As we have discussed in the past, there are 3 ways to pay for long term care. 1) You can use your own money; 2) You can use your long term care insurance if you have it; 3) You can utilize the VA Aid & Attendance program to help pay for in home care and the cost of assisted living facilities, and you can use Medi-Cal to help pay for a stay in a skilled nursing facility .
Most of our clients are not Veterans or the surviving spouses of veterans, and cannot tap into the VA Aid & Attendance program to help pay for in home care and assisted living facilities. Others may never need to go into a nursing home and utilize Medi-Cal. In addition, as it turns out, most of our clients do not have long term care insurance, and they find long term care insurance to be either impossible or too cost prohibitive to obtain.
Government benefits are available, but may become more difficult to obtain in the future. California will soon adopt the Deficit Reduction Act, which will make Medi-Cal eligibility more difficult. Medi-Cal can pay for your stay in a skilled nursing facility. VA will probably institute a look-back penalty period for gifting, and make that benefit more difficult to obtain.
Also, many Assisted Living Facilities now offer several levels of care including independent living, custodial care and care in memory wings. If you could utilize your own funds for the cost of the assisted living facility, you would probably like to stay there for as long as possible.
One way you can use you our own funds to pay for your long term care, is to possibly convert your life insurance policy into a Life Care Funding Trust. Some of our clients have asked whether they should let their life insurance premiums lapse, as part of budgeting for the cost of their long term care. Premiums on life insurance policies have typically been made for many years, and it would be a shame to let the policy lapse without a benefit to you.
We can explore whether your life insurance policy has a value that can be converted to a long term care benefit. As part of the process, we will present a copy of the policy to the Life Care Funding Company along with a simple application which includes some medical information about you. The Life Care Funding company underwriters will determine whether they will make a cash offer to you for the purchase of the policy, and for how much. If they make such an offer and you accept it, the cash is then placed into a Life Care Funding Trust for your benefit, and payments are made to your care provider on a monthly basis. You will then stop making premium payments, and you will benefit from the policy. Please let us know if you would like us to help you explore this possibility.
In the future, we will be discussing other unique ways we can utilize our own funds to help pay for our long term care.
For additional information, you can contact elder law attorney Michael J. Young. This information is not to be taken as legal advice, and you are encouraged to see your elder law attorney. At the Law Offices of Michael J. Young, at 1931 San Miguel Dr., Ste. 220, Walnut Creek, CA www.WalnutCreekElderLaw, 925-256-0298, lawyoung1@gmail.com we practice Elder Law and we help Baby Boomers, Seniors and families through their Elder Care Journey. We help families with long-term care planning, asset-protection plans, special needs trusts, comprehensive estate planning, wills, trusts and powers of attorney. We also help Baby Boomers and families get their “Ducks in a Row” in order help them qualify for Medi-Cal and the VA Aid & Attendance Improved Pension benefit.