When many New Jersey residents consider their estate plan, they focus on ensuring that they can pass their assets on to their loved ones in the manner that they wish. While this is a vital aspect of estate planning, there are other parts of the process that are just as important. Making sure that one’s own late-life needs are taken care of is a prime example. Unfortunately, many individuals fail to recognize the need to address nursing home planning.
Statistic suggest that as many as 70 percent of Americans will require some type of long-term care as they move through their retirement years. For those who will eventually need to move into a nursing home or residential care facility, the cost of that change can be far more than many imagine. One estimate places the cost of a year of nursing home care at $75,000. Determining how to fund that level of care can be a challenge.
One option involves seeking specialized insurance coverage for long-term care needs. These policies can be expensive, and require payment of premiums before the services are needed. In addition, individuals will receive better rates if they pursue this type of coverage early on, before serious health issues occur.
Many will turn to government programs to assist with any late-life residential care needs. Here again, proper advance planning is crucial to a favorable outcome. For example, Medicaid will help cover the cost of residential care, but will require individuals who have a certain level of wealth to deplete their own assets before coverage kicks in. There are a number of planning tools that can help older Americans protect their assets before Medicaid coverage is needed.
When it comes to nursing home planning, the best course of action is to address these needs early, far in advance of actually requiring financial assistance in paying for these costs. For those in New Jersey who are able and willing to create a financial plan to address these needs, late-life residential care can be available if and when it is needed, without having to deplete one’s hard-earned wealth to do so. Advance planning can allow families to have the care they need, while also passing assets to their intended heirs.
Source: The Motley Fool, "3 Simple Steps for Long-Term Care Planning", Jessica Alling, May 17, 2014