I've been thinking about why long-term care planning is so complicated. The reason is that the future can take so many paths, from no need for care to a long-term nursing home placement, with one or more stops in between. The difficulty of predicting how we will fare is compounded when considering planning for a couple rather than for a single individual.
Neither member of a couple may ever need care, one might, or both might. They may need care at home, in assisted living, or in a nursing home. And it's not as if only one scenario occurs. The need for care may be a continuum, with home care working for a year, then assisted living, and finally a short period of skilled nursing home care at the end. The following chart can help illustrate the various situations in which any older couple may find itself.
Home Care Assisted Living Nursing Home
|2.||One needs care|
|8.||Both need care|
Even showing 10 different possible scenarios, this chart is far from complete. As is mentioned above, couples may pass through any number of these situations over time, some for many years and others for only a few months. The chart does not account for what happens after the first spouse passes away or for other alternatives, such as moving in with a child, or the child moving in with a parent or parents. In short, the possible outcomes for any individual or couple planning for the possibility of needing long-term care are, while not infinite, quite numerous.
This planning challenge is compounded by the fact that planning for one possible outcome, such as staying at home, may call for a different strategy from another, such as moving to a nursing home. Seniors planning to apply for care at home would usually be advised to keep as much resources available as possible to pay for their care needs. Seniors who are concerned about the high cost of nursing home care and who want to preserve assets to pass on to their children, would want to consider making gifts or transfers to trust now to trigger the five-year lookback for MassHealth.
As a result of these challenges, long-term care planning requires making educated guesses about the future and taking steps to put clients in the best position possible for the myriad futures they may face. For instance, they may transfer some assets into an irrevocable trust while keeping substantial assets out in order to pay for home or assisted living cares, as well as to cover their needs for up to five years. Planning also involves incorporating as much flexibility as possible so that clients can react when a disability or illness occurs. This can mean purchasing long-term care insurance or executing durable powers of attorney and revocable trusts.
The bottom line is that there is no one-size-fits all plan and that elder law attorneys and clients need to sit down together to discuss possible scenarios for the future, the clients' goals, and the pros and cons of various planning strategies.