During estate planning, the goal is often to leave as much as possible for beneficiaries. Testators plan in advance to minimize taxes and preserve their most valuable resources from creditor claims. They may even take on co-owners or make transfer-on-death arrangements to keep some of their assets out of probate court.
Optimizing what beneficiaries inherit and preserving resources for them requires careful attention from testators. They may also need to think about what happens as they age, in addition to what happens after they die. Many older adults eventually require long-term care. They require visits from nurses or home health aides to continue living independently. They may need to move to a nursing home or an assisted living facility because they cannot safely remain independent.
In such cases, prior planning for long-term care can have a profound impact on what the older adult’s loved ones eventually inherit from their estate.
Why is long-term planning critical?
The cost of in-home support or a bed in a nursing home can quickly consume the assets an individual owns. Older adults trying to cover all of their expenses out of pocket may end up liquidating all of their resources in their golden years, leaving nothing for their beneficiaries.
The other option for covering long-term care costs is to apply for Medicaid benefits. However, long-term care benefits usually lead to estate recovery efforts after the Medicaid recipient dies. The Medicaid estate recovery program can lay claim to any remaining financial resources or personal property.
It is even possible to force the liquidation of the decedent’s primary residence to recover the amount spent on their long-term care in their golden years. People who intend to leave resources for their children or grandchildren may have nothing left for their loved ones to inherit if they don’t plan in advance to cover the costs of long-term care.
Older adults who may require support as they age need to plan carefully if they want to preserve property for their loved ones after they die. A thorough estate plan can help people afford long-term care without consuming all of their assets in their final years or putting them at risk of claims in probate court. Integrating elder law concerns, including long-term care planning, into estate planning can help people preserve a legacy.