Make Long-Term Care Decisions Based on Truth, Not Assumptions or Fear

Complimentary Story
June 2022

Proverbs 16:31, “Gray hair is a crown of glory; it is gained in a righteous life.”

   Scripture is replete with reminders of the value of senior citizens to any society.  It instructs us to honor our elders by listening to their wisdom and following their example.  It also instructs us to care for our elders when they are unable to care for themselves.

   One of the most common concerns for senior citizens and their families as they age is the possibility that an extended nursing home stay could wipe out their savings and leave them impoverished and unable to pass anything on to their children at their death.  As opposed to the many misguidances and half-truths available via the internet and social circles, below are seven facts every family should remember as they make decisions about care and finances for elderly relatives.

1). A nursing home stay is not a certainty.
   Thanks in large part to significant advances in home care and other treatment arrangements, it is no longer a foregone conclusion that seniors will spend their final days in a nursing home.  Services can now be provided by part-time caregivers who visit patients’ homes, and in many cases, relatives can be trained and equipped to provide necessary services with a familiar face.  There are still cases where a nursing home stay is the best treatment option available, but we should not make decisions based on the incorrect assumption that it is inevitable.

2). Long term care insurance can be a game changer.
   While long term care can undoubtedly have a devastating effect on a person’s or a couple’s estate, the impact can be reduced significantly by long term care insurance.  As families begin thinking about care options for older relatives, a necessary first step is to determine if any long-term care policy is in existence, or if any is available through employers or other means.  A good long-term care policy can not only pay for nursing home costs but can also fund home care or other services that could limit or eliminate the need for any nursing home care.

3). Divestment benefits future generations, not the giver.
   As the potential for long-term care expenses approach, many families will elect to engage in divestment, the practice of giving away assets to allow individuals to qualify for public benefits without having to spend the divested asset.  Many families will consider strategies like transferring real estate or financial accounts to younger generations, and those strategies are legitimate if they are done and reported in accordance with applicable law.  What must be remembered, however, is that divestment financially benefits the recipient, not the giver.  This may be the intention, but it is important to be clear about the impact from the outset.

4). Divestment can negatively impact the giver.
   While it is completely reasonable and understandable for those looking toward long-term care needs to want to transfer assets to younger generations to protect those assets from being used for those care needs, it is important to understand that potential impacts of those transfers.  Not all care facilities accept patients whose care is being paid for by the State, so an aggressive divestment plan will very likely limit the treatment options available to a relative in need of care.  In addition, an aggressive divestment plan could leave the giver impoverished and dependent on others to support them in their later years, a situation that might not be palatable to those who have saved for their whole lives to avoid that dependent predicament.

5). Children are not entitled to an inheritance from their parents.
   After hundreds of conversations with families about long-term care planning, one truth I find myself reminding elderly clients about more than any other is that they do not owe their children anything out of their estate at the time of their death.  It is undoubtedly a noble aspiration to want to bequeath something of value to our children and grandchildren after we shuffle off this mortal coil.  Putting ourselves in a compromised financial or health care situation in our vulnerable years to do so, however, often overrides years of intentional planning.  Married couples work hard, make hard choices, and save so that they can support each other into their senior years. To abandon those goals in an attempt to maximize the inheritance given to adult children is a drastic and unneeded shift in priorities.  My average client considering long-term care planning is in their 70s or 80s, which means their children are generally between 40 and 60.  Those adult children are far beyond self-sufficient, as many are nearing retirement themselves!  To the parents, take care of yourself and your spouse first, then worry about your children.  To the children, tell your parents that you want them to be cared for at the highest level, and you desire their comfort and honor much more than what inheritance they might leave you.

6). The rules are constantly changing.
   Many clients who visit my office have some idea about the rules surrounding nursing home planning or just estate planning in general.  What becomes apparent, however, is that the rules many understand are often outdated by years or even decades.  When making major medical and financial decisions related to long-term care, seek out the assistance of a proficient professional who can advise you based on the current rules.

7). Your circumstances are constantly changing.
   If you have a long-term care plan, or an estate plan of any kind, in place, and it has been more than five years, it is more likely than not that some part of the circumstances in your life at the time you made the plan are no longer the same.  Deaths happen, divorces happen, moves happen, and relationships change.  Therefore, it is a good idea to sit down with a professional once every 5-7 years to review your plans and see if any additions or changes are necessary based on your wishes.  We all do our best to grow so we are not the same people we were five years ago, so we are wise to recognize that growth in change with current documents.

   With all the above facts in mind, please take the time to update your estate plan today, regardless of how simple or complicated it must be.  We are stewards of God’s resources while we are here, and we need to take that obligation seriously.

McLario, Helm, Bertling & Spiegel, S.C.
N88 W16783 Main St.
Menomonee Falls, WI 53051-2890
Tel: (262) 251-4210

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