For many retirees, estate planning lives in the “someday” category: distributing assets, minimizing taxes, and leaving a legacy. Long-term care, meanwhile, feels like a different topic entirely: one about health, aging, and uncertainty.
In reality, it’s all the same conversation. Estate planning isn’t just about what happens after you’re gone. It’s also about protecting your resources while you’re still here to enjoy them. How you prepare for potential long-term care needs can dramatically shape what ultimately gets passed on to your loved ones, and how smoothly your wishes are carried out.
Long-term care is one of the biggest risks to your estate.
Healthcare expenses in retirement continue to climb, and extended care, whether at home, in assisted living, or in a skilled nursing facility, can become one of the largest financial risks retirees face. Without a plan, these costs are typically paid from investment accounts, retirement savings, or the sale of real estate or other assets. That can significantly reduce the size of your estate, upend inheritance plans, and force difficult decisions at an already emotional time.
How you fund care shapes what you leave behind.
The way you pay for care directly affects your estate outcomes, and there’s no one-size-fits-all answer:
- Long-term care insurance can help protect your investment and legacy assets, though traditional standalone policies have become increasingly expensive and harder to qualify for. Hybrid policies (which combine life insurance and annuities with long-term care benefits) are a popular alternative, offering more flexibility and a benefit even if care is never needed.
- Self-funding from assets preserves flexibility and control, but reduces what passes to your heirs. This approach works best when it’s deliberate and built into a broader financial plan (not as a last resort).
- Relying on family without a clear plan can create stress, confusion, or unintended inequities among your loved ones. Good intentions don’t replace good planning.
The key is making these choices intentionally, not reactively during or after a health event.
Powers of Attorney are critical.
A well-crafted Power of Attorney is often the most critical estate document during a long-term care situation. It empowers your chosen agent to manage finances, coordinate care expenses, and communicate with insurance providers and financial institutions on your behalf. Without proper powers in place, families may need court involvement to act on your behalf, a process that adds time, cost, and complexity during an already stressful period.
Keep in mind that Powers of Attorney aren’t all the same. Make sure yours is durable (meaning it remains valid if you become incapacitated) and that it grants sufficiently broad authority to handle financial and healthcare matters. Review it regularly to confirm it still reflects your wishes and today’s financial landscape.
Trusts can help with control and continuity.
Trusts aren’t necessary in every situation, but in the right circumstances, they can be invaluable. Certain trust structures can:
- Manage assets during periods of incapacity without court intervention;
- Provide continuity of management if you’re unable to act;
- Ensure assets are used according to your intentions (not someone else’s interpretation); and
- Coordinate the distribution of assets more smoothly after a care event or death.
When designed properly and in coordination with your overall plan, trusts can create clarity and stability for the people making decisions on your behalf.
Planning reduces family stress later.
One of the most overlooked benefits of coordinated planning is what it does for your family’s peace of mind. When care preferences, funding sources, and decision-making authority are clearly documented, your loved ones are spared from the impossible task of guessing what you would have wanted. Financial choices feel less emotional and more practical. Family relationships are better protected during difficult moments, and the people you love can focus on being present with you, instead of scrambling to figure out logistics.
Review and revisit as life happens.
Health, family dynamics, and financial resources all evolve over time. Your long-term care and estate plans should evolve with them. Revisit your plan:
- After a health diagnosis or change in condition;
- Following a major life event (marriage, divorce, loss of a spouse, birth of a grandchild);
- As assets grow or are drawn down; or
- When care preferences change.
An annual or biannual review helps ensure your plan stays aligned with where you are today, not where you were five years ago.
Long-term care planning and estate planning aren’t separate silos. They are two sides of the same conversation. When thoughtfully coordinated, they can help protect your independence, your assets, and your legacy, while easing the burden on the people you care about most. If you’d like to review how your long-term care strategy fits within your broader financial plan, we’re happy to help coordinate that conversation, alongside your CPA and estate attorney.
Disclaimer: The information above is for general educational purposes only and should not be considered financial, tax, or legal advice. Always consult with a qualified professional regarding your specific situation. You should consult with your CPA and/or attorney before implementing any estate planning, gifting, or tax-related strategy.