Long Term Care Insurance and Your Estate Plan

Yee Law Group Inc. > Long Term Care Insurance and Your Estate Plan

Long term care insurance helps pay for the cost of care at assisted living and skilled nursing facilities.  The cost of this care has skyrocketed in recent years. You may or may not know how long terms care insurance works, but conceptually it’s the same as any insurance.  You pay a premium to cover you in the event of some occurrence, in this case needing long term care.

What many of my clients are unaware of is how their estate plan works with long term care insurance.  This article explains the connection between them.

Two cornerstones of any estate plan should be a healthcare power of attorney and financial power of attorney.  A power of attorney lawyer St. Peters, Missouri can assist you in putting these documents together, as they are vital.  That’s because powers of attorney allow people to make important decisions for you if you cannot make them yourself.  

With long term care, your healthcare power of attorney typically can place you into a skilled nursing facility if you do not have capacity to do so yourself.  They also can speak with the carrier to let them know you need to use the insurance benefits for care.

Finally, your financial power of attorney can utilize your income and assets to pay for this care, or even to plan for this occurrence years before with benefits planning.

An example of this would be Medicaid planning and may involve gifting money or creating an irrevocable trust to remove some or most of your assets from your name so that you may more easily qualify for Medicaid benefits (to pay for the skilled nursing care) down the road.

Wills and trusts often have nothing to do with long term care insurance.  The exception would be where you have created a revocable living trust, you are the trustee and you have become incapacitated and go no longer serve as trustee.  In that case, your successor trustee(s) can access trust assets to help pay for long term care.

As you can see above, the common theme with long term care and estate planning is that you have named fiduciaries to follow through with either utilizing your existing long term care insurance when you need it or helping you plan for long term care in the absence of (or occasionally the exhaustion of long term care coverage).  In either event, it’s clearly another important reason that having an estate plan is vital to you and your family.


Thanks to our friends and contributors from Legacy Law Center for their insight into long term care insurance and your estate plan.