Estate Planning Isn’t Just For The Elderly

Happy, smiling couple in their sixties.

Financial planning tools beyond private payment for long-term care

On Behalf of | Jun 26, 2024 | Trusts

When planning long-term care, many people focus solely on spending their money to pay for their care. However, several other financial instruments and strategies can be just as effective and more cost efficient. Expanding your financial planning toolkit offers enhanced flexibility and peace of mind.

Long-term care insurance

Long-term care insurance covers costs that aren’t covered by Medicare and health insurance. It prevents long-term care costs from depleting savings and assets. It also may provide a wider range of care options, including in-home care. You can also tailor this insurance to fit individual needs and financial situations.

Life insurance with long-term care rider

A life insurance policy with a long-term care rider is a uniquely beneficial policy. This combines the benefits of life insurance with long-term care coverage. This policy allows you to use some of the death benefits to cover long-term care costs prior to passing. However, it will still provide a payout to beneficiaries upon death of any death benefit remaining.

Pooled trusts

A pooled trust can be a good option for individuals with disabilities and pooled income trusts can also be used to shelter surpluss income for Community Medicaid Benefits in New York. These trusts allow individuals to pool their resources together for trust funds. Individuals can use these funds while maintaining eligibility for public benefits. Individuals can use these funds for various needs not covered by Medicaid. A non-profit organization manages this trust, providing trustworthy, professional management of trust assets.

Medicaid asset protection trusts

Medicaid asset protection trusts (MAPTs) protect Medicaid eligibility. By transferring assets into this irrevocable trust, individuals can still qualify for Medicaid. However, they can maintain this eligibility without spending down their assets. The funding of a MAPTs starts a five-year penalty period for Nursing Home Medicaid benefits in New York. However, after five years, the funds in the trust are fully protected for Medicaid purposes.


Annuities provide steady income for retirees, which may help cover long-term care costs. Certain types of annuities offer benefits that complement other financial planning tools. Individuals can tailor annuities to their financial situations, benefitting from tax-deferred growth.

Innovative financial strategies

Several innovative strategies can further enhance your financial planning for long-term care. Hybrid financial products combine features of insurance and investment products. In doing so, they offer more comprehensive coverage and flexibility. Individuals can also convert traditional retirement savings into Roth IRAs. This provides tax advantages and greater control over distributions. Utilizing home equity through reverse mortgages also frees funds for long-term care needs, but may be less beneficial in the long run than use of a MAPT or other techniques discussed above.

Preparing for the future with confidence

Utilizing innovative financial tools will help you better prepare for the future. It can be hard to wonder whether your loved ones will be okay down the road. These tools offer a more flexible way to secure your long-term care and estate planning goals. This protects your financial legacy, allowing you to focus on the physical and emotional support of an aging loved one and/or disabled individual needs.