The Seven Steps of Long Term Care Planning
• Understanding the Process of Planning
• Understanding Care Settings
• Understanding Government Long Term Care Programs
• Knowing Who to Contact for Help
• Creating Sources of Funding to Pay for Services
• Using Strategies to Preserve Assets
• Creating a Long Term Care Plan
The Process of Long Term Care Planning
The process of long-term care planning involves the following four principles:
- Knowledge is the key to success.
- Professional help is crucial in saving time, money and stress.
- When is money available for care, caregiver stress is reduced and options are expanded.
- Success is assured through a written agreement with all parties involved.
Long Term Care Planning Is an Issue for Two Generations
Planning for an Elderly Generation All elderly people regardless of current health should plan for this crisis in their lives. And indeed, long term care can be the greatest crisis an older person ever faces. With the need for care, the elder loses his or her grasp on the three most important lifestyle concerns in old age;
- Remaining independent
- Having enough money
- Maintaining good health
They all disappear with the need for care. No wonder elderly care recipients withdraw, become angry and lose an interest in living. And the cost of care can wipe out a lifetime of savings and destroy equity in a home.
Lack of planning for the older generation has a major adverse impact on family caregivers as well. Typical effects include overwhelming stress, caregiver burnout and all too often, long-lasting family disputes and disagreements.
Planning for a Pre-Retirement Generation The need for long term care will happen to about 6 out of every 10 people. Because of this huge risk, all people in their late 40s and 50s should plan for the need for eldercare as they prepare for retirement. But for these younger persons, the seven steps do not normally unfold in a timely sequence. Planning for a younger generation needs to occur in phases.
At this age they should concentrate on providing funding and putting legal documents into place. Funding options such as special insurance plans or investments need to be initiated prior to retirement. Common funding techniques such as buying long term care insurance or putting money away through investments cannot be done at an older age.
After retirement, when living arrangements are certain and family care advocates have been identified, the remaining steps of long term care planning should be accomplished.
Knowledge Is the Key to Success
Incorporates Planning Steps 2 and 3
Understanding in advance, care settings and when and why they are appropriate will result in the most satisfactory experience for the caregiver, the care recipient and the family. Understanding how government programs work helps with the final decision-making process.
Prior knowledge prevents crisis planning.
Prior knowledge will save money.
Prior knowledge will save precious time.
Prior knowledge will rescue the caregiver.
Prior knowledge opens the door to other options. |
Professional Help Is Crucial in Saving Time, Money and Stress
Planning Step 4
Long-term care services are complicated and expensive. For the majority of Americans, eldercare is a do-it-yourself process. This approach is wrong. Using professional care advisers is the most cost effective and efficient way to provide help for a loved one. Hiring professional advisers to help with long term care is no different than using a professional to help with other complex issues. Does do-it-yourself make sense in the following examples?
• Sam has a 2003 SUV. He decides to purchase the $600 service manual and invest thousands of dollars in test equipment and in special tools to repair the vehicle himself. He feels he will save money by doing this instead of paying for expensive dealer repair services.
• Sally is involved in a complicated court proceeding. She decides to represent herself and invests countless hours in researching legal documents and reading books on how to represent herself in court.
• Jim runs a business with 100 employees. He has no experience in accounting or taxes but he decides his accountant and tax person is too expensive and he will invest the time and money in software to do it himself.
• Grace is a successful and busy professional who has little personal time. She doesn't like the idea of paying an investment adviser to manage her $1 million portfolio. She decides to manage it herself.
There is no doubt that given enough time and money a person could repair his own car, handle a court process alone, research tax laws or spend countless hours doing his own investment research. But most people are smart enough to recognize that the time and the stress involved are not worth it and they hire an expert to help them. And even if a do-it-yourselfer has enough time for research, that person is unlikely to have the experience in handling care situations that a professional long term care expert would have.
Experience only comes from dealing with countless hands-on, caregiving challenges.
A professional care manager should always be involved when the time for long-term care comes. The use of this expert is crucially important in any long term care plan.
Other useful professionals to consider are an elder lattorney, a long term care and financial planning specialist and an elder mediator. These experts help design the initial plan and can be just as valuable as a care manager in certain situations when the time for care comes.
Using the expertise of a long-term care professional is likely to result in dollar savings many times larger than the cost of hiring the expert. |
When Money Is Available for Care, Caregiver
Stress Is Reduced and Options Are Expanded
Incorporates Planning steps 5 and 6
Without money to hire professional advice or to provide the most desired care setting, the only option is to rely on Medicaid. This typically means a nursing home. Other limited options are available from Medicaid or from community aging services but they are often inadequate and there are usually waiting lists.
Common Funding Options
Long Term Care Insurance
Life Settlement
Reverse Mortgage
Cashing Out Of a Principal Residence through Sale or Buyback Arrangement
Retirement Savings Accounts
Life Insurance Arrangements
Common Asset Saving Strategies
Medicaid Planning
Rearranging Insurance Plans
Private Home Care Arrangements
Work Closely with the Doctor
Understand the Pricing of Community with Care Arrangements
Purchase the Right Long Term Care Insurance
Family Shared Care Commitments
Tax Advantage Strategies |
Success Is Assured through a Written Agreement with All Parties Involved
Planning step 7
People planning for long term care must make their wishes known to family or other involved caregivers, they must choose a care advocate, they must provide funding and they should have their legal documents already in place.
No plan is complete without a formal meeting and a written care agreement that is understood, agreed upon and retained by everyone involved. Everyone involved is also given instructions and checklists to follow when the time for care comes. Included are instructions on where to find current resources for long-term care planning steps 2 through 6. |
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