When long-term care comes into play, your family’s financial situation can suffer. Whether it’s a parent needing care in their home or your spouse entering an assisted living facility. You’ll likely be using funds that were saved up for other reasons. Perhaps to repair your home, pay for your kids, etc.
This is where things can get out of hand when someone doesn’t have legal standing to step in, or you give away your assets too early.
Here are a few things you can do to secure your money and your loved ones.
Know Your Expected Costs
First, consider the type of care you will need.
As stated above, long-term care can take many forms. It can include help with daily activities such as bathing, feeding, and taking medicine at home. It can also include adult day care or full-time assistance at a facility. Options vary widely in cost.
CareScout states that the 2025 national median cost of a private room in a nursing home is $129,575/year. This is the national median, not a local care quote, but it gives families a starting point for budgeting. Even staying for a couple of months can throw your budget off.
You should also know that Medicare will not cover most long-term care situations. Medicare generally does not cover ongoing custodial long-term care. It may cover qualifying, time-limited skilled care and other covered medical services.
Review what income, assets, insurance, and family you can rely on.
Grant Power of Attorney Early
Say you have a parent who can no longer comprehend what bills are due and need to be paid. As an adult child, you may know what needs to be paid but cannot access that account.
This can lead to a lot of red tape.
By giving someone power of attorney, you can allow them to take care of certain aspects of your finances. Depending on what the power of attorney allows and state law, they can manage specific financial decisions for you. Giving someone medical power of attorney allows that individual to make medical decisions on your behalf if you are unable to.
For South Carolina families, a Summerville Estate Planning Attorney can help connect wills, trusts, and powers of attorney. A coordinated plan makes it easier for relatives to know who can act during a crisis.
When selecting individuals to hold these positions, ensure they can keep track of small details, think on their feet, and communicate what decisions they are making. Always have backups; maybe one individual lives closer to take your parent to doctor’s appointments, and another is more financially savvy.
Always let your family know what you want; they can’t do what you want if they don’t know.
Think About Your Children
When most people think about long-term care, they think about their elderly family members. However, you should also think about what will happen if you have children.
If a disease took your income away from your family, what will happen to your child(ren)?
Naming guardians for children in an estate plan records whom a parent would prefer to care for the children after death. If a parent is alive but unable to provide care, different legal arrangements may be needed. If the child still has a parent, just not capable of caring for them, other measures may need to be taken.
A South Carolina parent may record a preferred caregiver in estate planning documents, but a will does not itself grant custody. The appropriate court may have to decide who should care for the child, especially when another parent is living.
Keep in mind that a judge can still decide what is best for the child, especially if they have a living parent. You should select someone who can take care of your child’s needs and has the means to do so.
Some things to consider when picking a guardian for your children are:
- Will they want to be the guardian?
- Can your child continue to live near school, family, and friends?
- Who will manage any assets left for your children?
- If your first choice is not available, is there a second option?
Your children’s guardian doesn’t have to manage their assets; you can choose separate individuals.
Use Wills and Trusts to Your Advantage
Your will can help dictate who you want to receive your property when you die. You can also include things you want to make sure happen for your family. With a trust, you can decide how assets you leave behind will be distributed and used. Maybe you want someone to spend your children’s money on college and other necessities until they are older.
Just remember, “protecting” your assets can mean many things.
You can establish a revocable living trust to help protect your family’s assets, but know that these assets can still be counted when determining your Medicaid eligibility. There are irrevocable trusts that may offer more benefits, but will require you to speak with an attorney.
Also, know that transferring your house or other assets to a family member may not always work in your favor. Tax consequences, control over assets, and more. Don’t just give away your home thinking it will be safe from long-term care bills.
Always ask yourself what you want to accomplish with this document, and what will happen if you need long-term care before you pass.
Learn About Medicaid
If your family is expecting to face large medical bills, Medicaid may come into play. You must meet certain criteria to qualify for long-term care services, and it may not cover everything you think.
You can give away your assets. When someone seeks certain Medicaid long-term care benefits, the program generally reviews transfers made in the previous five years. A transfer for less than fair market value can trigger a separate penalty period, calculated from the transfer amount under program rules. Medicaid will not pay for that portion of long-term care services while you are being penalized.
There are some circumstances that Medicaid will allow you to give away assets, but this is where it’s best to consult with an attorney.
After a Medicaid recipient’s death, South Carolina may seek repayment from the estate for certain covered costs. Federal and state rules restrict the circumstances and timing of recovery and provide protections for some survivors and hardship cases.
It doesn’t mean the state will take your house, but it’s good to know the laws before you tell your family members you are leaving them your house.
Learning the rules early can help you decide whether any transfers make sense and what assets you need to keep for your own care and living expenses.
Have a Solid Plan in Place
Once you have your documents in place, make sure you have everything organized and accessible.
Make a list of all of your accounts, property, insurance, debts, and monthly expenses. Make sure someone knows where these documents are located and how to access them.
Know who your beneficiaries are on your life insurance and retirement accounts. These will determine where your money goes, just like a will, but may not align with what you want to happen.
Discuss what kind of budget your family can expect to pay for long-term care. Do you expect to use your savings, do you have a long-term care policy, or will your family be helping you out? There are many things to consider; know your options and research prices in your area.
Once you have a plan, always make sure you revisit it when your family changes. New children, marriage, deaths, moves, and health conditions can change who you want to represent you or take care of your children.
Your family members don’t have to be on the same page, but know who they can turn to and where to find information.
Final Thoughts
Knowing how to protect your family’s money isn’t going to stop you from paying for long-term care, but it will allow you to prepare for it and help your children out.
Always start with who you want to make decisions for you, then look at your money, documents, and long-term care options.
