Long-term care planning is not something anyone can afford to wait for. If you think this planning is only for the elderly, you’re wrong. The rising costs of healthcare, the lack of access to preventative care when we need it most, the increased reliance on urgent care centers, and ultimately, the inequity in the deliverance of care when we do need it is the reason we need to begin planning well before retirement.
Housing is the starting place of the conversation. Is your home sustainable? When you’re in your 30s, you can easily handle the maintenance on a property and all that it might entail. But maybe your dream home isn’t where you’re living now. With our housing market being as seller-friendly as it is currently, maybe you’re waiting it out and making plans for the future. Those plans should factor in long-term care, whether that be for yourself or your parents.
As we age, our bodies begin to show the limitations that we are mostly able to ignore through our 30s, 40s, and 50s. Our hospital and urgent care systems are overwhelmed and primary care still seems predominantly inaccessible outside of major metropolitan areas. Finding a provider accepting new patients in smaller cities and towns requires a significant effort.
While age itself is just a number, it makes sense that by the time we reach the end of our working years, why so many people are sick, disabled, or generally unable to continue working. Yet, planning for “retirement” was traditionally the only conversation being had. No plan was created for being sick, disabled, or otherwise incapacitated. This is where long-term care planning comes in.
Long-term care planning is multi-generational. This means your plan should include your family to the extent that you want to incorporate them. Ask yourself how you’re going to visit with them. Will you be able to see them once a month, once a week, daily or even twice a day? How much time will it take for you to travel there? Is it on one of your normal routes or do you have to make a special trip? What happens when they need help with groceries, cleaning, or taking out the garbage? What role will you play in coordinating their daily activities and their care?
When You’re Ready to Retire
Most people talk about how retirement is when they plan to start living their lives. For some people that means that they will finally sell their home and make that move. For others that means that they will play more golf or enjoy spending more time with their family. Those plans become increasingly harder to follow through on when health issues arise.
One of the most important things to consider just before retirement is your home. If you plan to sell your home, doing so before retirement can give you the flexibility to purchase first and transition into your new home, then list your existing home on the market. It is a great time to downsize from the home you raised your children in, declutter and let go of things you held onto for years, and move into a home that requires less maintenance and cleaning.
For those who know that their home is where they plan to stay, take a look around and see what improvements are needed to make your home safer. Are there multiple levels with stairs? If so, is there an option to move a bedroom downstairs? What about a full bathroom? Do you have to go downstairs to do laundry? Investing in necessary improvements well in advance can save you money in the long run. A slip and fall down the stairs with the laundry basket is not only costly to your health, it can cost you your independence.
Taking the Next Step
Most people assume that if they have a health care proxy, a power of attorney, and a will, then they are all set. While it is important to have those documents in place, it is also important to talk to an attorney about what else you can do to prepare for the future. An irrevocable trust is another document that is commonly utilized in long-term care planning. While this type of trust does have restrictions and requires you to relinquish control to the trustee that you select, it offers the benefit of sheltering the asset that you fund it with. Oftentimes these trusts are funded with real estate, such as your home, because it will not produce any income and most people do not need to access the principal value of their home. The caveat is that this type of planning is most effective when completed at least five years in advance of needing long-term care. An experienced elder law attorney can review your financial situation and your goals to advise you whether funding an irrevocable trust with your home is appropriate for your situation.
This article is intended for general informational purposes only and should not be considered legal advice or counsel, nor does it create an attorney-client relationship.
Christine Szpet is an attorney focused on practicing Real Estate, Estate Planning and Elder Law. She advises her clients and their families on navigating the legal issues that come at the intersection of real estate, business succession planning, estate planning, and long-term care planning. Christine can be reached at firstname.lastname@example.org or (585) 672-5500.