If you are age 65 or older, it will get increasingly difficult to secure long-term care insurance, especially after age 70. In fact, according to the American Association for Long-Term Care Insurance and a 2022 Milliman LTC Survey, about half who apply for it are rejected. One factor is that less and less insurance companies are offering long-term care insurance, as it is hard to make a profit because the cost of long-term care is skyrocketing. The second factor is that you need to apply when you are in good health. Insurance can be denied for mental illness, Alzheimer's or other dementia, drug addiction and certain pre-existing conditions such as diabetes, heart attacks, joint replacements and kidney failure.
If you cannot qualify or afford the insurance premiums, we recommend that you establish a Senior Asset Protection Trust. It is a different trust than the Revocable Living Trust recommended for classic estate planning. Revocable Living Trusts provide good protection against senior financial exploitation and can help you avoid probate if all assets have been retitled into the trust. But it does not protect you against the cost of nursing homes or other medical expenses. With a Senior Asset Protection Trust, your assets can be protected against medical and nursing home bills. It can accelerate your qualification for Medicaid or veteran’s benefits without being poor.
This is important because the cost of long-term care is increasing. In our area, a caregiver can cost more than $30 per hour and nursing homes can reach $16,000 per month. It is not unusual for someone to spend more than one million dollars on care in total. Because of this, when one spouse starts to need long-term care, the other spouse may be worried about becoming destitute. Fortunately, the Senior Asset Protection Trust may be a solution.
Of course, there are important legal steps to take to create this type of trust and to ensure its proper operation. In fact, we review the process in detail during our complimentary seminars, “3 Reasons to Invest in a Senior Asset Protection Trust” (online) and “How a Medical Diagnosis Can Impact Your Lifetime Assets” (in person) which you can register for below.
Please don't hesitate to contact me with any trust questions you may have. We are here to help.
Sincerely,
Yahne
Yahne Miorini, LL.M
