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Do the Rich Need to Plan for Long-term Care?

Posted by Thomas Asbury | May 07, 2023 | 0 Comments

Elder law attorneys focus on helping clients plan for long-term care. The U.S. Department of Health & Human Services estimates that individuals aged 65 and over, “[have] almost a 70% chance of needing some type of long-term care services and supports in their remaining years.” So, an elder law attorney usually has an abundance of clients needing services. However, is it only clients with limited or moderate means who need to plan? Should wealthy clients also have a plan in place for long-term care?

Nursing home care costs, on average, anywhere from $5,759 (Louisiana) to $31,512 (Alaska) per month. As you could easily tally up, paying these amounts month after month can drastically drain one's life savings. Having a plan in place ahead of time gives the client choices. Would the client like to pay out of pocket, have an insurance plan in place, or qualify for Medicaid benefits to cover nursing home care costs?

Is there a threshold of wealth where planning is no longer needed? While billionaires may not need to worry about nursing home expenses, most millionaires should.

  • If the client's wealth is tied to the housing or stock market, a bad couple of years could leave the client without enough funds to pay for care while waiting on a market rebound.
  • If the client's wealth is tied to a business, the business may have to be sold to pay for care.
  • Funneling distributions out of assets to pay for long-term care may have unwanted tax consequences, such as raising income to the next income tax bracket.
  • Paying out-of-pocket would likely leave the surviving spouse with a depleted net worth, jeopardizing their quality of life.
  • Without proper planning, the legacy for children and grandchildren could be exhausted.

No matter what financial means a client has, proper planning is prudent. Discussing the preferred kind of care and the payment options for such care can provide tremendous peace of mind. Thus, there will be no family crisis in the future if long-term care is required because arrangements would have already been made. Instead, the family can rest easy since there won't be a huge disruption in the family's life, or lifestyle for that matter.

About the Author

Thomas Asbury

Mr. Asbury is a graduate of the Wharton School of Business at the University of Pennsylvania. Before attending law school, Tom worked in the Internet sector as the Webmaster for the NFL’s Jacksonville Jaguars. While in law school, he published a law review article entitled Alternative Sentencing Theory, 3 Fla. Coastal L. J. 41 (2001), which identifies a constitutional framework within which defendants charged with alcohol and drug-related crimes can be remanded to faith-based programs rather than prison for non-violent offences. The logic is quite simple—as sobriety becomes the norm and addictions subside, so too do the often-accompanying crimes. His professional experience includes estate planning, corporate law, compliance law, guardianships, trademarks, probate, trust and probate litigation, including trust and will contests, administrative law, and consulting for business entities. Mr. Asbury has also lectured for NBI Seminars in the areas of Probate, Wills, Trusts, and Estates. Tom has also served on the Penn Admissions Committee for years as an alumni interviewer and is an international lecturer on the focus and philosophy of Ivy League admissions.


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