Estate Planning

Protecting Your Estate from the Ravages of Long-Term Care

Protecting Your Estate from the Ravages of Long-Term Care
 

For most of us, the prospect of long-term care is one of those looming specters in the distance that we try our best to ever avoid contemplating. This can be especially true for the affluent who simply figure they will deal with the associated costs when and if the need arises. Yet even for wealthy families, an unexpected healthcare event requiring long-term care can quickly wipe out a sizable portion of assets that might otherwise be earmarked as a legacy for your heirs.

According to the U.S. Department of Health and Human Services, approximately 70% of Americans who are currently age 65 or older will need some type of long-term care (e.g., nursing home stays, home health care and/or time in an assisted-living facility)—costs that are not covered by Medicare.1

Rather than paying out-of-pocket, you may want to consider mitigating some of the long-term care risk for you and/or your spouse by purchasing an insurance policy that also offers long-term care benefits. Unlike traditional long-term care insurance where there’s a very real possibility that you could pay years of premiums without ever needing (and therefore losing) any benefits, many insurance policies offer optional long-term care riders to policyholders who are generally in good health.

There are two different types of policy riders commonly available: permanent life insurance with a long-term care benefits rider and hybrid life insurance with a long-term care benefits rider. With these types of policies, if you need long-term care coverage, it’s paid out of the policy’s death benefit according to a pre-determined payment schedule. Any unused portion of the policy death benefit is then transferred tax-efficiently to your heirs upon your death.

While the two options are fairly similar, permanent life with a long-term care rider may be preferable for those whose principal focus is on maximizing the death benefit paid to their heirs, with long-term care as a secondary consideration. Individuals who want greater flexibility in purchasing additional coverage and/or paying premiums, however, may want to consider a hybrid policy with long-term care benefits. 

Integrating long-term care into your wealth plan

An unplanned long-term care event can throw a wrench into otherwise carefully-crafted estate and wealth transfer plans—not only necessitating the liquidation of illiquid assets such as a family business, but often requiring the sale of investments that trigger adverse tax consequences.  That’s why, regardless of your preferred approach to funding long-term care expenses, it is essential to plan early.

Much like retirement planning, the sooner you begin, the more options and flexibility you have and the greater your likelihood of achieving a successful outcome. Your SunTrust advisor can assist you in estimating just how much you may need to cover out-of-pocket healthcare costs in retirement (including the costs associated with long-term care) and reviewing the various long-term care protection options.

For families whose primary goal is the tax-efficiently transfer of assets to the next generation, however, life insurance with a long-term care rider may be an optimal way of achieving greater peace of mind by protecting your legacy while ensuring you have sufficient assets earmarked to provide the type and level of care you desire.

Protect your estate

We can work with you to provide peace of mind. Consult with a Private Wealth Management advisor or learn more about SunTrust Private Wealth Management.

National Clearinghouse for Long Term Care Information (www.longtermcare.gov)

Different costs and rider charges apply to different insurance solutions.  See your advisor to obtain the charges applicable to your individual situation.

This content does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

Related

Investment and Insurance Products:

Are Not FDIC or any other Government Agency Insured   Are Not Bank Guaranteed  May Lose Value 

© 2018 SunTrust Banks, Inc

equal housing logoSunTrust Bank is an Equal Housing Lender. Member FDIC

equal housing logoEqual Housing Lender. SunTrust Mortgage, Inc

SunTrust, SunTrust Mortgage, SunTrust PortfolioView, SunTrust Robinson Humphrey, SunTrust Premier Program, AMC Pinnacle, AMC Premier, Access 3, Signature Advantage Brokerage, Custom Choice Loan and SunTrust SummitView are federally registered service marks of SunTrust Banks, Inc. All other trademarks are the property of their respective owners.

Services provided by the following affiliates of SunTrust Banks, Inc.: Banking products and services are provided by SunTrust Bank, Member FDIC. Trust and investment management services are provided by SunTrust Bank, SunTrust Delaware Trust Company and SunTrust Banks Trust Company (Cayman) Limited. Securities, brokerage accounts and insurance (including annuities) are offered by SunTrust Investment Services, Inc., a SEC registered broker-dealer, member FINRA, SIPC, and a licensed insurance agency. Investment advisory services are offered by SunTrust Advisory Services, Inc., a SEC registered adviser. GFO Advisory Services, LLC is a SEC registered investment adviser that provides investment advisory services to a group of private investment funds and other non-investment advisory services to affiliates. Mortgage products and services are provided by SunTrust Mortgage, Inc.

SunTrust Mortgage, Inc. - NMLS #2915, 901 Semmes Avenue, Richmond, VA 23224, 1-800-634-7928. CA: licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, IL: Illinois Residential Mortgage Licensee #MB-989, Department of Financial and Professional Regulation, 100 W. Randolph, Suite 900, Chicago, IL 60601, 1-888-473-4858, MA: Mortgage Lender license #-ML-2915, NJ: Mortgage Banker License - New Jersey Department of Banking and Insurance, NY: Licensed Mortgage Banker—NYS Department of Financial Services, and RI: Rhode Island Licensed Lender.

"SunTrust Advisors" may be officers and/or associated persons of the following affiliates of SunTrust Banks, Inc.: SunTrust Bank, our commercial bank, which provides banking, trust and asset management services; SunTrust Investment Services, Inc., a registered broker-dealer, which is a member of FINRA and SIPC, and a licensed insurance agency, and which provides securities, annuities and life insurance products; SunTrust Advisory Services, Inc., a SEC registered investment adviser which provides Investment Advisory services.

SunTrust Private Wealth Management, International Wealth Management, Business Owner Specialty Group, Sports and Entertainment Group, and Legal and Medical Specialty Groups and GenSpring are marketing names used by SunTrust Bank, SunTrust Banks Trust Company (Cayman) Limited, SunTrust Delaware Trust Company, SunTrust Investment Services, Inc., and SunTrust Advisory Services, Inc.

SunTrust Bank and its affiliates do not accept fiduciary responsibility for all banking and investment account types offered. Please consult with your SunTrust representative to determine whether SunTrust and its affiliates have agreed to accept fiduciary responsibility for your account(s) and if you have completed the documentation necessary to establish a fiduciary relationship with SunTrust Bank or an affiliate. Additional information regarding account types and important disclosures may be found at www.suntrust.com/investmentinfo.

SunTrust Robinson Humphrey is the trade name for the corporate and investment banking services of SunTrust Banks, Inc. and its subsidiaries, including SunTrust Robinson Humphrey, Inc., member FINRA and SIPC.