Preparing For Incapacity & Long Term Care
As an entrepreneur, it can be challenging to consider the possibility of limitations and incapacitations that may come with old age. However, strategic planning in your 50s and 60s can help safeguard your heirs from financial risks and protect your business from potential leadership vacuum. You could start by considering long term care costs, which can soar anywhere from $54,800 to $150,200 annually, depending on your location.
Thankfully, a long term care policy can cover this expense, with an average cost of approximately $2,700 per year. Couples can avail significant discounts, and locking in a low rate can protect you from the burden of an extended stay in an assisted care facility. If your assets are mostly tied up in your business, it's crucial to work with your business partners and attorney to ensure that your legacy and assets are protected in case of a health emergency.
It's also vital to make sure your intentions are clear and that your personal savings are accessible to your spouse or heirs in the event that you are no longer able to authorize withdrawals or sign checks. Furthermore, setting up a trust to divert your assets into a tax-protected vehicle in the event of incapacitation is also an option.
While most people who receive daily assistance still live at home, it's essential to note that this is a more cost-effective option than a semi-private room that costs more than $80,000 in the United States. A full-time health aide, on the other hand, costs less than $50,000.
A long term care policy can provide significant protection for your remaining assets in the event of a catastrophic health event that requires skilled nursing care. If your resources are depleted, and you need to rely on Medicaid due to a lack of insurance, your spouse can keep slightly more than $100,000. With a long term care policy that offers asset protection for your partner, they can keep more, depending on the policy's coverage.
However, Medicaid regulations vary from state to state, so it's crucial to review this protection meticulously with your insurance agent and attorney before relying on it. If you're looking for a more comprehensive policy, a hybrid policy could be an option. This provides long term care insurance that offers whole life coverage. If you don't need long term care, your whole life policy will benefit your heirs, like any life insurance policy. However, this policy is generally more than twice the price of a long term care policy, so consider this investment carefully.
Finally, finding a bed in an emergency is one of the most significant challenges when choosing long term care. If your health history indicates that you may need long term care, consider finding a feeder facility, like apartments or condos, that can provide closer access to long term care. You can also use the feeder facility's features to improve your health and delay long term care for as long as possible.
In conclusion, the best time to plan for long term care is long before you need it. With the right policy, you can protect your assets, heirs, and partner from significant expenses and worries. So, start planning today and secure your future.
