Long-Term Care Planning

Preparing for Care Needs With Clarity, Flexibility, and Peace of Mind

Long-term care planning has become an increasingly important part of the financial planning process as life expectancy continues to increase. While living longer is a positive development, it also means that many individuals become more frail in their later years and are more likely to experience a long-term care event.

Long-term care events are often very costly, emotionally taxing, and complex to manage—making advance planning essential. There is also significant variation among clients in terms of how and where they would want care provided, which directly impacts the planning solutions we recommend.

The Different Phases of Long-Term Care Needs

Long-term care needs often evolve gradually rather than all at once.

In the early stages:

• Individuals may only need assistance a few hours per day

• Care is often provided by home health aides

• Costs can be relatively manageable

As care needs increase:

• Assistance may be required daily or seven days per week

• Supervision, medical support, and safety concerns become more significant

• Families must evaluate more comprehensive solutions

At this stage, individuals typically weigh:

• Full-time in-home care

• Assisted living facilities

• Nursing homes

While most people prefer to remain in their homes, 24/7 private in-home care is one of the most expensive options, often exceeding what many families can sustainably afford.

Quality of Care vs. Cost of Care

One of the most common—and misunderstood—assumptions we see is the belief that:

“If I put my assets into a Medicaid trust, I’ll automatically qualify for Medicaid and get the care I want.”

In reality, this is often not the case.

If Medicaid is paying for care:

• The individual can only receive care at facilities with Medicaid beds available

• Options may be limited

• Quality of care may not align with personal preferences

• 24/7 private in-home care is not an option under Medicaid

This is why it is critical to determine what type of care a client would actually want, and then build a financial plan around that preference—rather than defaulting to a single solution.

The Three Primary Ways to Pay for Long-Term Care

From a planning standpoint, there are three main approaches to paying for long-term care:

1. Long-Term Care Insurance

Historically, long-term care insurance was the default solution. Over the last decade, this has changed dramatically.

Challenges include:

• Significant premium increases

• Insurers underestimating longevity and care costs

• Policyholders paying for underwriting mistakes

• Many carriers exiting the market entirely

In New York, for example, only one insurance carrier is currently issuing new long-term care policies—resulting in limited competition and high costs.

2. Self-Insuring

Because of rising insurance costs, many individuals now choose to self-insure.

This approach involves:

• Setting aside a dedicated pool of assets early in retirement

• Treating those assets as a long-term care “reserve”

• Allowing those assets to grow over time

• Excluding them from normal spending and return projections

If care is needed, there is a clear plan for which assets will be used.
If care is never needed, the assets pass to heirs.

Self-insurance requires careful modeling to determine:

• How much to set aside

• How to fund care for one spouse vs. two

• How to invest the long-term care self-insurance account

3. Medicaid Planning Through Irrevocable Trusts

For individuals who do not have sufficient assets to privately pay for care, Medicaid planning can be appropriate.

This typically involves:

• Transferring non-retirement assets (real estate, brokerage accounts, savings) into an irrevocable trust

• Assets no longer being considered owned by the individual

• Avoiding the Medicaid spend-down process

• Preserving assets for a spouse or heirs

However:

• States like New York impose a five-year look-back period

• Transfers within that period can result in penalties

• Advanced planning is required well before care is needed

This solution can be effective—but only when implemented thoughtfully and early.

Understanding Medicaid Rules Is Critical

Long-term care planning also requires a detailed understanding of Medicaid rules, including:

• Countable vs. non-countable assets

• Income that must be committed to care (pensions, Social Security, RMDs)

• Assets that may be exempt

• How trusts, gifting, and other strategies interact with eligibility

There are often multiple planning paths beyond just using a trust, each with different tax and financial implications.

The Family Impact of Not Having a Plan

Without a long-term care plan:

• Care decisions often happen during a crisis

• Adult children are forced to step in unexpectedly

• Options become limited

• Assets may be spent down unnecessarily

• Emotional and financial stress increases significantly

Having a plan is not just about money—it is about reducing the burden on family members and ensuring care decisions reflect your wishes.

Our Approach to Long-Term Care Planning

At Greenbush Financial Group, we help clients:

• Clarify their care preferences

• Evaluate insurance, self-insurance, and Medicaid strategies

• Model long-term care costs into retirement projections

• Coordinate with estate and elder law attorneys

• Understand tax and Medicaid implications

• Create flexible plans that evolve over time

Advanced planning is the key to preserving both financial security and family peace of mind.

Contact Us . . . .

All of our services start with a complimentary consult. No high pressure sales tactics. We are financial planners, not salesmen.

About Our Firm:  Greenbush Financial Group is an independent registered investment advisory firm based in Albany, New York, that provides four main services to clients: fee-based financial planning services, investment management, employer-sponsored retirement plans, and retirement planning services.  The firm serves clients locally in the Albany region and virtually across the United States.

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