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Phoenix, AZ – Self-Insure for Long-Term Care

For Elder Law in Phoenix, Chandler, or Mesa, you need a law firm with a good understanding of 3 important financial aspects as they relate to your portfolio: estate planning, elder law, and tax law. Phelps LaClair has been helping families successfully prepare a legacy for their heirs for two generations. As we all know, being ready for the possibility of Long-Term Care (LTC) is an integral part of estate planning, but you also want to leave a financial inheritance for your family. How can you do both? Read on to find out more.

Self-Insure as an Option to Pay for Long-Term Care

We recently wrote several blog posts on factors to consider when purchasing Long-Term Care Insurance (LTCI). Though LTCI is one way to be ready for an unanticipated stay in a skilled nursing facility, it’s certainly not the only option. With recent, steep premium hikes in LTCI, you might find another, better pathway to financial security.

Self-Insuring is another possibility. By self-insure, we mean that rather than purchasing Long-term Care Insurance and paying several thousand dollars per month over a period of years, you plan ahead and set aside money for future Long-Term Care needs. Current rates of skilled nursing facilities nationally are around $100,000.00, and the average stay in a nursing facility for those who are residents (rather than those who are being rehabilitated to return home) is about 2 years. In light of those statistics, setting aside $200,000.00 is a good goal. If you’re married, double that figure to $400,000.00.

Planning for Your Heirs

But using your finances for Long-Term Care could create a problem when it comes to providing an inheritance for your children or family. You may have adequate financial means to take care of yourself and your spouse. But if using that money means not having anything leftover to pass on to future generations, taking out a life insurance policy could be a solution for you.

Let’s say you purchase an amount of life insurance that is equal to the amount you’re setting aside for LTC: for example, $400,000.00. Then, in the event that you and your spouse need to use your personal finances to pay for LTC, the life insurance policy will still provide a replacement legacy for your heirs. And if you and your spouse never require Long-Term Care, the amount you’re able to leave to your beneficiaries is doubled through your purchase of the life insurance policy.  And, when life insurance is held in an irrevocable insurance trust, it allows the death benefit to pass to heirs free of estate taxes.

Personalized Portfolios

Each family’s situation is shaped by their financial assets. You want to maximize your investments, minimize tax burdens for yourself and your heirs, and effectively prepare for your golden years. As a firm strong in elder law in Phoenix, Chandler, and Mesa, AZ, we are able to help you with all aspects of being ready. We’ve got a diversified approach to estate planning that includes a good grasp of tax law, elder law, and estate planning. At Phelps LaClair, we’re ready to help you find the best pathway for successfully managing your assets. Give us a call, and let’s talk about your future.


Images used under creative commons license (Commercial Use) (9/15/18) (Mohamed_Hassan) Pixabay

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