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Using a power of attorney to protect long-term care insurance

One aspect of estate planning that is often overlooked involves setting aside provisions to ensure that an individual is properly cared for as he or she ages. Many people will require some form of assisted living care as they move through the later stages of life. Having long-term care insurance in place can help ensure that such coverage can be obtained if and when the need should arise. Many Tennessee residents do not think about including a power of attorney authorization in conjunction with long-term care insurance, but doing so is a savvy planning choice.

As people age, many will experience some form of dementia. While the early stages of dementia can be relatively mild, it is not uncommon for those symptoms to worsen as time goes on. Eventually, many people will lose the ability to handle aspects of their daily lives, such as caring for personal needs, maintaining their home and taking care of financial matters.

In such cases, even an individual who has done everything right in planning his or her estate can still encounter difficulties. A long-term care insurance policy will become invalid if the policy is allowed to lapse due to non-payment. If an individual is suffering from the early stages of dementia, he or she might forget to make the payments on a long-term care policy. It is ironic that such a series of events will lead to the elimination of financial support for long-term care, just as an individual may need to call upon that coverage.

One way to address this issue is to draft a durable power of attorney in advance of needing to make use of one's long-term care insurance. The individual chosen will be granted the power to handle one's finances in the event that cognitive decline is present. This can help ensure that all premiums and other expenses are covered as necessary, and it will also help ensure that a Tennessee resident's long-term care coverage is there when it is needed.

Source:, "Estate Planning Errors: Assumptions Advisors Get Wrong", April 5, 2016

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