What is Long-Term Care?
Long-Term care is medical care or personal assistance provided by a caretaker or a facility for a period of weeks or months (or longer). Neither the level of care nor the length of time is subject to exact definition. “Long-Term Care” refers instead to the condition of extended or permanent dependence on care from another person.
Long-Term Care can be provided in nursing homes, adult family homes, assisted living facilities, congregate living arrangements, adult day care centers and in a person’s own home or apartment. This list of Long-Term Care settings is arranged roughly from more restrictive to less restrictive settings, though seriously impaired individuals might be cared for at home in surroundings that mimic more institutional settings, and some institutions (especially adult care homes) may be homelike and inviting.
How much does Long-Term Care cost?
The cost of Long-Term Care varies widely by geographic region, level of care and individual facilities and caretakers. Costs vary tremendously, with larger metropolitan areas and eastern states generally seeing higher costs than smaller communities in the south and west.
In Washington, the average statewide rate for skilled nursing is $9,525 as of January 2018, according to Medicaid. In practicality, however, the rates charged often are $10,000 to $12,000 per month.
Adult family homes and assisted living facilities typically charge about half of the skilled nursing rate. The actual cost is dependent upon the care provided and the facility. Care in the home may be the least expensive or most expensive, depending upon the level of care a person needs.
Who pays for Long-Term Care?
Care provided by family members without formal payment accounts for the largest share of Long-Term Care provided. More formal Long-Term Care arrangements in the home and in institutions are paid for by the person’s income and savings, Long-Term Care insurance, and government benefits, such as Veterans benefits, and Medicaid.
Medicare does not pay for Long-Term Care, except for a limited exception of up to 100 days of rehabilitation. Medicare limits its Long-Term Care benefit in skilled nursing facilities to exclude “custodial care”. Thus Medicaid pays for rehabilitation services, such as physical therapy, occupational therapy, and speech therapy, but not for facility costs if rehabilitation care is not being provided.
How can I protect my assets from the cost of Long-Term Care?
A Will with an Asset Protection Trust protects assets for a surviving spouse or any beneficiary. To allow for flexibility, funding of the Trust can either be mandatory or contingent. If contingent, upon the death of the first spouse, a decision will be made at that time made whether to protect assets through funding the Asset Protection Trust for the surviving spouse with the deceased spouse’s assets. Importantly, the Asset Protection Trust shields assets from unnecessary depletion. Assets in the Trust are not considered “countable” by Medicaid or other government needs-based benefit programs. Thus a Will with an Asset Protection Trust helps you avoid depleting funds unnecessarily, and is especially useful if expensive Long-Term Care is needed by the surviving spouse. Couples can protect 50% to up to 100% of their estate from Long-Term Care expenses, creditors, and the State.
A Will with an Asset Protection Trust not only protects assets for the surviving spouse but also for other beneficiaries should they need asset protection at the time they inherit. Furthermore, assets that remain in the trust ultimately will be distributed according to the wishes of the first spouse to pass, thus avoiding “unintentional disinheritance” of your beneficiaries due to unforeseen future events, such as remarriage.