If you have aging parents who aren’t as financially well off as you are, one of your estate planning goals may be to help fund their long-term care (LTC) and associated medical expenses. The annual cost of LTC — which may include assisted living facilities, nursing homes or home health care — can reach well into six figures. These expenses aren’t covered by traditional health insurance policies or Social Security, and Medicare provides little, if any, assistance.
Whether your parents face LTC expenses now or in the future, several estate planning strategies exist to help prevent these expenses from devouring their resources:
Plan for LTC. Work with your parents before the need for LTC arises to develop a plan for funding these expenses through LTC insurance or other investments.
Pay medical expenses. You can pay an unlimited amount of medical expenses on your parents’ behalf, without gift tax consequences, if you make the payments directly to medical providers.
Assemble advisors. Work with your accountant as well as an elder law attorney to discuss strategic planning around your parents’ assets, particularly their homes.
Should you wish to discuss your family’s situation, please contact me at SDitman@berdonllp.com or your Berdon advisor.
Scott T. Ditman, a tax partner and Chair, Personal Wealth Services at Berdon LLP, New York Accountants, advises high net worth individuals and family/owner-managed business clients on building, preserving, and transferring wealth, estate and income tax issues, and succession and financial planning.