Long Term Care (LTC) planning is an important part of estate and financial planning. We never know for sure if we will need long-term care.  Even if these plans are made, many families will never need to use their long term care plans. However, an accident, illness, Alzheimer’s disease, or an injury can change our financial needs, and sometimes very suddenly. The best time to think about long-term care is before it is needed. While Medicare and Medicaid will pay for some long term care services these programs do not pay for every cost, and these are government plans which provide many restrictions for payment.  Assuring you have your own long-term care plan in place is the only way you can direct the care that you will receive when it is needed.  A discussion about Long Term Care planning should be a part of every estate planning process.

Counseling individuals on their Long Term Care options, including the availability of Long Term Care insurance, is an integral part of comprehensive wealth planning. Below are some terms you should be aware of.

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  • Long Term Care Insurance is the insurance that covers families for long-term care if it is needed.  These policies have received some bad press of late, some deserved but mostly not.  A Long-Term Care policy can be a life-saving tool for many people.  There is a misperception that these policies may only be used to pay for nursing home expenses.  Since nobody wants to end up in a nursing home, the thought is that nobody should pay for long-term care insurance.  But this is far from the truth.  Long-term care policies can be structured so that they provide coverage for assistance with every day living BEFORE 24-hour care is needed.  There are many occasions where assistance might be required that do not involve 24-hour care.  These occasions could require “assistance with daily living” (known as ADL’s) such as showering, bathing, dressing or even meals.  These LTC policies can also provide money for relatives to provide such care.  An LTC policy properly structured by a licensed professional such as Grace St. Clair, can be a life-saver as an adult matures in age.   Since the pricing of LTC policies increases with age, the implementation of such a policy should be considered when the estate planning process begins.

    Without funds or insurance to fund one’s long-term care needs, these other planning methods can be effective:

    “Since Medicaid will now be governed by an “income based” eligibility test, a MAPT Trust is no longer needed.  However, if a patient has assets which are generating income which may cause ineligibility, funding these assets into another vehicle may be appropriate to make this income “exempt.” The regulations for 2024 are still  being considered so we do not have a clear picture about the qualification of patients for Medi-Cal purposes other than the strict income eligibility rules.”

    If the home is the only asset to protect, there is little need to worry as long as the personal residence is transferred to the grantor’s Revocable Living Trust.   If a “sick” spouse needs to qualify for Medi-Cal assistance and they meet the new “income based” eligibility rules, then the personal residence will qualify as an “exempt” asset and will only be recoverable by the State if the grantors own this home in their individual names which would require a ”Probate Administration”.  Other planning opportunities are no longer available in California.

    Grace is experienced in advising families about LTC planning and there are often other financial choices available to families that are less onerous than creating trusts to protect assets such as reverse mortgages.  A discussion about LTC Planning should be a part of every estate planning process.