About the Author

William M. Upson has been a financial advisor and registered principal with an NASD/SIPC member firm since 1982. His primary focus is income and estate planning for his clientele of high net worth individuals, successful professionals, business owners and retirees. He regularly conducts seminars and appears as a featured speaker for government organizations, public companies, charitable groups and professional associations such as: The California CPA Education Foundation; The Society of Financial and Insurance Advisors; Shield Investment Corporation; AmerUs Life; Penn Treaty Corporation; American International Group; Northern California Human Resources Council; Sales and Marketing Association; Board of Realtors, Contra Costa County; State of Washington Association of Insurance and Financial Advisors; The Northern California Regional Financial Planning Conference; The Top of the Table Annual Meeting; and, The National Association of Insurance and Financial Advisors. His topics cover the full range of financially-related subjects, including: Income and estate tax reduction techniques; Business succession planning; Charitable gifting and trusts; Corporate tax planning; and, Tax aspects of long-term care insurance and alternatives. Mr. Upson graduated from the University of Connecticut with a degree in Business Law, and has completed advanced courses at New York University. He is a Chartered Life Underwriter (CLU) and a Chartered Financial Consultant (ChFC) awarded by the American College at Bryn Mawr, Pennsylvania. He is past board member of the American Cancer Society, Habit for Humanity, a trustee of the Endowment Fund, and founder of the Eagle Scholarship Fund.

What is long-term care and who may need it?

Long-term care is a variety of care services that includes medical and non-medical care to people who have a chronic illness or disability. It is assistance with those activities of daily living that an individual cannot accomplish alone, or services typically provided following an injury or illness, or when advanced age and frailty render individuals unable to care for themselves. You may never need long-term care, although this year about nine million men and women over the age of 65 will need long-term care. By 2020, 12 million older Americans will need long-term care. Most will be cared for at home; family and friends are the sole caregivers for 70 percent of the elderly.

Chapter 1 covers in detail the description of long-term care and how it fits into your family’s caring needs.

Why plan for long-term care?

Long-term care insurance is one of the most significant products that people can purchase to protect their assets, to receive the kind of care after a disabling illness or injury, or for the latter days of life. It is critical to plan ahead.

Chapter 2 covers in detail how long-term care fits into your family’s care needs.

How does Medicare and long-term care interrelate?

Unfortuately, Medicare does not cover nursing home stays where you only need help with the activities of daily living, such as eating, getting dressed, or going to the bathroom. Because of this void, long-term care insurance is needed to provide for these services.

Chapter 3 describes what Medicare covers in detail and where its coverage ends and long-term care insurance picks-up.

Are there overlaps between Medicaid/Medi-Cal coverage and long-term care?

Yes, however Medicaid and Medi-Cal have personal income and assets limits that must be met to qualify. These federal and state programs also have other restrictions.

Chapter 4 explains these programs in detail and provides a comparison between them and long-term care provided from insurance.

What role does long-term care insurance play in protecting my assets?

Long-term care insurance is one of the most important products available for protection ones assets. By providing coverage for unexpected illness or injury and the natural needs of aging, the long-term care policyholder is able to lessen the financial burden associated with these needs while maintain the value of their assets.

Chapter 5 details all of the aspects of how long-term care insurance protects you from depleting your assets from these huge costs.

What should I know before purchasing long-term care insurance?

It is essential that you fully understand all of the terms of the policy before purchasing. There are a wide variety of options to choose from that make a difference in terms of the dollars of anticipated benefits.

Chapter 6 provides case examples of different coverages as well as details of the various option choices.

How would my Medical coverage and/or participation in a Health Savings Account affect my planning for long-term care?

Most medical and group insurance provides very little coverage, if at all, for long-term care. Health Savings Accounts may provide some relief.

Chapter 7 provides further detail of the other plans (Federal and personal) available to help in providing coverage. Detailed information about the Health Savings Accounts is also provided.

What are alternative ways to fund long-term care?

There are a number of other alternatives available for covering long-term care needs including Life Insurance, Critical Illness Polices, Annuity Contracts, etc.

Chapter 8 lists those alternative programs as well as the details to assess their pros and cons in providing long-term care coverage.

What are the tax implications associated with my medical/dental and long-term care insurance coverage?

There are tax implications associated with employer provided long-term care coverage (“tax-qualified” policy). It is important that you understand the tax implications of these various types of polices both at the state and federal levels.

Chapter 9 provides details of these tax implications and what you should be asking your tax preparer or CPA about your specific situation.

How could I “insure” my IRA and/or pension plan against the loss of future purchasing power using a long-term care insurance policy?

The expenses associated with an illness or injury requiring long-term care could wipe-out the future value contained in your IRA, pension plan, etc. Using long-term care insurance can be used to “insure” against such a risk.

Chapter 10 offers examples and details pertaining to how long-term care coverage can be structured to protect these valuable assets.

What do I need to know about IRA distribution planning?

There are specific approaches that need to be followed to marke sure your IRA is distributed to your children, grandchildren or other heirs without inheritance and incomes taxes eating up the value.

Chapter 11 provides information about inherited IRAs (rules governing your IRA do not apply to inherited IRAs). Understanding these differences and planning for your heirs is detailed in this chapter.

How can long-term care insurance figure into my estate planning?

Changes in tax laws and long-term care policies provide opportunities ignored by most estate planning professionals. The benefits of long-term care should be an integral part of your planning process.

Chapter 12 discusses the basics of estate planning and details ways to intertwine long-term care insurance with the planning process. The chapter also includes an estate planning questionnaire and a retirement expense worksheet.

What role does Disability insurance play in your planning?

Disability insurance provides for the replacement of your individual income during periods when you cannot earn a living or you have business expenses which must be paid whether you are at work or not. Long-term nursing care coverages are, in some cases, provided as riders to disability policies.

Chapter 13 provides details about disability insurance, when the coverage is appropriate and its tax consequences.

What do you need to know in choosing assisted living, nursing home or nursing care services?

There are a number of factors that should be considered before selection a facility, including physical conditions, services provided, staff, cost of care, etc.

Chapter 14 details those considerations, types of faciities available and sources of additional information to make the decision easier. Also included in the chapter are the average daily room rates for various cities and states.

What are the facts behind the growing world populations and your future living needs?

The age demographics will surprise you not only for the US but for the rest of the world. In a short 40 years, the number of people 60 years and older will outnumber the number of children. The consequences for our economy and Medicare system are obvious as the number of working-age people dwindles.

Chapter 15 provides some very enlightening facts about the state of the world economy and the accelerating needs of the aging population verus the a younger generation to support it.

What role are volunteer support organizations playing in the needs of our aging population?

These volunteer support organizations will be crucial in the years to come as other support systems are not able to keep up with the growing demands of an aging population.

Chapter 16 describes the success of a volunteer support program located in Contra Costa County of the San Francisco Bay Area. The Caring Hands Volunteer Caregivers Program has enabled a large number of frail and needed individuals to stay in their homes only with the assistance of the program’s volunteers.

How does the California Partnership for Long-Term Care legislation affect my long-term care planning?

For the residence of California, the state legislature, working with private insurers, has developed a plan designed to provide long-term care coverage to its citizens. The policies work with the state’s Medi-Cal program but with out the severe asset limitations.

Chapter 17 details the program’s unique festures and benefits associated with your lon-term care planning. In addition, the chapter provides information about the state’s long-term care coverage for public employees and their families.