When creating an estate plan, questions arise about probate, wills, revocable trusts, irrevocable trusts, land trusts, joint tenancy, transfer on death designations, estate taxes, etc. Nearly all these questions involve planning for asset distribution when the person dies. However, as explained in a recent article, “The most overlooked issue in estate planning,” from High Plains Journal, there should also be questions about planning for what happens when people are still living.
The biggest threat to an estate is the cost of long-term care. This doesn’t necessarily refer to care provided in a nursing home. It is far broader and includes care at home, in an assisted living facility and a skilled nursing home.
One out of every two people will need some long-term care in their lifetime, reports the Centers for Medicare and Medicaid Services. The total cost of this care ranges dramatically depending on where you live. In the Midwest, it can easily cost between $10,000 and $15,000 per month, and twice that amount on the coasts. In Arkansas, the average monthly cost of long-term care is $8,502. Long-term care at home can be even more expensive, depending on the level of care needed. These monthly costs don’t even include medications or therapeutic services.
How do people pay for long-term care? For wealthy people, self-pay is possible, although with the right planning, they can protect assets from being drained by this method. Another is to have long-term care insurance. Few people understand the importance of this insurance. The CMS says less than 5% of Americans own LTC policies. Even if you can medically qualify for LTC insurance, it can be extremely expensive.
Many people opt to file for Medicaid to pay for long-term care. People with high and low net worth can qualify for Medicaid benefits, which is contrary to popular belief. For those with substantial wealth, an estate planning attorney can help protect assets, while ensuring eligibility.
Medicare, on the other hand, has nothing to do with long-term care costs. It does cover some skilled nursing benefits, but only for a short period, including rehabilitation. If there is no progress during rehabilitation or the number of days for coverage is exhausted, Medicare coverage ends.
Veterans and their spouses may qualify for a limited benefit from the Department of Veterans Affairs to pay for long-term care.
The final option is a combination of options that most people end up with.
Neglecting to plan for long-term care can lead to disastrous financial consequences for the patient and their family. Addressing these concerns with your estate planning attorney and planning for the future can provide significant peace of mind for the entire family. In addition, Power of Attorney, Power of Healthcare and Living Wills should be prepared to safeguard individuals and their loved ones from life’s eventualities.
Reference: High Plains Journal (May 9, 2025) “The most overlooked issue in estate planning”