Long term planning necessary as relative caregivers decrease

| Aug 7, 2014 | Long-Term Care Planning |

Planning for one’s death or physical limitations and health problems is not generally regarded as a pleasant experience by most people. However, long term planning is critical for aging Michigans who want to ensure that their wishes are followed with regard to their medical care and end-of-life plans. In addition, long-term care planning is important to ensure that rising medical expenses and potential nursing home expenses do not unduly burden relatives and caregivers.

Currently, most elderly people in need of care rely on relatives. In fact, 70% of care services are provided informally by family members. A new study conducted by the AARP, however, reveals that these numbers are expected to change dramatically. In 2010, the ratio of relatives who could serve as caregivers to an elderly person was 7 to 1. In 2030, the ration is expected to decrease to 4 to 1, with an even further decrease to 3 to 1 in 2050. This means that in the future, more elderly persons will have to rely on other sources of care, such as nursing homes and long-term care facilities, than relatives. The financial implications of this change are extreme, since the cost of a semi-private nursing home in the United States averages about $85,000 per year.

There are many aspects of long term planning that Michigan residents should consider, including creating a power of attorney in case of physical or mental incapacitation and planning financially for ways to cover the costs of medical expenses and care provided by non-relatives. There are often two primary concerns for those involved in long-term planning. One involves quality of life and medical care. By making key decisions in advance, a person can dictate who is authorized to make important decisions for them, as well as specify what kinds of care they do and do not want to receive. Planning can often enable a person to have the most independent living situation possible for the greatest period of time.

The other consideration relates to financial issues and the passing of wealth. Aging spouses may need guidance on how to qualify for and navigate Medicaid while still preserving certain assets. Long-term planning can also enable people to establish trusts and pass wealth to relatives and beneficiaries before the costs associated with aging depletes an estate.

Source: Forbes, “Changing Family Caregiver Dynamics Ramp Up the Importance of Long-Term Care Planning,” Jamie Hopkins, July 28, 2014