Coming Up in October at AZREIA, we have two unrelated but relevant events. October’s AZREIA Meeting focuses on what investing means, how you manage expectations, navigating the already heightened arena of investing with your spouse or family members — followed by an unprecedented educational opportunity in our two day event, “Building it, Protecting it, Winding down, & Paying It Forward”:  The Lifecycle of Real Estate Entrepreneurs.

As we approach Halloween, it is not our intention to be morbid, but as the saying goes, the only thing we’re guaranteed is death and taxes. So, our question to you is, are you prepared to for both? For some of you, you may be flying solo with your spouse’s blessing. While, like our guests for October’s Monthly Meeting, Maria and Gary Giordano, some of you are in the trenches together. No matter which scenario you find yourself, we beg of you to have a difficult conversation on post-life planning before life decides to force the conversation on you. Because the sooner you have the conversation, the more prepared you’ll be to answer the other side of the conversation, taxes and asset preservations.

Looking at our event coming up at the end of October, we focus in on the areas of a real estate entrepreneurs life cycle. Many of us know the basics of setting up business entities and asset protection, but for many others, we see this as a way to a protect our real estate from what has become a very litigious society. Unfortunately, you are more likely to encounter end of life expenses that could be a complete drain on what you have worked so hard all your life to either pass on as generational wealth or perhaps to charity. The following is a partial list of reasons why waiting could be incredibly detrimental to you, to your spouse, to your estate, and to the next generation:

9 Reasons Not to Delay Long-Term Care Planning

1.) In America, a senior citizen (65+) has about a 70% chance of needing some type of Long-Term Care support later in life. Considering the realities of life, being prepared for the unforeseen simply makes good practical and financial sense.

2.) Nursing Home costs are on the rise. The average length of a nursing home stay is more than two years, and in Phoenix Arizona, the annual cost of nursing home care during 2017 was between $78,000 to $100,000 per year. Double those amounts if both you and your spouse require LTC.

3.) Most private insurance policies don’t pay for Long-Term Care. If you’re depending on your health insurance to pick up the costs of long-term care, think again. It’s just not a part of the package, which means you’ll need to find another way to pay, should you need LTC.

4.) Long-Term Care Insurance: you may not qualify. Purchase your LTC insurance policy when you’re younger and healthy, and Long-Term Care Insurance will cost less. Wait until you’re older, or until you’ve got a health condition, and it may be too late, because you may no longer qualify. When it comes to LongTerm Care Health Insurance, the earlier the better.

5.) The surviving, healthy spouse may pay the price for delay. If you haven’t planned and either you or your spouse end up in a nursing home for a number of years, your estate could be drained. And as a result of LTC expenses, the surviving, healthy spouse’s quality of life could be deeply impacted.

6.) Your children’s inheritance could be spent on your LTC. Even if you do manage to pay for those Long-Term Care costs out-of-pocket, without strategic planning, it’s possible the inheritance you intended to pass on to your children could be spent on your LTC expenses.

7.) Medicare won’t pay for more than 100 days of skilled nursing care (and that’s if you qualify). If you’re eligible, those 100 days must be medically ordered and follow a 3-day stay in the hospital. After that, you’ll need to pick up the tab, another reason to plan ahead in case you or your spouse ever need a more extended stay.

8.) Waiting too long to transfer assets to your children could disqualify you for Medicaid. If you’re banking on Medicaid as the financial solution to pay for LTC, and you want to protect your financial assets by transferring them to your children, you’d better plan ahead. Medicaid has a “Look-Back” policy that gives them the right to refuse coverage if you’ve made certain financial transfers within five years of your request for Medicaid.

9.) Custodial Care isn’t covered by Medicare. Medicare won’t cover custodial care, which is not medical in nature, but provides help for those who cannot care for basic needs like bathing, dressing, or feeding themselves. Unless you’ve planned ahead, ongoing custodial care could deplete your financial assets and create undue financial pressure.

By Troy Miller, Associate Executive Director AZREIA