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Why should you make long-term care part of your estate plan?

On Behalf of | Feb 23, 2023 | Estate Planning

Nobody wants to end up in a nursing home, so most people don’t make a plan for their long-term care. But there is the likelihood that at some point in your life, you will need some sort of skilled nursing services. That’s why it is so important to make long-term care planning a part of your estate plan.

By taking the time to understand your options, you can protect your assets and ensure that you will receive the care you need if you cannot care for yourself.

How can you pay for long-term care without going broke?

Long-term care can be costly. The median monthly cost of staying in a skilled nursing facility in Georgia is $7,011. That can quickly consume any retirement savings, causing significant worry for a senior citizen.

Some may sign over all their assets to their adult children so they can qualify for Medicaid. One drawback is that Georgia has a 5-year lookback period. In other words, if you deeded your house to your adult child and then went into a nursing home the following year, you would be penalized for the house’s fair market value and be expected to pay that amount for your care.

Fortunately, long-term care insurance policies can provide coverage for skilled nursing care without you needing to spend down your assets.

The three main types of long-term care insurance policies available include:

  • Traditional
  • Hybrid
  • Life insurance that includes a long-term care rider

Statistics show that 69% of the U.S. population will require long-term care. And, if you don’t have a plan to pay for a nursing home stay, it will significantly cut into the retirement savings that you spent a lifetime building. By making long-term care a part of your estate plan, you can have the assurance of financial security throughout your golden years.