Special Situation Strategies
Learn more about what choices you have as you consider extended-care strategies for you and your family. We help you pursue the financial security and care of loved ones with disabilities through a specialized trust plan.
Understanding Extended Care
Addressing the potential risks of extended-term care expenses may be one of the biggest financial challenges for individuals developing a retirement strategy.
Seven in ten people over age 65 can expect to need extended care services at some point. So understanding the various types of extended care services – and what those services may cost – is critical as you consider your retirement approach.1
What Is Extended Care?
Extended care is not a single activity. It refers to a variety of medical and non–medical services needed by those who have a chronic illness or disability – most commonly associated with aging.
Extended care can include everything from assistance with activities of daily living – help dressing, bathing, using the bathroom, or even driving to the store – to more intensive therapeutic and medical care requiring the services of skilled medical personnel.
Extended care may be provided at home, a community center, an assisted living facility, or a skilled nursing home. Extended care is not exclusively for the elderly; it is possible to need extended care at any age.
How Much Does Extended Care Cost?
Extended care costs vary state by state and region by region. The 2023 national average for care in a skilled care facility (single occupancy in a nursing home) was $115,007 a year. The national average for care in an assisted living center (single occupancy) was $54,289 a year. Home health aides cost a median of $28.64 per hour, but that rate may increase when a licensed nurse is required.1
What Are The Payment Choices?
Often, extended care is provided by family and friends. Providing care can be a burden, however, and the need for assistance tends to increase with age.2
Individuals who would rather not burden their family and friends have two main choices for covering the cost of extended care: they can choose to self-insure or they can purchase extended care insurance.
Many self-insure by default – simply because they haven't made other arrangements. Those who self-insure may depend on personal savings and investments to fund any extended care needs. The other approach is to consider purchasing extended care insurance, which can cover all levels of care, from skilled care to custodial care to in-home assistance.
When it comes to addressing your extended care needs, many look to select a strategy that may help them protect assets, preserve dignity, and maintain independence. If those concepts are important to you, consider your approach to extended care.
Special Needs Trust
In a time of great debate over medical coverage, government programs, and expanding deficits, a Special Needs Trust can assure that your loved one receives the maximum benefits afforded by law and preserves the assets that may supplement and enhance their life. Special needs trusts are often established by the parents or relatives of a disabled child, with funds to be used to pay for supplemental or living expenses of the disabled person not paid by other sources. Special needs trusts can also be set up with the disabled person’s own funds, again to provide for supplemental medical or living expenses.
A Special Needs Trust is like other trusts: It is a separate, legal entity that allows the donors to gift assets to a second person, the trustee, to be used for the benefit of someone else—in this case, a special needs child or dependent adult. Funds from this type of trust are not used to pay for benefits that would otherwise be provided by state or federal programs.
To maximize the use of assets and income for a Special Needs trust it is often wise to enlist the help of an experienced financial advisor, a tax professional and an estate planning attorney.
Frequently Asked Questions
1. How do I financially plan for a divorce?
Divorce changes both financial and emotional landscapes. We help by: Reviewing division of assets, debts, and retirement accounts; Evaluating spousal support and child support impacts; Updating estate plans and insurance beneficiaries; Establishing new budgets and savings goals; Planning tax implications of settlements. Divorce is disruptive, but with planning, financial stability can be regained. A clear plan brings confidence in a new chapter.
2. What should I do financially after receiving an inheritance?
Pause, plan, and be intentional. Inheritances often come with both opportunity and complexity. We help by: Reviewing tax implications (estate, income, capital gains); Integrating inherited assets into your portfolio; Protecting wealth with proper titling or trusts; Aligning decisions with long-term goals, not short-term emotions. Inheritance should build legacy, not create stress.
3. How do I plan for caring for aging parents?
By balancing compassion with financial planning. Key steps include: Reviewing long term care costs and insurance options; Coordinating Medicaid planning if necessary; Structuring powers of attorney and healthcare directives; Balancing your own retirement needs with caregiving costs. We create plans that protect both generations. Planning ahead eases financial and emotional strain.
4. What financial steps should I take after losing a spouse?
Focus on stability before big decisions. We assist by: Reviewing survivor Social Security and pension benefits; Re-titling accounts and updating beneficiaries; Managing immediate cash flow and debt; Revisiting long-term goals in light of new circumstances. We move at your pace— urgent needs first, bigger planning later. Compassionate guidance helps turn uncertainty into clarity.
5. How do I manage finances during a job loss or career change?
Prioritize essentials and preserve resources. Strategies include: Building or tapping emergency funds; Reducing discretionary spending; Evaluating health insurance options (COBRA, ACA marketplace); Reviewing retirement plan rollovers or preservation; Planning tax effects of severance or unemployment benefits. Career changes can also be opportunities for restructuring finances. A plan turns disruption into opportunity.
6. What should I do with stock options from my employer?
Treat them as part of your bigger financial picture. We evaluate: Vesting schedules and exercise timing; AMT (Alternative Minimum Tax) exposure; Diversification risk from concentrated positions; Coordination with retirement and estate planning. Options can be powerful but complex—planning avoids costly mistakes. Smart stock option planning maximizes value.
7. How do I financially prepare for starting a family?
Plan for new expenses and future priorities. Key considerations: Adjusting budgets for childcare, healthcare, and housing; Starting or increasing education savings (529 plans); Reviewing life and disability insurance; Updating wills and guardianship documents; Balancing retirement savings while supporting new family needs. A growing family deserves a growing plan.
8. What are the financial implications of getting remarried?
Blending families means blending finances carefully. We review: Prenuptial agreements and legal protections; Updating estate plans to reflect both families; Coordinating retirement accounts, insurance, and tax filing status; Managing obligations from prior marriages (alimony, child support). Remarriage is a new beginning—financially and personally.
9. How do I handle finances during a major illness or disability?
Focus on support systems and financial protections. Planning includes: Reviewing disability income sources (insurance, Social Security); Managing healthcare costs and insurance coverage; Adjusting spending and savings plans; Coordinating estate and incapacity planning documents; Exploring tax deductions for medical expenses. Financial clarity brings stability in difficult times.
10. What should I consider financially when relocating to a different state?
Taxes, cost of living, and estate laws all matter. Key factors: State income and property taxes; Differences in estate and inheritance tax laws; Housing costs and insurance requirements; Updating estate documents to reflect state laws; Transitioning healthcare coverage and networks. Relocation can improve finances if planned thoughtfully. A move should improve life, not complicate it.
1. GenWorth.com, 2023
2. ACL.gov, 2023
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2024 FMG Suite.
Investors should consider the investment objectives, risks, charges and expenses associated with municipal fund securities before investing. This information is found in the issuer's official statement and should be read carefully before investing. Investors should also consider whether the investor’s or beneficiary’s home state offers any state tax or other benefits available only from that state’s 529 Plan. Any state-based benefit should be one of many appropriately weighted factors in making an investment decision. The investor should consult their financial or tax advisor before investment in any state's 529 Plan.