As a healthy adult in the prime of your life, it’s natural to assume that health will be a gift you can enjoy for the rest of your life. Very few people want to think about losing their health and independence as they age, but that does become the reality for many older adults.
Unfortunately, as people get older, they may experience serious medical conditions. Even if your parents have enjoyed good health for much of their later years, that doesn’t mean you will have the exact experience that they have.
Particularly if you have significant assets or a plan for a specific personal legacy, you may need to think about what happens if your health declines significantly as part of your estate planning process.
Even those with excellent retirement savings struggle with long-term care
Some people may think that they don’t have to worry about protecting their assets or covering the cost of their own medical care as long as they have adequate retirement savings. However, these individuals might just have underestimated the cost of long-term care.
Living in a nursing home facility can cost thousands of dollars a month and will rapidly diminish what assets you have available. Medicare won’t cover those costs, which means you may need to apply for Medicaid. In order to qualify for Medicaid, you may have to diminish your personal belongings almost entirely, meaning you will have nothing left to leave behind to the people that you love.
Asset protection and Medicaid planning go hand-in-hand
Taking steps to protect your most valuable assets, such as your family home, from creditor claims is a process known as asset protection planning. It often involves joint ownership with the people you intend to inherit it or possibly moving assets into a trust so that you don’t have direct legal ownership of them anymore.
Medicaid planning often involves a very similar process, although the goal is more on diminishing the overall value of the estate to ensure that a person can qualify for Medicaid, rather than protecting assets from creditors.
If you want to leave something significant behind for your children or grandchildren when you die, planning for worsening health as you age now can go a long way toward protecting your family treasures and ensuring a legacy.