As New Jersey attorneys focusing exclusively in the areas of estate planning, elder law and tax planning, the law firm of Rothamel Bratton is dedicated to providing our clients with the benefit of our knowledge and insight regarding all areas of future planning and the law. We want to help our current and future clients understand the steps that they need to take to protect themselves and their loved ones. One of the things that we have seen repeatedly over the years has been the fact that people tend to make certain assumptions about their future, and these assumptions can lead them into trouble when the time comes for them to plan for long-term care. Here are two of the biggest and most common misconceptions that we encounter in our firm, and the steps that you need to take to avoid them.
Misconception #1 – That people don’t end up using long-term care
Though most people are aware of others who have ended up in assisted living, nursing home facilities, or aged in placed with the help of home health care, most tend to believe that it is something that won’t happen to them. This is a short-sighted approach, as according to longtermcare.gov, on average, someone turning age 65 today has almost a 70% chance of needing some type of long-term care services and supports in their remaining years. By planning ahead, you have more options. You may be able to protect assets for uses other than long-term care, it allows you time to understand resources available in your community, and find public and private sources to pay for long-term care, which is important since the average cost of long-term care often exceeds what someone can pay. Which leads to misconception #2…
Misconception #2 – That long-term care is paid for by Medicare
Though Medicare does pay for a limited amount of nursing home care rehabilitation, that payment is restricted to care following a qualifying hospital stay, and is limited in the number of days that it provides payment for. Once that period of time has expired, families have four options to pay for long-term care; 1) Private Pay – if your assets produce $120,000 (plus inflation) each year, you may be able to private pay for your long-term care without substantially reducing your principal. 2) long-term care Insurance – long-term care insurance is an excellent investment for those who can pay the premiums and qualify. Ask a qualified elder law attorney for a referral to a trusted long-term care insurance agent. 3) Medicaid – if you cannot afford to private pay, cannot afford long-term care insurance premiums, or cannot qualify for long-term care insurance, Medicaid may be a good fit for you. Medicaid is a federal program that is administered by your state; it pays for long-term care, if you cannot. Typically, trusts, gifting programs, and caregiver contracts are used as part of a Medicaid plan; however, each long term plan is customized to the individual’s financial and family situation. 4) Veterans Benefits- VA pension benefits are payable to certain wartime veterans or eligible dependents of deceased wartime veterans.
Long-term care is very expensive, and the costs are continuing to climb. Families need to plan ahead to protect their assets and make arrangements to pay for this specialized care. At Rothamel Bratton, we work with families to provide for their long-term needs, making sure that they are able to protect the assets that they have worked for and leave behind the legacy that they planned. Contact us today for more information.