As you get older, planning for the possibility of needing long-term care, such as a personal care home or a nursing home, becomes increasingly important. However, long-term care costs can be substantial and can quickly deplete your estate if you do not plan carefully.
Learn how you can include long-term care costs in your Pennsylvania estate plan.
Long-term care insurance
Long-term care insurance is a policy designed to cover the costs of nursing homes, assisted living facilities and home health care. If you are in good health and relatively young, the premiums for these policies may be affordable and can provide significant benefits if you need long-term care in the future.
Medicaid planning
Medicaid is a state and federal program that can cover nursing home costs for those with limited income and assets. However, qualifying for Medicaid can be complex due to the strict financial eligibility requirements. Timely planning can help you qualify for Medicaid while preserving assets for your heirs.
Annuities
An annuity is a financial product that you purchase from an insurance company. In exchange for a lump sum payment, the company will make regular payments to you for a certain period or for the rest of your life. Certain types of annuities can be useful in Medicaid planning.
Trusts
Trusts can be an effective tool for managing your assets and planning for long-term care costs. For instance, a properly structured irrevocable trust can help protect your assets from depletion by nursing home costs while allowing you to qualify for Medicaid.
Income and asset protection
Proper income and asset protection planning can help protect your estate from nursing home costs. Strategies might include creating irrevocable trusts, obtaining long-term care insurance while you are healthy or purchasing an ownership interest in your child’s home.
Planning for long-term care costs in your Pennsylvania estate plan can be complex, but it is essential for protecting your assets while ensuring you receive the care you need.