Back when I was young, there was not much talk about Long Term Care planning. Life expectancy was shorter than today, and it was assumed my parents would be taking care of their parents like generations past. Today it is different, and many Baby Boomers, Gen Xs & Gen Ys are facing what is now being called the ‘Sandwich Generation.’ These generations are finding themselves not only taking care of their families, but also their aging parents and other family members, especially as life expectancy has increased and couples have delayed starting their own families.
Facing cognitive decline in parents or other family members can be a very sobering and exhausting experience. One of my coworkers was confronted with this very challenge—her mother was experiencing cognitive decline and was no longer able to take care of herself. She needed fulltime assistance and the family started to look for assisted living facilities. It became clear how expensive this was going to be! Her mother did not have a LTC policy in place, so I had to watch as her family sold off her mother’s assets, including her home, to pay for her care. This kind of financial and emotional stress may be reduced by having a LTC plan in place. Many private plans today allow for care in one’s own home—even given by family members—and offer death benefits to beneficiaries if the policy is not used, so money isn’t “thrown away” on something that was eventually not needed.
Recently, Washington State has enacted the nation's first state-operated long term care insurance program, the Washington State Long Term Care Trust Act, which takes effect January of 2022. The Trust will be funded by a mandatory payroll tax of 0.58% of individual W2 income.
There is a small window to opt out of the state plan by purchasing your own Long Term Care policy before October 1, 2021. We recommend that you understand the pros and cons of the state plan versus a private plan. Please contact us so we can review with you how the legislation may affect your plan, including considerations of any group LTC insurance offerings you may be eligible for through your employer.
For those not in Washington State, we can help with your LTC planning needs as well. We evaluate and solve for insurance needs, including Long Term Care considerations, as part of our comprehensive Wealth Plan process.
Let us help you evaluate what is best for you and your family.
Heather was named a Forbes Top Wealth Advisor and Working Mother’s Top Wealth Advisor in 2020 & 2021. She is the principal advisor on the multi-generational Krause & Thorpe Wealth Management Team, helping busy families build and preserve wealth.