Caution: Plan For Long-Term Care Now!

The New York Times published an article two days ago entitled “To Collect Debts, Nursing Homes Are Seizing Control Over Patients.” As I began to read thearticle, two colleagues and a friend sent me a link to the story. We were all stunned.

In essence, author Nina Bernstein paints the picture of a nursing home taking control of a patient by going to court and attempting to get guardianship over her, even though the patient had valid powers of attorney (her husband was power of attorney). There was a billing dispute that led the nursing home to take such action. Read the article in full—it’s an eye opener. Article Link

I have not yet heard of a case yet in Pennsylvania where a nursing home has attempted to get guardianship over a patient, but it’s plausible that it could happen in the future. Imagine discovering that you have to go to court and spend thousands of dollars to fight for control of a close family member. Of course, there have been a couple cases in Pennsylvania under the filial responsibility law where the nursing home has sued a family member for recovery of medical costs.

Cases like these are few and far between, but still give us all pause. The situations are always extremely unfortunate, mostly for the family but also for our long-term care system in general. The question as a society we must confront is how to deal with the costly combination of skyrocketing long-term care costs and greater life expectancies.

Place yourself in the following situation that I have seen happen plenty of times in my practice: You have a sizable estate that you expect to pass to your children, and all of the sudden, you need long-term care and the estate is eaten up by the nursing home costs. It’s quite a dilemma. On one hand, you have a responsibility to pay for your care if you have the means to do so. On the other hand, you expected to leave your loved ones at least some of your life savings. This is more than just a financial issue, but a moral and ethical issue that is not easy to square.

Having said that, the best advice I can give is this: Do not wait until it’s too late to plan.

While you’re in good health (typically, 50’s and 60’s are appropriate ages), try to put a plan in place in case you need long-term care in the future. Financial planning is important, but so is protecting your dignity and legacy. As one well-known advisor put it to me years ago, “Do you really want your children to take care of you? Or would you rather have a professional handle your care, and allow your children to enjoy their visits with you?”

Some ideas for planning:

  • There may be some property that you can put into a Medicaid Asset Protection Trust so that it’s properly protected from ever being spent on your long-term care. This trust is appropriate for only certain assets and a portion of your estate, not your entire estate.
  • Consider insurance policies, either traditional long-term care or a “hybrid” life insurance policy that contains a long-term care rider.

In my office, we assist clients regularly with both strategies.

Planning for long-term care is difficult in general. Waiting until you actually need nursing care can cause intense stress on the family, and put your back against the wall. The earlier you plan, the more options you will have.