As we’ve discussed previously on this blog, the likelihood that you will need long-term care is high, and the costs of it are significant. If you don’t plan to cover the costs associated with this care, then you could wind up using up all your hard-earned assets, leaving you with nothing to pass down to your loved ones. The thought of such financial upheaval can be disheartening and stressful, but there are effective strategies for long-term care planning that can position you to effectively cover your care expenses while still shielding some of your assets.
That said, the process is highly nuanced, and there are several mistakes that can be made along the way. That’s why in this post we want to shed some light on common errors that long-term care planners make, that way you know what to watch out for and how to protect your interests as you engage in the planning process.
Long-term care planning can be complicated. And the process is made even more treacherous by mistakes that can be fatal to your ability to qualify for MassHealth or otherwise cover your expenses. These pitfalls include:
- Miscalculating the cost of long-term care: To ensure you have enough financial resources on hand, whether through long-term care insurance, savings or Medicaid, you need to have a realistic understanding of how much your long-term care is going to cost. If you underestimate, which is common, you could find yourself in a difficult financial predicament when it comes time to secure that care.
- Thinking that you can avoid long-term care: A lot of people think that they can avoid long-term care, so they don’t even consider planning for the costs associated with it. Given that you have a high statistical probability of needing long-term care as you age, foregoing planning could be a major mistake.
- Procrastinating in long-term care planning: If you want to qualify for MassHealth/Medicaid, then the sooner you start planning the better. This is because these programs have a five-year lookback period that could subject you to penalties if you transfer wealth during that period to meet eligibility requirements. You’ll want to avoid that if possible, so start planning for long-term care while you’re still healthy.
- Thinking that you can rely solely on family: Although your family will likely step in to help as much as they can, it’s unrealistic and simply unfair to expect them to cover all of your long-term care needs. Not only is it a massive financial burden, but it can also be draining on their mental health, which in turn can affect their own families. Effective long-term care planning can help alleviate these burdens.
- Thinking it’s too late to generate a long-term care plan: While you’ll want to engage in long-term care planning as soon as possible, don’t make the mistake of thinking that it’s too late to take action to protect your interests. What’s important is that you get to work now so that you shield yourself and your assets as much as possible.
Long-term care planning is a crucial part of the estate planning process. So, don’t shy away from it. Instead, be ready to tackle this issue head-on so that you can rest assured that your care needs will be met while your assets will still be protected as much as possible. I