Senior care is expensive. There’s no sugar coating that fact, unfortunately. Even if you decide to leave your fulltime job to provide care for a loved one, you are paying quite a bit to do so, albeit in the form of an opportunity cost. Medicare is something that the vast majority of senior citizens qualify for, but this doesn’t offset all senior care costs that will be incurred. Medicaid or Medi-Cal is an option for some, but not all. If this doesn’t fit your family’s needs easily, it’s time to start thinking about what will be most cost effective for your particular situation. Here, we’ve listed some of the common methods of paying for care that don’t rely on Medicare, Medicaid, or long term care insurance.
Annuity
An annuity is a form of life insurance, and it acts as a type of protection against living a long life. They can be structured so that a lump sum of money is put into them, it accumulates interest, and then the money is paid out plus interest. In the event that senior care is needed, the beneficiary can be the assisted living facility or in-home care service that is providing assistance to you or your loved one. Don’t forget that there are options out there that can allow you to use an annuity to pass money down to an heir, and not lose what you have saved when you pass away. An annuity can be structured by a skilled insurance specialist so that the costs of senior care are taken care of, or at least offset in a big way.
Trust
There are a number of different trusts out there, some of which will leave individuals eligible for Medicaid, if so desired. Either way, trusts are designed to protect your capital so that if you want to save it for a particular purpose, whether that be paying for senior care or something else. Living trusts also exist, so that your senior care provisions can be specifically laid out and your rights will be protected when it comes to care.
Personal Care Agreements
If you decide that you want to hire a caregiver for the next ten years, and pay them a lump sum upfront to protect your access to care, this can often be structured in a way that if Medicaid is needed in the future, it might be a possibility.
No matter what happens, it is important that you run any sort of agreement by a lawyer before it is made official. We are not lawyers, but these are choices that have worked for others in the past. Yes, some of these things sound great in theory, but not everything is that simple. When attempting to shield income for your family or anyone or anything else while establishing a way to pay for senior care for yourself or someone else, there are a lot of legal requirements that need to be considered. A senior care attorney will be able to help you further and let you know which, if any, of the above choices will work best for your family’s needs.
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