Monthly Archives: May 2013

Should You Buy Long Term Care Insurance?


Even though I practice “elder law”, not all of my clients are elderly… yet.  In counseling younger clients, I am often asked about long-term care insurance (LTCI) and its benefits and down sides.  While some consider the cost of LTCI premiums high, the cost of care is astronomical in comparison, making LTCI a hot topic.

When I began my career, I had the same questions as my clients.  Who should buy LTCI?  Is there an amount of wealth at which we can deem LTCI totally unnecessary or at least superfluous? If so, is that at $2 million? $10 million? I have been asking every insurance advisor I meet ever since.

My favorite answer so far – in terms of how wealthy one must be to make LTCI a ‘bad’ purchase – was that it depends on the client. (Let’s be honest – I’m a lawyer. I always think that “it depends” is the best answer!).

Here was the example: an individual with $2 million in assets may be able to generate enough investment income, along with his Social Security Retirement Benefits and pension/IRA/401K distributions, to pay the $3,500+ per month that Assisted Living or Nursing Care might cost without ever having to touch principal.  Of course, an individual with $10 million could do the same.  But as one advisor pointed out, the guy with $10 million could also buy a new home if his burned to the ground, but he still has homeowners insurance. And Warren Buffet apparently has long-term care insurance.  This is presumably because Mr. Buffet, along with the wealthy homeowner,  made an economic decision that he would rather pay insurance premiums now (risking he’ll never need to use the benefit) than risk having to pay the cost of a disaster (whether that be a home burnt down, or years of nursing home care at $80,000+ per year).

For some, LTCI may be necessary to preserve their estate. For others, estate preservation may not be important.  In addition, government programs such as Medicaid and Veterans Administration benefits are available as back ups for those that need financial assistance for long-term care and have [mostly] run out of funds.

For the wealthier folks, the decision whether or not to buy LTCI is more about risk management, taking into account variables such as the risk of long-term care and the cost if one actually needs it, versus the cost of LTCI premiums.  Of course, this is how Warren must have thought of it.

As for me? Although I definitely could not fund my potential long term care costs with any $10 million estate, I am probably not eligible for LTCI because I have insulin dependent diabetes.  Which brings up another important point – if you ARE in the market and are healthy, it may be a good idea to start shopping while premiums are lower and before potential health issues arise.

If you need any more guidance on this topic, feel free to contact me as I would be happy to point you in the right direction!

Image © gunnar3000 –


Estate Planning for Digital Assets


What happens to your facebook page if you die? Who has access to your LinkedIn account? How is online bill-pay affected, and how can your loved ones get into your email account (or would you want them to)?  Did you know that your airline miles can be transferred at death?

Colleague Eric Burkard, an insurance advisor Certified in Long Term Care, sent me this article yesterday: Protect Digital Assets After Your Death. Eric noted that most planners probably don’t touch these issues.  Not surprisingly, and as the article points out,  the law still lags behind such modern questions.

So what can you do?

First, you can consider making an inventory of your accounts, usernames, passwords and secret questions.  Digital inventories with a master username/password may be best, as they can be easily updated when log-in information changes. Of course, you must also be careful that the master list is secure, and that your loved ones will have access.

Bank accounts are generally frozen when the bank becomes aware of the owner’s death.  As this will affect automatic online bill-pay settings,  it is crucial that loved ones have access to utility, cell phone, and other regular ‘creditor accounts’, especially if you do not receive paper bills.

If you are concerned about social media access, you can research your social media account user agreements which may include after-death policies. For example, facebook pages can be memorialized. Strong feelings about the matter? Let your loved ones know.

The bottom line?  Estate planning is not just about signing legal documents.  It is about planning for the future to lessen the practical burdens your loved ones might someday face.

CAVEAT:  This web site and the information contained herein have been prepared for educational purposes only.  The information on this blog does not constitute legal advice, which would be dependent upon the specific circumstances of a particular case.  In addition, because the law can vary from state to state some information on this site may not be applicable to you.

Image © maxkabakov –