Long-Term Planning

The need for Long-Term Care doesn’t just effect older people. In fact, 40 percent of people needing it today are adults between the ages of 18 and 64 who have been injured in accidents – many of them automobile and sports related, like the late actor Christopher Reeve – or suffer from conditions like multiple sclerosis and brain tumors. One third of the people who have strokes in the United States are under age 65! In fact, stroke is the leading cause of disability in the U.S. There are 3.8 million stroke survivors today, some of whom can remain independent by receiving care at home. Over the past 25 years, the number of individuals with severe disabilities between the ages of 17 and 44 has increased 400 percent. There are now more than 13 million Americans between the ages of 15 and 64 who need some type of daily assistance. Eight out of ten families in the U.S. have a current need for Long-Term Care assistance.

You are most likely visiting our web site because you want control over your financial future. One sure way to lose that control is by facing a huge bill for extended care. Long-Term Care is very expensive and costs anywhere from $60,000 to $130,000 a year and up depending upon where you live, for either an 8-hour shift at home, or a semi-private day in a nursing home with drugs and miscellaneous supplies. Our own experience in New York is that the average cost per day for nursing home care in 2002 was $237 per day ($86,597).¹ This can vary widely across the State. In the North Country we have seen care provided to client’s family members for about $60,000 per year. Close to New York City we have seen $135,000 per year. This cost is expected to at least triple over the next 20 years. More over, the life expectancy of an Alzheimer’s patient is now from three to twenty years. If both you and your spouse need care, you can see how these numbers can explode.

Unfortunately, most long-term care expenses are paid for out of people’s pockets, out of savings they are accumulating or have accumulated to enjoy their retirement. Why? Because Long-Term Care isn’t covered by Medicare or other familiar forms of insurance like group or individual health insurance, Medicare supplements, retiree health plans, HMOs, VA plans, or Disability Income plans. The odds of the government helping you are very low. Medicare currently pays for only 1.6% of all Long-Term Care costs in the U.S. And when it does, it only covers skilled or acute nursing care. You have to be considered to be impoverished and exhaust almost all of your assets before Medicaid will help. On top of all of this, the odds of needing Long-Term Care are greater than 50 percent, much higher than, say, being in a car accident, or losing a house by fire – and often at a far greater cost than the cost of losing your whole house. Would you like some statistics? There is a 1 in 88 risk of needing homeowners’ insurance, a 1 in 47 chance of having an auto accident, and a 2 in 5 chance of needing Long-Term Care. About 60 percent of the U.S. population will need Long-Term Care at some point.

Eighty percent of all Long-Term Care is now provided outside of a nursing home. More than 22 million families in the U.S. currently provide informal, unpaid care, for an older parent or relative, a number that has tripled in the last 10 years. This creates another problem what we call "The Sandwich Generation". This refers to adults who have the dual responsibility of looking after their own children while at the same time providing care to a disabled parent. This can be an enormous burden, may result in job loss, or other disturbing side effects from being stretched too thin both financially and in terms of the human cost.

For home care, which is often where people would like to stay there can be costs including retrofitting a house for wheelchairs, installing elevators, making modifications to bathrooms, and of course having nursing staff come to the home. There are also soft costs, such as having to pay for work done around the home that the disabled person used to take care of on their own.

There are things we can do to protect the family. The first step after recognizing the risk is to consider who is most likely to be hurt by this kind of expense. For couples if one spouse requires care they could exhaust the family’s assets some times leaving the healthy spouse destitute. Children can face a large financial burden when they try to assist their parents. Also assets that parents otherwise would have left to their children and grandchildren can be exhausted.

There are 3 possible paths that people can take to deal with this issue.

The first is to purchase private insurance. We represent many insurance companies that offer this protection. The features and benefits available from the different companies can vary widely. As professionals it is our job to help select an appropriate plan and to make sure that the coverage you buy is designed to be there for you when and if you need it.

The second approach involves using sophisticated legal strategies. We have relationships with experienced Elder Law Attorney’s who can assist us in designing solutions for clients needing to choose this route. Many Elder Law Attorney’s will be the first to tell you that for people who can plan in other ways, the legal and trust techniques often have undesirable side effects and consequences. If your situation or that of a family member is so severe that other planning means cannot be used, these legal techniques become the option of last resort.

Lastly, there is the plan employed by far too many people, that is avoiding an unpleasant issue and doing nothing.

Think about it, you don’t look out of your bedroom window and see one out of every two houses burning and then decide not to have a homeowner’s policy, even if your mortgage is paid off, right? You would likely have automobile insurance even if you weren’t legally required to, wouldn’t you? Without proper planning, all of the assets that you have accumulated over your lifetime are your insurance policy against a risk that is very expensive, statistically very likely to happen, and will not be paid by anything else. As you can see, properly dealing with this financial threat is necessary so that you can have peace of mind if something happens to you now plus making sure that you can look forward to a comfortable, worry free retirement with financial security. We stand ready to help.

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