Christmas is a common time to get engaged. A ring doubles as both a wedding proposal and solves the what to give her for Christmas question. Then you can dream in front of the fire this winter, planning a spring wedding.
Financial planners will offer many pieces of advice to new engaged couples, but typically not this piece of advice:
Once you are married, you are one – financially. If you have more assets and your spouse suffers a stroke dancing at the reception (yes it happens, not all newly engaged couples are in their 20’s) you will spend your nest egg paying for the other’s long term care (LTC).
Even many attorneys are not aware of the fact that a prenuptial agreement is not honored by Medicaid, the welfare program that will pay for LTC once you are impoverished. I was called in on a case where an older gentleman, who owned a very valuable farm that his son was farming, married a sweet gal his age. The attorney told him the prenuptial agreement would protect him. When his wife needed LTC, he found out that was not true, and now must sell the farm out from under his son to pay for her care.
While I do have several options to help pay for care once the care has already started, the least expensive strategy is to own LTC insurance. Most people cannot handle a bill of over $100,000 that comes every year. If your funds to pay this come from an IRA, the IRS will be involved as well.
LTC insurance is available up through age 84. I have had many a mature couple in my office to purchase a LTC insurance policy on the one who does not have it yet. When the cost ends up being substantial, the one with the wealth typically says that this must be obtained before the marriage license or all the life’s savings could be spent paying for care and the risk is too great to ignore.
The ideal time to address this is when you are still healthy enough to get LTC insurance. Every year it gets tougher as medical issues that were acceptable years ago, are not anymore. Diabetes leads to an increased risk of Alzheimer’s. Bone density loss leads to loss of mobility when the doctors cannot repair the broken hip. Any use of steroid drugs can cause a decline. This is not like the affordable care act where anyone can get the insurance. By 60, a fourth of us can no longer purchase it. On the other hand, cholesterol medication or blood pressure that is controlled is not a concern.
So, if you are in your 40’s or 50’s and healthy, this is the time to investigate. Do it now as a Christmas present for your children. They won’t have to make room for you to move in with them when your health changes. They won’t have to retire early or go part time to care for you. With care provided, they can come visit, versus bathe and dress you. For more information visit www.TheLongTermCareGuy.com