Ask the Expert: Can I really save $11,000 annually if my planning is done earlier?

Q. Recently, my family had a reunion. Since I have six brothers and sisters, it was a huge event that included many relatives that I hadn’t seen in years. At dinner, my distant cousin Marty who is a few years older than me and whose wife Danielle recently had a stroke at the young age of 49, went on and on about how meeting with a Certified Elder Law Attorney and planning in advance when he was 45 saved his family a lot of money and stress.
I have been putting off my own planning for a while now. I am only 50 years old myself, and in good health. I am still not convinced that I want to spend the money to plan now and don’t like to broach these types of topics with my wife and immediate family. Can you tell me how, in your opinion, does incapacity planning and long-term care planning actually save you money, like my cousin said, and why I should start now, rather than when I may actually need it?

A. Planning for long-term care and/or incapacity planning are things that many people do not want to think about. Most families believe they can solve a crisis themselves when it arises or that a family member will bear the load of caring for an aging or incapacitated relative. This thinking may work for the short term, but over a longer period of time, families will start to feel the financial burden, in addition to the stress and guilt affecting the care receiver, caretaker and the entire family.

When it comes to planning in advance, your brother is right. A recent study shows that families who anticipate their needs, can save close to $11,000 a year in out of pocket expenses by planning in advance instead of waiting until a crisis.

The study, Beyond Dollars: A Way Forward, commissioned by the insurance company Genworth Financial, surveyed 1,208 people ages 25+ who either were recipients of long-term care or had a family member that was a recipient of care greater than 30 days during the previous 12-month period.
Findings from the study included:

  • 35% of care recipients believe that they could have avoided much of their stress if they had planned sooner.
  • 53% of primary family caregivers have lost income because they had to provide care.
  • 40% of those attending a day care facility had thought of how they were going to cover the issue of long-term care vs. just 23% of those who had moved into a family member’s home
  • 51% of respondents regretted not having made plans for long-term care needs; 38% of care recipients didn’t want to admit the need for help; 28% didn’t want to discuss it; and 23% had no idea where to start the search.
  • Those who sought care from professionals planned ahead for that need more often than people depending on family.

The cost of waiting is high. Caregivers surveyed whose loved ones did not plan ahead faced additional stresses including covering the cost of daily living, medical and other support-type needs. These costs added up due to out-of-pocket expenses, and if the loved ones would’ve started planning earlier, they could’ve saved nearly $11,000 each year (for those who do not require nursing home care or assisted living). Nursing home patients who pay out of pocket in Northern Virginia pay $9,000-12,000 a month; assisted living costs $4,000-6,000.

The Beyond Dollars study demonstrates the impact an unexpected health-related event can have on family members, relationships and savings, and the study reinforces the importance of planning early. What makes the study findings so effective is that you can learn lessons from those who actually waited too long or did not plan for incapacity or long term care who were hit with the hefty bills and emotional toll, before you make the same mistakes yourself. More than half of those people wish that they had taken the steps to prepare sooner.

As you can see, the consequences of not having a plan are life-changing and the most important first step is having the conversation. As you mentioned, talking to your loved ones about big issues like aging, money, health and end-of-life care can be awkward. Having honest conversations now lets your family know what you want, and can help ensure that you live life on your terms and as fully as possible. Genworth, the company who administered the survey cited above, also developed comprehensive tools and resources to help with these types of conversations.

Based on the Genworth research, advance planning shouldn’t start when you are elderly or when a crisis occurs– it is something that should start when you first become an adult and continue throughout your lifetime. Your life goes through incredible changes each decade; therefore, you should look at Elder Law and Estate Planning as gradual processes, rather than a one-time event. If you haven’t done so already, now is the time to begin your process. Learn more at The Fairfax and Fredericksburg Elder Law Firm of Evan H. Farr, P.C. website, or call us at our Virginia Elder Law Fairfax office at 703-691-1888 or at our Virginia Elder Law Fredericksburg office at 540-479-1435 to make an appointment for a consultation.

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About Evan H Farr, CELA, CAP

Evan H. Farr is a 4-time Best-Selling author in the field of Elder Law and Estate Planning. In addition to being one of approximately 500 Certified Elder Law Attorneys in the Country, Evan is one of approximately 100 members of the Council of Advanced Practitioners of the National Academy of Elder Law Attorneys and is a Charter Member of the Academy of Special Needs Planners.