Do not overlook long-term healthcare when planning an estate

| Sep 22, 2020 | Estate planning

Estate plans are collections of complex legal documents collected over a person’s entire life. These plans include insurance policies, property deeds, car titles, the will, and much more. Estate plans are essential for defining clear lines of inheritance, establishing trusts and even covering funeral arrangements.

Sometimes, people overlook an essential part of every estate plan — long term healthcare. Those over age 65 have a 70% chance of needing some form of long-term care during their senior years. Those without a plan risk their entire estate.

Covering the costs of long-term healthcare

Depending on one’s age, government programs can help cover long-term care, but these come with a hefty cost. The key to easy and attainable coverage comes through early planning with reliable funding. People can find long-term health coverage through:

  • Medicare: A federal aid program, Medicare helps those with emergency medical needs. Medicare will cover short stays in a nursing home and in-patient care, but coverage does not last long. Additional expenses come straight out of pocket.
  • Medicaid: This government aid program provides healthcare assistance to low-income individuals and the elderly. A high-value estate disqualifies one from receiving Medicaid. Seniors using Medicaid for long-term care must liquidate their estate, reducing its value to meet the eligibility threshold, eliminating almost all other funds. Medicaid coverage is expansive but offers little choice.
  • Long-term insurance: Many people still maintain long-term health insurance policies with monthly premiums, but very few states allow these plans. The shifting insurance landscape has made these policies too expensive and unreliable. If the benefits go unused, the insurance company keeps all the money.
  • Living benefits insurance: These newer policies lump long-term care and life insurance into one product. With low monthly premiums, these policies cover late-in-life medical needs and pay out the remainder to a beneficiary as a death benefit.
  • Asset-based insurance: In lieu of monthly premiums, asset-based insurance pulls funds from a one-time lump sum deposit. These investments incur some interest and grow with time. Policyholders can recover the asset at any time, or the remainder will pay out as a death benefit.

Worried about health care after retiring? Consider contacting a lawyer

Those with incomplete estate plans can bring their concerns to a local attorney familiar with Florida estate planning and health insurance. A lawyer can organize all the disparate legal documents necessary in an estate plan, offer long-term health care suggestions and help secure funding to lead a happy and healthy retirement.