How Proper Estate Planning Can Protect Against Long Term Care Expenses

The estate planning process involves more than just deciding who will get what after we pass away. In fact, estate planning can serve several different purposes, including helping us prepare for the possibility that we may eventually need to pay for long-term care expenses. For help adapting your own estate plan to address possible future chronic incapacity-related costs, please call Alan G. Orlowsky, one of our dedicated Northfield estate planning lawyers today. 

Asset Protection Trusts

Many estate plans fail to plan for chronic ill health, which may require funding to cover the cost of personal care needs and everyday tasks on a long-term basis. Unfortunately, this kind of oversight can have devastating consequences on a person’s finances, as Medicare and many private health insurance companies do not cover these costs. One of the best ways to avoid this scenario is to use properly structured trusts, which, when integrated into an estate and retirement plan, can help ensure that any long-term care expenses that suddenly arise, will be covered. 

One type of trust that many people choose to make part of their estate plan is known as an asset protection trust. These trusts can help shield testators and their spouses from the costs of long-term care, while also protecting the inheritances of loved ones. This is achieved by placing the assets in an irrevocable trust, which means that the assets cannot be touched by the testator and so will not count as income when calculating his or her net worth. 

This can, in turn, help people qualify for Medicaid, which, unlike private insurance and Medicare, does cover the cost of long-term care expenses for those with chronic illnesses, disability, or age-related restrictions. Those who don’t take this step could end up being ineligible for government benefits because their resources exceed the government limit. It’s important to note, however, that irrevocable trusts are subject to Medicaid’s five-year look-back period, making it particularly important to begin the estate planning process early.

Long Term Care Insurance

Another way to help protect the bulk of your estate from long-term care expenses down the road is to purchase a long-term care insurance policy. These policies give policyholders the option of receiving long-term care in their home or a private facility. The premiums for these kinds of policies are, however, generally lower for younger policyholders who are in good health. Those who wait too long, or until they are already ill, could end up facing prohibitive costs for a long-term care policy. 

Speak with an Estate Planning Attorney About Preparing for Long Term Care

Our lives are unpredictable, so it’s a good idea, especially when involved in the estate planning process, to think ahead to the time when we may require assistance to prepare for long-term care expenses. For help addressing these kinds of issues in your own estate plan, please call Orlowsky & Wilson, Ltd. Attorneys at Law at 847-325-5559 to speak with one of our dedicated Evanston estate planning attorneys today.

Updated as of July 2019
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