In my previous blogs, I candidly shared our family’s experience with Crisis Long-term Care (LTC) Planning when my mom was critically injured after a car accident. I wanted to offer honest, firsthand insight into the financial carnage and emotional impact of being financially unprepared for a long-term care event.
(If you missed those blogs, let me encourage you to follow the links at the end of this blog to read our family’s story.)
Why did my family suffer through the stress, worry, and financial repercussions of Crisis LTC Planning?
We failed to recognize the severity of a long-term care event that occurs when a plan is not in place in advance.
The impact was multi-generational, changing the course of life, not just for my parents, but for all those who loved them.
Advanced LTC Planning means proactively putting a plan together that will cover the cost of care and preparing for a change in lifestyle should an individual or couple need assistance with activities of daily living. Advanced LTC Planning is often overlooked as an important part of retirement planning by those who have not witnessed the financial devastation created by a long-term care event.
In contrast, Crisis LTC Planning involves making difficult, far from ideal, financial decisions under duress. The necessary decisions involve selecting options that often would be viewed as financially unsound before the crisis occurred, but now are financially necessary to protect as many assets as possible. This mad dash to protect family assets is inefficient and emotionally draining.
The differences in Advanced LTC Planning and Crisis LTC Planning are striking as the list below illustrates:
Advanced LTC Planning
Calm, thorough evaluation of assets
Review of wills, deeds, and other legal documents to ensure they are in order
Consideration of insurance to cover costs
Establish wishes and expectations
Consider best- and worst-case scenarios
Sound financial preparedness is the goal
Crisis LTC Planning
Mad dash to make decisions with tight time constraints
Financial decisions made under duress
Potential need to utilize a fee-based specialist to navigate options
Insurance no longer an option
Wishes of person needing care may have to be assumed
Minimization of financial loss is the goal
While income is often the main or even only focus of retirement planning, bear in mind that the cost of long-term care could substantially reduce, or completely deplete, income needed by the surviving spouse to cover their living expenses. Crisis LTC Planning could result in the need to sell assets that were intended to be passed down to future generations, or liquidate investments that were meant to generate income. The need to liquidate investments might occur during a market downturn when values have decreased, which obviously was not the plan when the investment was made. In the absence of Advanced LTC Planning, these financial decisions will always be made while the family is under duress, compounding the emotional stress of loved ones who want to help the family member who needs care.
My family’s story was unique in that a car accident was the event that changed everything for us. For your family, the life-changing event that leads to the need for long-term care could be Alzheimer’s Disease, Multiple Sclerosis, Parkinson’s Disease, stroke, or even a fall that results in bone fractures.
Most individuals assume, and often hope, that their mental or physical decline in later years will be slow. The assumption is that there will always be time for them to prepare. For those who don’t conduct Advanced LTC Planning, they might not consciously express their assumption that they will always have time, but they have subconsciously assumed this is the case.
By taking no action to prepare for a long-term care event, they have effectively decided not to plan, thereby assuming all the risk and all the emotional turmoil resulting from not being prepared.
They failed to recognize the potential impact upon their family, their financial situation, and the level and quality of care they will be forced to accept by not having a plan.
My family experienced the results of failure to plan for long-term care. It is challenging, to say the least, to fully express what we went through. My siblings and I chose to be all in for my parents, which resulted in the unavoidable, emotional turmoil as we stood at the side of Mom’s bed during her recovery, while also working through how to fund her care for the future. We were thrusted into both a medical and financial nightmare. We quickly recognized that our primary goal was to minimize the financial loss resulting from the care Mom would need for the remainder of her life, while salvaging what we could to cover Dad’s future needs for income.
It doesn’t have to be that way. Advanced LTC Planning can protect your assets and future income from the costs of long-term care by thoroughly reviewing what is at risk (all your assets) and preparing a plan to mitigate this risk. Securing a long-term care insurance policy can protect your assets and provide additional income to cover this cost. Several LTC insurance options have recently become available, including guarantees against increased premiums, lifetime protection, and a death benefit should you use little or none of the LTC benefit.
Let me encourage you to work with an experienced insurance agent who can show you the available solutions, help you determine your needed benefit, and help you examine ways to transfer this risk away from your estate. I would be happy to help you connect with an agent in your area and answer your questions directly. Remember, my family’s story doesn’t need to be your family’s story.
Follow these links to read our family’s story:
When You Become a Statistic, The Statistic Becomes Irrelevant: Mom’s Story, Part 1
Advanced Long-term Care—Protect Yourself and Those Who Love You: Mom’s Story Part 2
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