Long-term healthcare can be a costly necessity that takes you by surprise. In fact, 60% of people will require help with basic living needs at some point during their life. Whether it’s the result of a severe accident, sudden illness, or the effects of aging, long-term care is something to anticipate when estate planning. In this blog, we discuss what you should know about long-term healthcare and probate.
What Is Long-Term Care?
Long-term care is a mix of services meant to assist someone with their personal needs over a long period of time. These services can be anything from helping the person get dressed and eat to driving them to appointments. Caregivers provide this support in a variety of different settings, such as private homes, senior living communities, adult day care centers, and nursing homes. The goal of long-term care is to help people live as independently and safely as possible.
What Are the Costs of Long-Term Care?
The cost of long-term care is different for each person. Remember, it’s not just elderly people who need care, but also those who are disabled or suffering from a debilitating injury or illness. Some factors that impact the cost of long-term care include:
- The level of care required,
- The length of care,
- The time of day that care is needed,
- The type of caregiver, and
- Where the care is given.
In New York City, for example, the cost of in-home care ranges from $5,529 to $5,720 per month, depending on the type of caregiver. If that same care is given in a nursing home where the person has a private room, the cost is approximately $13,231 per month. These costs can quickly add up and deplete your hard-earned savings. This is why, at the Law Office of Andrew M. Lamkin, P.C., we encourage long-term care planning as part of your estate plan.
Who Pays for Long-Term Care?
You are responsible for your long-term care costs. Medicaid, Medicare, and other health insurance plans primarily cover medical care, not basic living needs (i.e., long-term care).
Medicaid is both a federal and state financial need-based program. It’s possible that Medicaid will pay for some long-term care services, but only if you meet the income and other eligibility requirements in your state.
Medicare covers a limited number of long-term care services. For example, if you need skilled services or rehabilitation in your home or a nursing home, Medicare will pay for these services. However, it will only cover a maximum of 100 days of care in a nursing home. If you need help with daily activities (e.g., cooking, bathing, running errands, etc.) that don’t require a skilled caregiver, Medicare will not pay for this.
Private Payment Options
Outside of government assistance programs, there are private payment options that can cover long-term care costs. Some people use life insurance, long-term care insurance, and annuities to pay for their care.
A long-term care insurance policy may sound like the perfect solution, and for some people, it is. These policies primarily cover non-medical services, such as:
- Nursing home care,
- Assisted living facility costs,
- At-home care,
- Assistance with daily tasks,
- Short-term hospice care, and
- Respite or temporary care.
However, there are some potential problems with long-term care insurance. First, these policies do not cover medical care costs. Second, they do not pay family members who provide in-home care. Lastly, long-term care policies can be expensive depending on your age and needs.
With the help of a skilled estate plan lawyer, you can incorporate certain tools and strategies into your estate plan that will reserve money for long-term care expenses. Reach out to Andrew M. Lamkin to create a plan that anticipates and supports your long-term care needs.
How Does Long-Term Care Healthcare Relate to Probate?
Long-term care takes place while you’re alive, and probate occurs after your death. So how do the two relate? Under New York law, there is something called Medicaid estate recovery. If a person receives Medicaid at the age of 55 or older, or they are permanently institutionalized regardless of age, the state may recover Medicaid payments from their estate upon death. In other words, Medicaid can file a claim against your estate and seek repayment. This impacts your family and other beneficiaries of your estate because these reimbursements reduce or eliminate the money and property leftover for others.
There are instances when the law prohibits Medicaid estate recovery or allows for a waiver. For example, if the Medicaid recipient’s spouse is still alive, Medicaid cannot recover anything. If the Medicaid estate recovery would create an undue hardship for the surviving heirs or beneficiaries, then recovery could be waived.
A way around Medicaid estate recovery is to avoid probate. Then, the federal and state Medicaid programs have nothing to file a claim against. You can achieve this by rearranging your assets and executing certain estate planning documents.
How Do You Incorporate Long-Term Care Planning Into Your Estate Plan?
Although no one wants to require long-term care at any point in their life, planning for it can preserve your assets for whatever lies ahead. There are different estate planning vehicles and strategies that you can use to protect your assets, pay for your long-term care needs, and provide for your family after you’re gone. For example, a Medicaid Asset Protection Trust (MAPT) allows you to qualify for Medicaid while still keeping property and money. Assets put into a MAPT will not count toward assets for Medicaid eligibility purposes and cannot be seized as long as the trust is created and funded appropriately.
Contact the Law Office of Andrew M. Lamkin, PC, to Plan for Your Long-Term Healthcare Needs
Estate planning is all about anticipating the unknown and making decisions ahead of time. Long-term care is something that may be necessary quickly and unexpectedly. Founder and principal Attorney Andrew M. Lamkin has over 15 years of experience helping individuals create seamless estate plans that provide for their needs. He services clients in New York City, Nassau, and Suffolk Counties. To schedule a free consultation, call our office or go online to submit a request.