Long term care insurance can be worthwhile to protect against high nursing home costs.  The insurance itself can be expensive.  Premiums have risen dramatically in recent years with several companies pulling out of the market.

For an individual, the key policy factors to consider are:

1.  Daily benefit.  $250/day should cover most costs.
2.  Length of care.  3 years is the average stay.
3.  Protection against inflation.  5% increase is the most common policy provision, but also the most expensive.

A policy provision that should be included is one paying for alternative care such as an in-home assistant.

Apparently Mike Wallace was suffering from dementia at the time of his death.  Because it can never be repeated enough, an individual should have the following documents to enable his family to manage his affairs in the event he suffers from diminished capacity:

1. Health Care Power of Attorney
2.  Living Will
3.  Financial Power of Attorney
4.  Revocable Trust

A woman’s 1988 will specified that all of her pets were to be euthanized upon her death. Presumably, she was concerned about them being mistreated after her death.  When her trustee, 5/3 Bank, noticed that animal related charities were the primary beneficiaries of her assets, after talking with neighbors and friends they found a home for her healthy, 11 year old cat instead. They surmised that she would prefer a good home for the cat to euthanizing.

Two lessons can be learned:

1.  Clients should update their wills to reflect their current circumstances and wishes.
2.  Pet trusts can be used to provide for animals after the death of the owner.

Props to 5/3 for being humane.

Clients often ask my advice about buying time shares.  I almost always advise them to avoid the purchase unless they plan on using it regularly.  This articleaffirms that time shares rarely appreciate (in fact prices on some units are $1) and that annual maintenance fees are expensive (average is over $700).

For clients with large estates ($5 million+), this is the year to make large gifts.  If the client is worried about needing the funds in the future, the client can make the gift in trust and have the spouse be a beneficiary of the trust (which indirectly benefits the client if the couple remains married) with the assets ultimately distributed to the children.

The ability to make large gifts will most likely lapse next year due to changes in the gift tax law.