No one looks forward to getting older, nor do we like to think about it often. However, as you age, you realize how important it is to plan for life after retirement.

On average, two out of three senior citizens in America will end up depending on assistance with their daily activities due to disability or an illness. These daily activities include everything from bathing to dressing themselves, walking, eating, and more. 

This type of care often ends up being the responsibility of the closest family members, which may or may not be a burden in several ways. 

That's where long-term care and estate planning come in. 

When you include long-term care within your estate plan, you're ensuring that you and your loved ones will be covered should you become incapable of caring for yourself as you grow older. 

In this article, we're going to dive into long-term care in the state of Alabama and what it means to involve it in your estate planning.

Keep reading to learn more.

What Exactly Is Long-Term Care Planning?

In a nutshell, long-term care planning is choosing the who, what, and financial how of your possible future care should you become ill, disabled, or mentally incapacitated in your old age. 

As mentioned above, long-term care tends to fall on the shoulders of family members—which is usually due to poor planning and financial hardship. 

Therefore, when it comes to the actual planning part, you'll need to review the variety of services and insurance plans out there that will suit your needs best for an unknown period. Fortunately, there are plenty of programs and services under the Older Americans Act (OAA) of 1965 that can offer support whether you'd prefer to stay in your home or a community.

Elder Law in Alabama

Generally speaking, Elder Law is considered a subset of estate planning that focuses on helping the owner of the estate protect their assets against the costs of long-term care. It also focuses on ensuring that they can get their hands on any available benefits without an issueOf course, many of these available benefits come with stringent limits regarding assets and income. For example, you can use Medicaid to cover the cost of a nursing home, but that's only if you spend a certain amount of money—which is essentially everything you own down to approximately $2,000.

More often than not, people tend to lose everything they've worked for their whole lives simply because they didn't understand what it meant to plan for long-term care or how. That's why when it comes to estate planning in Huntsville, Alabama, you'll need to consult with the proper estate planning attorney in regards to the Elder Law and how it applies to you. 

Long-term Care and Your Estate Plan

Typically, when we talk about estate planning, we're talking about asset protection as well as how your accumulation of wealth will be distributed amongst your loved ones. 

Interestingly enough, roughly 64% of Americans don't currently have a last will and testament or a living will. This means nothing is standing between their estate and state government regarding how their assets will be governed or distributed in the event of a significant health crisis. Without a will, the courts will make these decisions according to the Alabama state probate laws, which often don't consider the needs of the family. 

Not having a will with a long-term care plan also means that your assets can be turned over to an appointed care facility as payment. This can end up putting you and your loved ones into a deep pile of debt. 

Fortunately, you have several options when it comes to estate planning and ensuring you'll get the care you need later on if necessary. 

Here's the breakdown of those options and what they apply to in regards to long-term care:

A Living Will

Having a living will is the first step to creating an estate plan. It's the document that outlines how your assets will be distributed should you become unable to care for yourself or pass away. 

This is the same document that will stand up in probate court, assuring you of three things:

1. Your family is taken care of appropriately without the state allocating your estate funds into a care facility

2. Your assets don't become depleted while waiting for an income-based Medicaid program to step in and cover any nursing home or other care costs 

3. The effects of Medicaid's estate recovery (which is when the government makes an attempt to recover any benefits paid out for nursing home or other care costs from your estate after you've passed) is minimized

Living wills—not to be confused with the last will and testament—are also referred to as medical directives. They allow you to continuously control any decisions related to your medical care—especially how you will be treated should you become unable to make decisions for yourself. 

A Durable Power of Attorney

A durable power of attorney (POA) is the person you would trust with the responsibility of managing your business affairs. Once appointed, this person will become your stand-in to make all the necessary financial decisions when you cannot do so yourself. 

Having a POA to manage your business and properties is your first line of defense in terms of keeping these assets from being liquidated or turned over to your care facility as payment.

It should also be noted that your POA is not the same thing as a health care proxy—which is the person you appoint to make medical decisions for you according to your living and/or last will. While you can give your POA the power to make medical decisions on your behalf, it's often best to leave your medical decisions to someone else entirely to avoid any power of attorney abuse.

A Trust 

Trusts are a critical aspect of estate planning as they essentially allow you to transfer your rights to certain assets to a chosen beneficiary. 

There are several different types of trusts, such as revocable living trusts, irrevocable trusts, life insurance trusts, etc. However, they mainly all serve the same purpose, which is inheritance and asset protection.

In other words, if you were to leave your family's home to your spouse or a child in the form of an irrevocable trust, that house will technically become their legal property as soon as the ink on the document dries. 

A Care Contract

A care contract is a document that works similarly to a trust. It allows you to legally transfer certain assets to a beneficiary but to provide care for you. 

This document would determine the services that would need to be provided and how those payments would be calculated. This is so your future caregiver is not only compensated for taking care of you. But it also ensures that they have everything they need financially to provide that care.

A Life Care Plan

A life care plan is a document including a comprehensive plan for your long-term care if unexpected complications arise. This plan will address how you would receive long-term care, in-home care, assisted living care, nursing home care, and the financial aspects.

It will also address seniors' common issues when they're caught off guard by a medical event, such as estate shrinkage, incapable POAs, and beneficiaries, liens, fraud, etc.  

You can think of estate planning as long-term care planning because any experienced Huntsville estate attorney will strongly advise you to include this type of additional planning when writing out your wills and trusts.

You never know what can happen when it comes to your health, which is why it's necessary to start your estate planning as soon as possible to ensure that you not only receive the care you need but your loved ones and other assets are taken care of as well. 

Contact us today to start your long-term care planning with Sara S. Shepard or another knowledgeable Huntsville estate attorney.