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Who Should Plan for Long-Term Care? – Massachusetts

We are often asked who should plan in advance for the possibility of needing long-term care.  The simple answer, of course, is everyone.  We are all at risk of being disabled at some point and needing to depend on others for our care.

But some of us are at more risk than others, and depending on age and financial circumstances it may make more or less sense to take one or more of the various advance planning steps available.  Following is a list of factors to consider in deciding whether to action:

Age.  The older we are, the more likely we are to need assistance and the higher long-term care planning should come on our list of priorities.  Here are a few guidelines:

  • 21+.  Every adult should have a durable power of attorney and health care proxy naming someone they trust to make financial, legal and medical decisions in the event of incapacity.
  • 50-65.  While there are arguments for starting earlier, those in their 50s and early 60s should consider purchasing long-term care insurance.
  • 70+.  After 70, seniors who do not have long-term care insurance should consider sheltering their home and other assets in an irrevocable trust.

Finances.  Depending on your level of income and savings you will fall within one of three groups of people:

  • Wealthy.  Those wealthy enough to self-insure, have enough money to pay for their care needs, no matter what they may be, general estate planning should be sufficient.  They may still consider purchasing long-term care insurance, but it is not a necessity.
  • Poor.  If you cannot afford to pay long-term care insurance premiums or to set aside any assets in trust, then signing a durable power of attorney and health care proxy may be the only steps you take.
  • Middle-Income.  The vast majority of people are in the middle, meaning they have something to protect, but long-term care costs would seriously impact their financial well being and that of their dependents.  If you are in this group, you need to plan ahead.

Health.  If you are ill or have been diagnosed with a progressive illness, you are more likely to need long-term care sooner and planning becomes more imperative.

Family History.  While we are not condemned to repeat the health history of our parents, it can provide some guidance as to our own longevity and likelihood of needing care later in life.  It can influence our sense of when to take long-term care planning steps — early if a parent had early-onset Alzheimer’s disease, later if both parents stayed vital into their 90s.

In short, a lot of factors go into determining when to do advance long-term care planning and what steps to take.  But a good rule of thumb is to start taking steps in your 50s in terms of purchasing long-term care insurance and to consider sheltering assets in an irrevocable trust in your 70s.  Health, finances and family history may accelerate or delay the need to take these steps.

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