An estate plan may be created decades before long-term care becomes a concern. While the need for care is often associated with aging, an illness, injury, or disability can create long-term care needs at other stages of life as well. Decisions about who can manage your finances, how your assets are owned, and what you hope to leave to your family can all become important if your health or care needs change.
You don’t need to know today whether you’ll eventually need help at home, assisted living, or nursing home care. Your estate plan can provide a foundation for making those decisions if the need arises. As circumstances change, the plan can be reviewed alongside your financial and long-term care options rather than treating each decision separately.
Incapacity Planning Is Part of the Picture
Needing long-term care doesn’t necessarily mean you can no longer make your own decisions. Still, certain illnesses or cognitive changes may eventually make it difficult to manage your affairs on your own. That’s when the incapacity provisions in your estate plan can become especially important.
A financial power of attorney can give someone you trust authority to handle financial matters on your behalf. Healthcare planning documents can address who should make medical decisions if you’re unable to make them yourself.
These decisions are worth making well before care is needed. If the time comes when someone needs to step in, your family already knows who has been chosen and has the appropriate legal authority to act.
Long-Term Care Can Change Your Financial Picture
An estate plan can prepare for possibilities that may arise later in life, but no one knows exactly what their future care needs will be. Paying for help at home, assisted living, or nursing home care can significantly change your financial picture.
If long-term care becomes necessary, that’s a good reason to look at your finances and estate plan together. Assets you once expected to leave to beneficiaries may need to help support you during your lifetime, and decisions about how those assets are used could affect other parts of your plan.
Your Home May Be Part of Both Conversations
A home can play an important role in an estate plan, particularly when there is a desire to eventually leave it to children or other family members. It may also become part of the long-term care conversation.
You may want to remain at home and bring in additional help. At some point, downsizing or moving to a different living arrangement may make more sense. The home’s value could also become an important financial resource for future care.
These decisions involve more than where you live. Selling, transferring, or changing ownership of a home can affect other parts of your financial and estate planning, which is why it’s worth looking at the larger picture before making significant changes.
Be Careful About Moving Assets to Family Members
Concerns about the future cost of care sometimes lead people to consider giving money or property to their children or transferring ownership of assets.
Those decisions aren’t always as simple as they appear. Transfers can have tax and estate planning consequences, and they may also affect eligibility for certain government benefits. Medicaid has rules that can penalize certain transfers made during the applicable look-back period when determining eligibility for some long-term care benefits.
Making significant transfers without understanding those consequences can limit your options later. This is an area where planning ahead, and getting advice from an estate planning attorney based on your particular circumstances, can be especially valuable.
The Conversation Changes as You Get Older
Long-term care planning at 50 may look very different from long-term care planning at 75.
Earlier in life, the focus may be on making sure the right estate planning documents are in place and considering how future care could fit into your broader financial goals. As you get older, develop health concerns, or begin helping a spouse with care needs, those conversations can become much more specific.
It is also important not to wait too long. Estate planning decisions generally need to be made while you still have the legal capacity to understand and make them. If dementia or another condition progresses to the point that capacity is lost, some planning options may no longer be available.
Reviewing your plan before that happens gives you the opportunity to reconsider who you’ve named to make decisions, how your assets are structured, what resources may be available to pay for care, and whether your existing plan still reflects what you want.
If you have questions about how future long-term care needs could fit into your estate plan, our team at Meredith Law Firm can help you look at the bigger picture. Call our office at 832-246-8481 or reach out through the contact form on our website to schedule a conversation.