A lot of people make the mistake of thinking that estate planning is only about the distribution of assets to their loved ones. While you’ll certainly have to think through how you want the money in your bank and retirement accounts to be passed down to your loved ones, and what you’ll want to happen with your personal property, there are other considerations that you’ll want to take into account. One of them is the potential need for long-term care.
There’s a significant possibility that you’ll need some form of long-term care at some point in your life, and this care can be incredibly expensive. If you don’t have a plan in place for how to cover these expenses, then the wealth that you’ve worked hard to accumulate and that you intended to pass down to your loved ones can be quickly eroded away. And even those who have started to plan for this care can make costly mistakes that prove devastating to their estate plan.
There are several mistakes that can be made when addressing your potential need for long-term care. These include:
- Underestimating the cost: A lot of people are blown away by the cost of long-term care. Before nailing down a plan to address your potential care, you need a firm and realistic understanding of the potential costs involved. That way you’ll know how much money will be needed if long-term care becomes necessary. This can give you direction as far as how to plan and how to protect your other assets.
- Thinking that you won’t need long-term care: Far too many individuals forego long-term care planning because they simply think that they won’t need it. But if you’re 65 or older, statistics show that you will have a 70% chance of needing some sort of long-term care in your lifetime. So, you’re better off planning for the worst and hoping for the best.
- Waiting to plan until it’s too late: The best way to ensure that your potential long-term care needs are met is to start planning early. This is especially true since Medicaid has a lookback period when it comes to eligibility determination. So, if you don’t start planning early on, then you could be hit with penalties or completely be denied the assistance that you want and need.
- Relying only on family: Some people think that they can count on their spouse or their children to take care of them as they become older and unable to care for themselves. While your loved ones may be willing to help you to a certain extent, expecting them to provide you with everything you need is a big ask. You don’t want your loved ones to become completely overwhelmed, and there may come a point when they’re simply unable to provide you with the care that you need. And if something happens that prevents your loved ones from stepping in to assist, then you can be left in a tough place with no plan and insufficient resources to cover your long-term care needs.
There can be a lot that goes into the estate planning process, but don’t let it all overwhelm you to the point that you procrastinate in creating the plan that you need. Instead, inform yourself as much as possible so that you can navigate the process with confidence, thus allowing yourself to rest assured that you’ve done everything possible to protect your future.
