Tips for a successful long-term care planning talk with your family

Perhaps one of the hardest realizations we have as humans is that aging is inevitable. Even with this truth, we each have control over putting a plan in place that helps us and our loved ones navigate the aging process.

Creating a plan for your own or your parents' aging can seem daunting, but starting early enough and having an open dialogue can make the process go much more smoothly. Here's what should be at the core of your plan as you begin this conversation with your family.

Where to start the long-term care planning talk

As financial professionals, we often hear from clients about their struggles caring for an aging parent or grandparent. The emotional toll caregiving can take is particularly acute for those in the sandwich generation. If this sounds familiar, you're not alone in this experience.

That's why it's important to start the conversation with your family as early as possible, especially while they're in good health. If you have siblings, it's a good idea to align with them on what may be involved in your loved ones' care and how responsibilities may be divided based on your duties at home. Once you have an agreement in place, raise the topic with your aging loved one.

The conversation can—and should—also happen the other way around. Parents and grandparents can gain peace of mind by working with their children to decide where they want to live as they age, what happens in case of a medical event and how they'll finance these plans.

Talking about aging and the plans surrounding it is a particularly sensitive topic for many, regardless of whether children or parents bring it up. Some general guidelines on starting the conversation include making notes to help you frame your plan and practicing active listening during the discussion.

Document a long-term care plan

Once you've broken the ice on long-term care planning, there are some specific questions you'll want to answer with your loved ones. This can lead to a longer conversation that involves consulting your financial professional to determine the best way to fund these long-term care plans.

Make sure to document these conversations to help create your plan on how loved ones want to live out their lives. Your plan should also include the following elements.

• Type of caregiving and costs associated with each: Is their home safe to age in place, or should they move? Would they rather go to a facility or have at-home care? What type of care might they need in case of a drastic health event?
• Home equity and Medicaid eligibility: Beginning January 1, 2028, the One Big Beautiful Bill Act, or OBBBA, will standardize Medicaid's home equity limit for long-term care eligibility at $1 million. This federal cap replaces varying state-specific thresholds, previously ranging from roughly $730,000 to $1.1 million. Under the new rule, individuals with home equity above $1 million may no longer qualify for Medicaid long-term care coverage. The limit won't adjust for inflation.
• Cost breakdown of each scenario: Consider creating a multistep plan involving how aging family members want to live both now and when a certain threshold is met. Each part of the plan should have an estimated cost associated with it, which you can explore in Genworth's Cost of Care Survey.
• Your loved ones' financial situation and your role: How much are they receiving from Medicare or veterans' benefits? How much could be pulled from their retirement plan to fund a long-term care plan? What types of tax benefits are available if their care needs change?

Gather the right documents

Another important step in the long-term care planning process is gathering relevant documents. Keep originals in a safe place like a fireproof box, and make digital or paper copies for family members who'll need to eventually execute on the established long-term care plan.

Key documents to collect from aging loved ones include:

• Birth certificate
• Marriage certificate
• Divorce decree
• Citizenship papers
• Death certificate of a spouse or parent
• Powers of attorney
• Property deeds
• Deeds to cemetery plots
• Military discharge papers
• Insurance policies
• Pension benefits
• Medical records
• Insurance policies, including life insurance and long-term care policies

Meet the professionals in your loved ones' lives

It's also crucial to meet the professionals your aging family members interact with on a regular basis, especially while they're still active in their own affairs. Get to know their financial advisor or planner, CPA or tax advisor, estate or family attorney, and healthcare professionals.

When you talk to their healthcare team, be sure to complete the required paperwork to be able to view and discuss medical records. This way, you'll be able to fully attend future medical appointments with aging family members if needed.

Consider a long-term care insurance policy

If you're early enough in the planning process with aging relatives, you may want to consider long-term care insurance. Incorporating this type of policy into your family's plan can help parents and grandparents age in the location they want while knowing it fits into their overall financial plan. It can also help ease the financial burden on adult children and other family caregivers.

The bottom line

Caring for an aging loved one can be an emotional roller coaster. While long-term care planning can't completely erase these feelings, having an established plan can help ease the challenges when navigating these inevitable changes. Establish open lines of communication with your family so you can plan before a crisis hits.

To learn more about planning for your family's long-term care, get in touch with a First Citizens Wealth consultant.

Key takeaways

• Long-term care planning is easier and more effective when families start the conversation early.
• Documenting care preferences, costs and financial responsibilities provides clarity for all involved.
• Gathering documents and meeting your loved ones' advisors can set you up for smoother caregiving later.