Long-Term Care Planning -- Policies and Papers

When contemplating the creation of a long-term care plan, you need to consider more than where and how you or a loved one may wish to receive care. You will need to determine the parameters of what that care would cost and decide how the care will be funded. Your own money or insurance, or a combination of both, are the most likely options.

You will also want to speak with an estate-planning or elder-law attorney about the proper legal documents you should have on hand should you or a loved one become incapacitated or incompetent. Powers of attorney, living wills, health-care proxies, and similar documents will help make difficult decisions easier in the future, not to mention head off arguments among family members and mitigate confusion for medical staff.

The following list comes courtesy of the National Institute on Aging:

Will: Identifies how a person's assets will be divided and distributed upon death and may identify guardians for minors and trusts along with detail burial wishes.

Living will: Identifies a person's wishes about medical treatment toward the end of his or her life.

Durable power of attorney for health care: Allows the person appointed (aka the agent or proxy) to make decisions for another because of conditions such as dementia. These decisions can include continuation of life support, removal from a hospital, and organ donation.

Do-not-resuscitate (DNR) order: Tells medical staff not to initiate CPR or other lifesaving measures if a patient's or breathing stops.

Durable power of attorney for finances: Empowers someone to make money decisions on behalf of another.

Beneficiary designations: These determine who receives the assets of one's individual retirement accounts, life insurance policies, and workplace retirement plans such as 401(k)s.

Lack of one or any of these documents can often increase stress for a caregiver. For example, dying without a will (aka intestate) leaves decisions about distribution of assets up to a state's laws. Without a health-care power of attorney or living will in place, family members must determine or speculate -- potentially engendering terrible infighting -- about what the a person wanted.

About the Author:

Bill Borton is Managing Principal of W.R. Borton & Associates, a specialist in asset protection strategies and extended-care solutions for high net-worth clients. Bill's firm develops individually tailored solutions in coordination with each client's financial, tax and estate planning advisors to transfer this long-term care risk using a wide range of available insurance products. Bill can be contacted by phone at 856.817.6100, by email at info@wrborton.com or through the online form on his website.