When you sit down to create your comprehensive estate plan you will likely want to include far more than just a basic roadmap for the distribution of your estate assets after your death. Planning for the very likely possibility that you will need long-term care is something you may wish to consider adding to your estate plan. If so, one consideration is whether you need long-term care insurance. To make that decision you need to have at least a basic understanding of what long-term care insurance covers, why you might need it, and what your alternatives are to purchasing it.
You odds of needing long-term care increase significantly as you age. At age 65 you will stand a 50-50 chance of needing long-term at some time in the future. If you make it to age 85 those odds will increase to three in four. The cost of that care can quickly deplete your life savings if you are forced to pay out of pocket. Nationally, the average cost for a year stay in a nursing home is around $90,000. In the State of New York as a whole, the average cost is $135,000; however, it increases to almost $160,000 in the City of New York and the surrounding Burroughs. Because most health insurance policies won’t cover long-term care you may decide to consider purchasing long-term care insurance which is specifically designed to provide benefits when a policyholder needs care in a nursing home or similar facility. Premiums for long-term care insurance, however, are typically high even if you purchase a policy long before you reach retirement age. Therefore, it is important to consider the lifetime cost of the coverage compared to the potential benefits offered by the policy. Specifically, be sure to note the waiting period during which you will have to pay out of pocket before the policy will begin paying out benefits, the daily benefit limits, and the overall length of time the policy will cover you if you need care.
Whether you decide to purchase long-term care or not, you should also include Medicaid planning in your estate plan as an alternative to long-term care insurance or in addition to it. Medicaid will cover long-term care costs; however, qualifying for benefits will depend on whether your income and assets exceed the program limits. By including Medicaid planning in your estate plan you can protect estate assets while still ensuing that you will qualify for benefits when the time comes.
If you have additional questions or concerns about long-term care planning or Medicaid planning, contact the experienced New York estate planning attorneys at The Law Offices of Saul Kobrick, P.C. by calling 800-295-1917 to schedule your appointment.
To learn more, please download our free long-term care planning in New York here.
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