The expense of catastrophic illness and long-term nursing home care ranks as one of the major concerns of aging Americans and their families. Most thoughtful people, upon reflection, would prefer not to have health care costs deplete their life savings, effectively disinheriting family members.
What can a person do? It's important to make your plans as early as possible. Long-term care insurance is a practical approach. Policies today cover a wide range of options, from home care and assisted living facilities up to the higher levels of care provided by nursing homes. Insurance costs depend on many factors, especially the age when you purchase the policy. Benefits commonly continue for three years, with increases for inflation built in, and would begin after a 90- or 100-day “elimination period.”
You should carefully investigate the companies and policies before buying. Insurance premiums will vary state to state, as will the costs of care. The most important step you can take is to see an insurance broker who works with a number of companies and can help you sort through the options and costs.
Note: Recent tax law changes encourage the purchase of long-term health insurance by making premiums deductible as medical expenses up to certain maximum amounts, based on a person’s age. Deductions are indexed annually for inflation.
Check with Charities When Making Estate Gifts
Many gift officers report that three out of four charitable bequests arrive without prior announcement from donors or their advisers. For the most part, no problems occur, but sometimes “surprise” bequests are ineffective because donors did not have an organization’s correct legal name, or restricted the gift to purposes that could not be carried out.
Here are some famous (or infamous) examples: A donor made a will that left a significant bequest “to the University of Southern California, also known as UCLA” (the man had ties to both schools, which eventually divided the gift); A resident of a retirement community left funds to the local hospital, restricted to the purpose of establishing a birthing facility (most residents of the area were long past child-bearing age).
Donors who wish to benefit the local chapter of a national organization through their estate plans should inquire whether they need a special will provision to keep their funds “local.”
We encourage friends to inform our office if they have made, or are planning to make, gifts through their estate plans. We will be pleased to work with you and your advisers to arrange an estate gift that is purposeful, practical and personally satisfying.
Copyright © 2010 by R&R Newkirk. All rights reserved.
Please note: Case studies are fictional and do not reflect DJCF donors, situations or opinions.