A serious illness of a loved one can have a heavy financial,
emotional, and physical impact on a family. Throughout our lives, we
will all know or live with someone who needs long-term care. The costs
of providing care for a disabled person can be significant, and can
cause a family to suffer emotional and financial hardship. But with
proper planning, family businesses can minimize these hardships.
Providing care for a loved one can be psychologically devastating. So it comes as no surprise that results from many studies show that caregiving has a negative effect on the family. The emotional impact often results in the abuse of alcohol and prescription medications, along with incidences of coronary heart disease and mood disorders.
Your family finances and wealth are also negatively impacted by a family member's need for long-term care. According to several studies, the typical cost to stay in a nursing home is around $72,000 per year. A typical stay for a patient is around 3 years.
Even if you choose to take care of your loved one yourself, the costs can still be considerable. For example, research studies indicate that wage, Social Security, and pension losses due to caregiving is on average $304,000. In realizing this potential situation, we can understand how a sickness can seriously impact your family finances, harmony, and dignity.
To help prevent emotional and financial problems, it is important to discuss your circumstances as a family and come up with a long-term care strategy with your advisers. Your strategy should consist of two main goals. First, is to protect the physical and emotional well being of your loved one by supervising their care; not providing it. The second objective is to preserve your family finances. This can be done by having someone else pay for that care.
Part of the solution may be to purchase an insurance policy to cover the cost of home health care or long-term care. A popular strategy is to have your family business finance the expenses because of the tax benefits. For instance, if you have a C corporation you can set up a long-term care strategy to cover owners, their spouses, and select employees. These premiums are tax deductible, and could be tax-free if certain terms are met.
In general, most people pay their premiums for life. But many businesses elect to pay the cost over a shorter period of time, say ten years. This allows them to capitalize on their deductions and still get coverage for life. The tax implications for caregiving policies are detailed, and mostly depend on the nature of the business involved. Consult your tax advisors to make sure you are following all the rules.
It is apparent that caring for a sick loved one can be a very stressful situation for a family to deal with. At some point, most families have to provide caregiving for a loved one, and it often affects many areas of family life. By having open discussions with your family members, deciding on the type and form of care, and developing a viable financing strategy, your family and business have a better chance at maintaining family harmony and wealth.
Providing care for a loved one can be psychologically devastating. So it comes as no surprise that results from many studies show that caregiving has a negative effect on the family. The emotional impact often results in the abuse of alcohol and prescription medications, along with incidences of coronary heart disease and mood disorders.
Your family finances and wealth are also negatively impacted by a family member's need for long-term care. According to several studies, the typical cost to stay in a nursing home is around $72,000 per year. A typical stay for a patient is around 3 years.
Even if you choose to take care of your loved one yourself, the costs can still be considerable. For example, research studies indicate that wage, Social Security, and pension losses due to caregiving is on average $304,000. In realizing this potential situation, we can understand how a sickness can seriously impact your family finances, harmony, and dignity.
To help prevent emotional and financial problems, it is important to discuss your circumstances as a family and come up with a long-term care strategy with your advisers. Your strategy should consist of two main goals. First, is to protect the physical and emotional well being of your loved one by supervising their care; not providing it. The second objective is to preserve your family finances. This can be done by having someone else pay for that care.
Part of the solution may be to purchase an insurance policy to cover the cost of home health care or long-term care. A popular strategy is to have your family business finance the expenses because of the tax benefits. For instance, if you have a C corporation you can set up a long-term care strategy to cover owners, their spouses, and select employees. These premiums are tax deductible, and could be tax-free if certain terms are met.
In general, most people pay their premiums for life. But many businesses elect to pay the cost over a shorter period of time, say ten years. This allows them to capitalize on their deductions and still get coverage for life. The tax implications for caregiving policies are detailed, and mostly depend on the nature of the business involved. Consult your tax advisors to make sure you are following all the rules.
It is apparent that caring for a sick loved one can be a very stressful situation for a family to deal with. At some point, most families have to provide caregiving for a loved one, and it often affects many areas of family life. By having open discussions with your family members, deciding on the type and form of care, and developing a viable financing strategy, your family and business have a better chance at maintaining family harmony and wealth.
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