Estate plans include many different legal documents. Comprehensive plans include insurance policies, wills, name an executor, and more. Some people plan for nearly every detail of passing their estate to their inheritors, focusing on an estate plan’s financial elements. Though these plans are necessary, people should not overlook the costs of long-term health care.

About 70% of people over the age of 65 will need long-term health care at some point in their lives. Long-term care is costly, so individuals must include these costs in the estate plan or risk everything.

Costs of long-term care

According to a 2016 survey from the U.S. Department of Health and Human Services, a private room in a nursing home could cost close to $8,000 every month. For in-home care, services can cost nearly $4,000 every month. People can plan to pay for health care in several different ways:

  • Medicare: Medicare is a federal coverage program that provides emergency medical services. Though Medicare does cover short stays in a nursing home and other long-term treatments, the benefits do not last long, and costs will eventually come out of pocket.
  • Medicaid: Medicaid helps low-income individuals cover medical costs. All citizens may take advantage of Medicaid but must reduce their income considerably. Retirees may liquidate high-value items in an estate plan, including retirement plans and property, to qualify.
  • Health insurance: These plans have become prohibitively expensive over years of a changing insurance landscape, so many states no longer offer them. People pay into these plans over decades and receive coverage when needed. If a person does not require long-term medical care, insurance companies keep the benefits.
  • Living benefits insurance policy: Some insurance companies offer policies that combine life insurance and health insurance. Those who need long-term health coverage can pull benefits from these policies. Everything unused pays out to a beneficiary upon death.
  • Asset-based policy: These newer policies take a lump-sum payment from the policyholder. The earlier a person purchases this policy, the more it will pay out when needed. Individuals may also take their assets back or request that it pays out as a death benefit.

Seek legal counsel for more options

Individuals concerned about accounting for long-term healthcare costs in their estate plans can reach out to a local lawyer familiar with healthcare planning. An attorney can discuss options, draw up paperwork and work with the courts on any complications.