Planning for Long Term Care: Examples

 

 

What exactly do we mean when we say “planning?” Here are some examples of how people might plan for long term care before they need care. While these are fictional illustrations, they represent a variety of real-life situations.

Each example describes a different planning option and the reasons for making that choice. Reading these considerations and suggested plans can help you think through what might be best for you.

The people described below are composites drawn from a variety of real-life scenarios; they illustrate the range of personal circumstances people might find themselves in and the different forms that “long term care planning” might take. There is no “one-size-fits-all” plan. As you read these examples, think about your own circumstances and the types of options you might want to consider.

Case Examples of People Who Planned for Long Term Care

Mrs. F is 81. She has osteoporosis, arthritis, and high blood pressure. Otherwise she is basically healthy, but frail. She lives on a limited, fixed income and does not have significant assets to draw upon to help her meet her long term care needs. She has been living in a modest one-bedroom rental unit, but is finding it difficult to maintain her apartment on her own.

Plan:

    • Pay for modifications to daughter's home (outfit spare bedroom and second bathroom for Mrs. F).
    • Move in with daughter.
    • Establish "Health Care Advance Directive" and create "Durable Power of Attorney."

"My daughter and I, we have a good time together. I know that until my time comes she'll be with me, helping me. It was hard to talk about some of this, but I feel good that she understands. I worked all my life and I want to be at home. I don't want to be in any hospital or nursing home."

Mrs. W is 78. Since having a stroke several years ago, she depends on a wheelchair to get around. She and her husband still live in the three-bedroom house they bought when they were first married. The home's value has increased dramatically since they bought it and they are lucky to have paid off the mortgage a few years ago. The upkeep of such a large home is taking a toll on both her and her husband.

Plan: 

    • Sell home and use the resulting proceeds to move to a Continuing Care Retirement Community ("CCRC") when she and her husband turned 75.
    • With no children, Mr. and Mrs. W. decided to establish a Charitable Remainder Trust to pay for their care and willed the remainder of the trust after they both passed away to the California Horticultural Society.  

“George and I were fortunate all our lives. We both worked and managed to save. We don't really have any family. Both of us were only children and we never had any of our own. We wanted to be able to stay together as long as we could, but be sure that the other would be cared for, no matter who was first to go.”

Mr. C is an 82 year old widower. He lives in the modest home in which he raised his children. He has prostate cancer and has had a pacemaker for the past two years. At this point he is still able to take care of all his physical needs and he is very keen on remaining at home to receive the care he needs, because of all the wonderful family memories it holds for him. But his income and assets may not be enough to pay for the care he needs at home.

Plan:

    • Stay at home and receive care there if necessary.
    • Pay for care with a combination of savings and a reverse mortgage.
    • Son and daughter to coordinate care and repay the reverse mortgage loan amount when it is due (upon Mr. C's death or when and if he needs to permanently move out of the home). His children can keep the house in the family if they wish, after paying off the loan amount from other financial resources they or Mr. C have, or they can sell the home and use the proceeds to pay off the loan amount. They are allowed to keep any additional funds from the sale of the home that exceed the loan amount to be repaid.

“I know I'm not gonna be around forever. But I told my kids I was going nowhere! I want to be in my own place. Me and the dog. My son lives here in town and my daughter is only a few miles west. We worked it out so the house can help pay for care if and when I need it and then it's theirs when I'm gone. I don't want to be a burden to no one, but they're good kids and this way I get to see the grandkids too. They mow the lawn. This house has important memories for me, but once I'm gone, the kids already have their own places; they don't need or want this house, so I like the idea of putting the home's value to work for me!”

At 46, Ms S had the opportunity to purchase long term care insurance as a Federal employee. She has chosen coverage that will allow her to be cared for at home, in an assisted living facility, or in a nursing home if necessary. She bought the policy now since the cost is based on her age when she buys it. Waiting would only mean higher premiums and the possibility that she might develop a health condition that would cause her to be declined for the insurance. She does not want to have to rely on her family to pay for or provide care for her if and when she needs it. She likes being independent and having peace of mind that comes from planning ahead.

Plan:

    • Purchase long term care insurance, which she pays for through an automatic deduction from her bi-weekly paycheck.
    • Prepare a living will so that her family will know her preferences and wishes for care and life support if she becomes unable to communicate or carry out her preferences on her own.
    • Speak with daughter and niece and specify her preferences for care.

“Long-term care insurance is a great deal for someone like me. I have a daughter and a niece I'm close to, but I don't want to become a problem for them; they have their own busy lives. This way, we're there for each other, but when the time comes that I get sick or very old, they will know what I want and I've set up a plan ahead of time. I don't want to worry and I don't want them to worry.”

Source: National Clearinghouse for Long Term Care http://www.longtermcare.gov