Covering the Costs of Long Term Care
By Rick Law, Senior Advocate and Estate Planning Attorney at the Estate Planning Center at Law Elder Law in West Suburban Aurora, IL. Just off of the I-88 tollway. When an individual is in need of long-term healthcare, people often turn to their own assets or savings to pay for such care. Unfortunately, due to the high cost of care, it won’t take long for assets to be spent down and for funds that were originally earmarked for retirement savings to quickly disappear. If not properly planned for, the need for long-term healthcare over a period of years can confront a family with three choices of means to pay for it. These choices include:
- The family can provide the necessary care informally (if they are able). However, doing so can come with serious costs to not just finances, but also to emotional and physical health.
- They can pay for care from an income stream. This, however, can come at a cost to both lifestyle and ability to meet continuing financial commitments – especially if there is a healthy spouse still responsible for regular household and other living expenses at home.
- They can pay for it with investments. If the illness or need for care lasts long enough, there could be a need to liquidate assets, potentially creating tax liabilities and jeopardizing the financial viability of the surviving spouse as well as children who may be depending upon an inheritance.