The most important component of a long-term care plan—believe it or not—is a power of attorney. The creation of all long-term care plans, in fact, should start first with the power of attorney as that is what gives you the authority to create all of the other documents that you may need (except, in some cases, such as a living will or the last will and testament). In addition to deciding who will make decisions for you once you need care and are unable to make decisions for yourself, the power of attorney can be used to avoid guardianships, create a trust, and execute healthcare directives. It’s the essential ticket to making decisions, taking care of the proper things based on need, and filling in the gaps between whatever hasn’t been planned yet.
After a power of attorney, you want to look into trusts and specific kinds of life estate deeds or beneficiary deeds depending on the individual situation. More importantly, you need to have a long-term care plan or insurance option, if possible, because nobody wants a Medicaid plan for long-term care. As a Medicaid lawyer, I can tell you there are so many hoops that the system makes you jump through, and Medicaid is primarily available, from a practical standpoint, only for a nursing home. If you don’t plan, the government has a plan for you, and it’s called nursing home care. Most people don’t want to go to a nursing home, so what I tell people on the front-end is you need to have a plan to stay out of a nursing home, a plan that includes asset protection and how to provide income when you need care so you don’t go broke and then end up in a nursing home on Medicaid anyway.
In conclusion, the most important components are preplanning with the power of attorney and some sort of plan for long-term care. Like I tell my clients, regardless of what kind of estate plan you have, if you don’t have a plan for long-term care, it’s going to blow up your estate plan, no matter how robust it is. The cornerstone of every plan should be long-term care planning; then, you build the estate plan on top of that. It’s like building a house on a rock, instead of sand, so when the winds of turbulence come, the house will stand and not be blown off its foundation.
What Kind of Crisis Plans Should We Have in Place Should We or Someone We Love Become Incapacitated Suddenly?
The only situation that calls for a crisis plan is one where you didn’t have a prior plan in place whatsoever. If you have any kind of plan in place before you become incapacitated, I consider that preplanning. Having some kind of plan won’t entirely avoid a crisis, but it at least gives us an idea of what we’re going to do when we get there and steers us in a direction of minimizing the negative consequences, should you need care. We never want to be in a situation where there’s a crisis of belief or a crisis of circumstances, meaning we’re left not knowing what to do.
Again, the first thing you need in place is a power of attorney. Once you have that, if you become suddenly incapacitated, you’re not out in left field without some document, some plan, to chart a course of action. Everybody needs a power of attorney. I also like to see people have a plan to protect assets if they don’t have some form of long-term care insurance. It’s important, in the event of your incapacity, to preserve your assets and to create income for your care.
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