Long-term care encompasses the support services that individuals may need as they age or if they have a disability or chronic illness that requires assistance with everyday activities. In New York, these costs can be substantial, making early planning a crucial step for younger people. With nursing home care potentially exceeding $158,000 per year and home health aide services averaging $66,000 annually, these expenses can quickly deplete your hard-earned savings.
Why early estate planning matters
While you are still of sound mind and body, you have the power to secure your future and preserve your assets through proactive estate planning. You can also choose who will make decisions on your behalf should you be unable to do so in the future. Here are valuable tools you can incorporate in your estate plan:
- Trusts: Setting up certain types of trusts can be a strategic part of Medicaid planning. Trusts can potentially protect assets from depletion and mismanagement. These can also help maintain eligibility for Medicaid benefits. By placing your assets in trust arrangements, you can avoid the need for Medicaid spend down.
- Health care proxy: A health care proxy is a legally recognized document that allows you to appoint a trusted person to make medical decisions on your behalf if you become unable to communicate your wishes. By selecting a proxy early, you ensure that someone who understands your values and desires will guide your care. In the absence of a designated proxy, family members may disagree about the best course of action for your medical treatment. A clear choice can prevent such disputes and stress during difficult times.
- Power of attorney: If you become incapacitated, a financial power of attorney authorizes a trusted individual to manage your financial affairs for you, from paying bills to making investment decisions. This ensures that your finances continue to be handled effectively and responsibly. Without a designated power of attorney, the court may appoint a guardian to oversee your finances if you cannot do so.
If the time comes to move from your home to a nursing home or any other long-term care facility, having a plan in place ensures that you can make the transition smoothly and with dignity. On top of that, you can sleep well knowing your assets will be in good and highly capable hands.