April 2010 An Interesting Long-Term Care Trend: Baby Boomers Insuring Their ParentsFinancial advisors have long touted to clients the benefits of buying long-term care insurance. While the recession has possibly motivated clients to consider those benefits more closely than ever, they aren't new. What is new is an emerging trend, in which people are buying long-term care insurance for … their parents. Keeping Parents Out of Poverty. According to a recent article at OnWallStreet.com, many financial advisors are fielding a growing number of inquiries from middle-aged clients about buying long-term care insurance for their less-well-off parents. In many cases, their motivation is to protect not only their parents' estate but their own future as well. Many have just had a relative go through being in a nursing home, and they see the devastation and the stress it causes. They're concerned their parents don't have a lot of means, and thus want to buy insurance. Sometimes several siblings will split the cost, though the burden of care typically falls on only one sibling. What If Insurance Isn't an Option? Perhaps an adult child’s intentions are good but they simply aren’t able to afford long-term care insurance for a parent. Or, perhaps the parent is already incapacitated and it's too late to buy insurance. If that's the case, they could be eligible for Medicaid and, in some cases, asset protection strategies. Key planning factors include what nature and value of assets the parents own, what their sources of income are, and whether they are likely to become incapacitated. Years ago the objection many seniors had to buying long-term care insurance was either, "I won't need it," or "My kids will take care of me." Remember how The Waltons showed us three generations of a family living together? The grandparents helped quite a bit. Their kindness was returned when they became incapacitated and their children became caregivers. In that idyllic scenario, that's just how it was. But today's families rarely reach that ideal. Children who nursed their elderly parents are saying, "I don't ever want to put this kind of burden on my kids." That's why, in advising our estate planning clients, we are devoting an increasing amount of time to discussions of buying long-term care insurance for parents or exploring how to help Mom and Dad receive Medicaid benefits.
Adapted from the Daily Plan-It newsletter Hoopes, Adams & Alexander, PLC, is a Chandler, Arizona, law firm offering services to Phoenix-area clients in the areas of estate planning, entity formation, commercial and real estate transactions, and civil litigation. | 
