Fifth mistake (and solution) in planning for your long term care

This is our final post in the series of “Five mistakes commonly seen in long term care planning” — if you haven’t already feel free to read the first four mistakes so this one will make sense:

1. Assuming you or your family will not need long term care;
   
2. You not having a long term care plan or strategy;
3. Not having the proper basic estate planning documents; and
4. Transferring assets (including your home) without having proper legal advice.

Fifth Mistake: Not taking action before long-term care is needed

This is the most common one and the saddest mistake. Even if we know what to do, if we do not take action before that long-term care is needed, then we’ve got a problem. Even if we know what to do, if we don’t do it in time, it doesn’t do us any good.

I’ve got a couple of illustrations. If you say, “I don’t want any health insurance because I don’t want to pay the premiums” – look, I understand that. We have a BlueCross BlueShield policy that my law partner and I pay on and it’s a lot of money every month. It would sure be nice if we could have no health insurance and then if we get sick or have a problem, we go to BlueCross and say, “I’d like to buy the health insurance to cover that little problem I had yesterday.”

But it doesn’t work that way. I cannot call up my life insurance agent and say, “I died yesterday. Can you get me some more life insurance?” That doesn’t work. 🙂

It’s the same thing with long-term care planning. If we know what to do but we don’t do it, and now – suddenly – we’re in a crisis situation, there are options that are no longer on the table for us.

Again, Medicaid has very precise rules. If you give away assets, here’s how far back Medicaid looks. It’s five years that Medicaid looks back. Then if you did give away assets and you applied for Medicaid, here’s the penalty going forward once you need a nursing home and you’re otherwise qualified. The difference in somebody taking action now and somebody taking action five years from now may be hundreds of thousands of dollars’ worth of difference, so you need to take the action now while there’s still time to do that. 

Solution to Fifth Mistake: Take action now, before you need long-term care

There are four parts to the plan:

1. private pay;
2. VA pension;
3. long-term care insurance;  and
4. Alabama Medicaid.

We have some clients who say, “I don’t have any money. All I get is $800 a month from Social Security.” Well, the private pay is not really a valid option.

Some people say, “I’m not a veteran.” Well, the VA Pension’s not an option.

Some people say, “We just got the news that my husband’s got to go into the nursing home. Can I get long-term care insurance for him?” Probably not now.

Again, just figure out the options that you truly have and then design a plan. Then put that on a time table and say, “Here’s what I’m going to do. I’m going to go talk to an insurance agent by this day. I’m going to get a list of all my assets, all my income, by this date. We’re going to sit down with a lawyer or with a financial planner, or whoever it is, and go over it by three weeks from now.” Then, to completely steal the Nike thing, “Just do it!”

You can have a perfect plan, and if you don’t do anything, it does you no good. You have to lay out the plan and then take action.

Next Step To Take

We will be continuing this series and will work our way through these five common mistakes.  We hope you will enjoy reading these and more importantly that you will think about this and take action.

There are all different ways to take action and you have to decide what is best for you.

If you would like more information or if you want some guidance from us, you can call our office at205-879-2447 or fill out our online contact form to do any of the following (assuming you or your family live in Alabama):

• Set up a phone conference or video conference
• Set up an in office consultation
• Request our free information packages on long term care planning, including Alabama Medicaid and the VA Pension.

Thanks for reading this and feel free to share this article and to put any comments you have below.