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Long-term care and asset protection: What you need to know

Protecting assets for future financial security may require adding a long-term care insurance policy. Which is right for you?

The U.S. Department of Health and Human Services reports that over 10 million people needed some form of long-term care assistance in 2000. These numbers were broken down to 3.6 million under the age of 65, and 6 million over the age of 65. The agency also reports that almost 70 percent of those turning 65 will require some form of long-term care. When the federal agency updates it data, it will likely find these numbers have grown with the aging Baby Boomer population.

As a result, it is wise for everyone, Gen Xers to Baby Boomers and everything in between, to consider long-term care planning.

Long-term planning: A growing problem

Long-term care planning goes beyond purchasing an insurance policy. Many more options are available and deserve consideration. Taking the time to plan can mean the difference between future financial security and financial disaster. A recent article in CNBC addressed the issue, noting even the wealthy are wise to take proper precautions when it comes to planning for long-term care needs. According to a poll cited in the article, 32 percent project their long-term care will translate into staying in their homes with private home care while approximately one in five plan on receiving care from a loved one.

A wealth advisor interviewed in the piece explains that a lack of proper planning can derail the financial plans for anyone, even those with assets topping two million. Some options that should be considered to keep financial plans in tact include:

  • Medicaid planning. There are steps that can help reduce the risk of losing assets that may be seized to pay for nursing home bills by implementing Medicaid planning techniques.
  • Long-term care insurance. These policies can assist in funding in home care needs and nursing home costs.
  • Hybrid life insurance. In addition to providing the benefits of a standard life insurance policy, these policies are structured to allow the policy holder to take withdrawals on the policy to cover long-term care costs later in life. These policies are generally purchased with a one-time upfront payment.

These are just a few of the more common long-term care planning techniques.

Long-term planning: An attorney can help

Navigating the various options can be an intimidating process, and is only one step in the many needed to help better ensure future financial security. As a result, it is wise for those interested in asset protection to contact an experienced asset protection lawyer. This legal professional will review your unique situation and tailor a plan to better ensure your needs are met.

Keywords: long-term care insurance estate planning asset protection