Many people know the importance of financial and estate planning. But most Americans do no long-term healthcare planning for their senior years. While more than 90% of US seniors eventually need healthcare assistance as they age, fewer than 10% have long-term care insurance.

Whether you or your senior loved one plan to age at home or in an assisted living community, long-term health care is expensive and financially challenging for most families. And with 5.9 million Californians over 65, state resources for senior care are limited. Planning for long-term health care is crucial to make sure you can afford medical and other services when you need them in your senior years.

Your qualified California estate planning attorney can help you navigate how to plan for long-term care needs and make them an essential part of your family's financial and estate plan.

Why Long-Term Healthcare Planning is Important

Planning for long-term health care is important because it is expensive, and you must be prepared. If you don't plan for it, you may need to reduce your estate to pay for the required care. Or worse, you may not have enough money to afford high-quality care and services in your senior years.

 Access to appropriate healthcare services can significantly impact one's well-being and independence. By planning for long-term healthcare needs and making it a part of your financial and estate planning, you take control of your future and ensure you or your senior loved one will receive the care needed when the time comes.

Understanding Long-Term Care Options in California 

There are many long-term care options for California seniors. These include in-home care services, assisted living facilities, nursing homes, and Continuing Care Retirement Communities (CCRCs). Each option provides varying levels of care and support. Understanding the differences between these options is crucial in making an informed decision about long-term healthcare planning.

In-home care services provide assistance with daily activities, allowing individuals to remain in their homes. Assisted living facilities offer a more structured environment with support for daily living activities and some medical care. Nursing homes provide 24-hour medical care and support for individuals with significant healthcare needs. CCRCs offer a continuum of care, allowing residents to transition between different levels of support as their needs change.

The Price of Long-Term Care in California

As we age and need assistance, the two main choices are to age at home or move to an assisted living community. An AARP study showed that 90% of seniors want to age at home as long as possible. Other seniors wish for the carefree lifestyle of an assisted living community with meals, medical care, and no home maintenance. Both are expensive.

For example, according to Genworth Financial, the 2023 monthly cost for senior care in San Diego, California, is about $7,100 for home health care, $6,000 for an assisted living community, and $13,400 for a private room at a nursing home.

This cost varies for assisted living in California depending on the county, location, and community. Luxury assisted living communities have monthly investments of $10,000 to $15,000 and more. And modest accommodations exist that cost less than the average price per month. 

And the level of home care varies depending upon the level of service needed, the number of hours necessary for nurses and aides, and the needed medical equipment for the home.

The Consequences of Not Planning for Long-Term Healthcare 

Neglecting long-term healthcare planning can lead to financial hardships and poor medical outcomes. Family members may face financial strain as they attempt to cover care costs. And without adequate planning, individuals may have limited choices in healthcare providers and facilities, resulting in inadequate care and support. The emotional stress and uncertainty of unplanned long-term care can impact you and your loved ones.

Paying for Long-Term Care

Private Pay for Long-Term Care and Home Health

Most families pay for assisted living or home health care with funds from savings, pensions, Social Security income, or other financial assets. Some seniors have a long-term care policy that helps pay some of the cost. Families also use options that include real estate, life insurance, annuities, and other assets. Occasionally, family members get together and split the obligation among the family. A senior who is aging at home may take out a HELOC or mortgage. And when moving into an assisted living community, a senior may sell or rent their home to cover the costs.

Medicare Does Not Pay For Assisted Living Residences

Seniors are often surprised to find that Medicare is of little help with assisted living costs. Medicare does not pay for assisted living. However, there are some limited benefits for short-term stays in Medicare-certified skilled nursing facilities.

Veterans Benefits for Long-Term Care and Assisted Living

Many veterans don't know the benefits that may be available to help pay for long-term care or how to apply for these benefits. The veteran benefits program is run through the US Department of Veterans Affairs.

To access these benefits, there are service and other requirements, as well as an application process. But if your senior loved one qualifies, the additional revenue from the program can be a continuing benefit toward their assisted living and long-term care needs.

Long-Term Care Insurance

Long-term care insurance is designed to help seniors by paying for services that are not available through health care insurance. These policies typically help with both assisted living costs and home health care expenses. About 7 million US residents have some type of long-term care insurance in place. Different policies and programs specify what they will and will not pay for and for how long. 

Newer policy programs have more options, including hybrid policies with some life insurance features. The best time to buy a long-term care policy is when you are younger. Premiums get more expensive as you get older. 

Be sure to review the policy with your California estate attorney to understand the specific benefits and exclusions, such as pre-existing conditions. 

Legal Considerations and Important Documents 

Having a qualified California on your team is essential for estate planning and long-term care planning. 

Proper legal documentation is essential in long-term healthcare planning. Advance healthcare directives and living wills specify an individual's medical treatment preferences. Durable powers of attorney for healthcare appoint someone to make medical decisions on the individual's behalf. Durable powers of attorney for finances designate a person to manage financial matters. HIPAA authorization forms grant access to medical records. Conservatorships provide legal authority for someone to make decisions on behalf of an incapacitated individual.

These are all vital documents, and your estate planning attorney can help you with all of them.

How Can My Estate Planning Attorney Help?

Your California estate planning attorney will help you with tools, plans, and strategies to maximize your finances and reduce taxes so you can leave your estate to your loved ones in the future. Part of that strategy is asset protection, and part is preparing for future expenses, like long-term health care. 

Estate Planning, Wills and Trusts, and POA

Your estate planning attorney is the logical choice to help with your long-term care plans. Estate planning is a critical component of preparing for your family's future. It ensures that your wishes are fulfilled when you are no longer here. Your estate planning attorney helps you create a comprehensive estate plan that considers your wishes, family dynamics, and legal or tax considerations. 

And they also create the proper legal documents, including a will and a trust, and help appoint a power of attorney to make decisions on your behalf should you become incapacitated. Part of your estate planning attorney's service is drafting living wills, revocable trusts, health care powers of attorney, and advanced health care directives. 

Developing a Plan for Long-Term Care

The best time to plan for our later years is now. Your attorney can help you evaluate your options, such as self-funding, Medi-Cal, or long-term care insurance, and develop a plan that meets your needs and protects your assets. Navigation health care, long-term care, estate planning, and financial planning can be complex. 

Your estate planning attorney is your best guide to help you and your family protect your assets and prepare for the future, including long-term care planning.

When Should You Prepare For Long-Term Care?

You should prepare for long-term health care as soon as possible. 

Almost all of us will need some medical and other assistance as we age. It is just part of life. But home health care and assisted living are expensive.

Long-term care insurance gets more expensive as you get older. And if you are planning to pay privately, time is a powerful tool when crafting financial and estate planning strategies.

To protect and grow your estate, you need a financial and estate planning strategy that includes long-term care.

But health care, finances, taxes, and estate law can seem overwhelming. 

Advanced planning with a qualified California estate planning attorney is always the best option.

Let us help you choose the best options for you, your family, and your business.

At San Diego Legacy Law, our trust attorneys work closely with clients to evaluate their personal goals and available assets before incorporating trusts into their estate plans. Our founder, attorney Nicole D'Ambrogi, holds an LLM in International Taxation with concentrations in Financial Services and Wealth Management, which allows her to strategically analyze the many variables that can affect your ability to meet your estate planning goals instead of focusing on simple document preparation.

San Diego Legacy Law serves clients throughout San Diego and those in La Jolla, Del Mar, Rancho Santa Fe, El Cajon, Poway, Spring Valley, Chula Vista, Santa Rosa, Petaluma, Novato, and Healdsburg.

Contact us today to schedule a consultation to discuss your estate planning and asset protection needs.

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