I received a call from a woman who was concerned about her mother who had recently been diagnosed with early stage dementia. She is a veterinarian in California and her sister is a physician in Boston which is still 4 hours away from where the mom lives. The mother is only 73 years old and in very good health, physically. She has a group of close friends and one with whom she is particularly close, checks on her often.When I met with the mother, she was very open and forthcoming about her diagnosis, which is unusual. She explained she had a very amicable divorce about 10 years earlier, her ex-husband had been a successful businessman and she never had to worry about money. She felt he had been very generous and she was comforted the almost two million dollars she received in the settlement, would be enough to provide any care she might need.
I didn’t have the heart to tell her the truth.
The daughters were visiting over the holidays and we had a meeting about future care options. When I asked if they ever discussed long-term care planning with their mother, they said they had. They wanted to keep their mother home and nursing home was out of the question. Their plan was to use “all that money” for her care and what was left over would go to the daughters. It never dawned on them that there was a chance there would be nothing left after care.
The problem is, she is 73 years old with no comorbid health factors. She could easily live another 20 or 25 years. The cost of live-in home care will be about $120,000-$130,000 per year just for the care, it does not include living expenses or unexpected expenses such as needing a new roof or furnace etc. The daughters have some decisions to make. Do they spend thousands of dollars and seek the help of an attorney to shelter money or do they just try to budget well and hope for the best? If they involve an attorney it will mean telling mom they are concerned and that will cause her increased anxiety, which can exacerbate the dementia.
This is yet again another family that felt long-term care insurance was not necessary because she had “all that money”. This is short-sighted because the reality is she could have easily afforded the premiums. Obviously, there are only two scenarios’ here: she dies within 20 years and does not outlive the money, or she lives and does run out of money.
If a long-term care insurance policy were in place, it would cover part of the expenses. A policy that covered $5,000 or $6,000 per month ($60,000-$72,000 per year) would greatly diminish the probability of the second scenario.
Long-term care planning is essential for all your clients because when they have a long-term care event and they aren’t insured, the premium at that point, could be everything they own![insert page='boxes' display='content']