Legacy Design Strategies. The experienced elder law attorneys on our team can help you navigate the complex financial landscape of caring for aging parents, while also managing your own retirement savings.  Schedule a free call to get the discussion started.

Preparing for the Future: Long-Term Care as an Ongoing Conversation

Long-term care planning is not a one-time discussion but an ongoing conversation that evolves as needs change. Planning before the need arises, regular check-ins with your senior, and updates to the care plan are essential to ensure that the needs of your loved one are continually met.

Key Takeaways:

  • Early and open discussions about long-term care are crucial for effective planning.
  • Understanding the financial, legal, and emotional aspects of long-term care helps in making informed decisions.
  • Involving professionals in the planning process can provide valuable guidance and support.
  • Regularly revisiting and adjusting the care plan is essential as needs and circumstances change.
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