A serious illness of a loved one can have a grave 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 really costly, and can cause a family to suffer emotional and financial hardship. But with proper planning, family businesses can minimize these hardships.
The emotional impact of providing care to a loved one can certainly be overwhelming. Not surprisingly, many studies show that taking care of someone who is chronically ill has a negative physical and mental impact on those involved. The stress can frequently lead to misuse of alcohol and prescription drugs, as well as cases of depression and coronary heart disease.
Your family wealth and finances are also negatively impacted by a family member's need for long-term care. According to several studies, the average cost to stay in a nursing home is approximately $72,000 annually. A typical stay for a patient is around 3 years.
You could provide the caregiving yourself, but it still can cost a substantial amount. For instance, studies indicate that the Social Security, wage, and pension losses that result from taking time off from the workforce add up to $304,000 on average. We can certainly realize how a chronic illness can have a profound effect on family wealth, unity, and pride.
To help prevent emotional and financial hardship, it is essential to discuss your circumstances as a family and come up with a long-term care plan with your advisers. Your plan should consist of two primary goals. First, is to protect the emotional and physical welfare of your loved one by supervising their care; not providing it. The second goal is to protect your family wealth. This can be done by having someone else finance for that care.
As part of your strategy, you could purchase an insurance policy to cover both home health care and long-term care. Paying the premiums through your business could be advantageous because of the tax benefits. If you own a C corporation, you can set up a plan that will cover you and your spouse, as well as key employees that meet certain conditions. If certain conditions are met, the fees could be tax deductible, and the benefits tax-free.
In general, most individuals finance their premiums for life. But many businesses choose to pay the cost over less time, perhaps ten years. This allows them to capitalize on their deductions and still get coverage for life. The tax implications for long-term care policies are detailed, and largely depend on the nature of the business involved. Get advice from your accountant to make sure you are following all the rules.
It becomes clear that caring for a sick family member can place a huge burden on your family. Many families have to deal with this type of situation at some point, and it often affects several areas of family life. This is why it is important for you to begin planning ahead and have an open discussion with all family members about what type of care will be provided, who will provide the care, and how it will be paid for.
The emotional impact of providing care to a loved one can certainly be overwhelming. Not surprisingly, many studies show that taking care of someone who is chronically ill has a negative physical and mental impact on those involved. The stress can frequently lead to misuse of alcohol and prescription drugs, as well as cases of depression and coronary heart disease.
Your family wealth and finances are also negatively impacted by a family member's need for long-term care. According to several studies, the average cost to stay in a nursing home is approximately $72,000 annually. A typical stay for a patient is around 3 years.
You could provide the caregiving yourself, but it still can cost a substantial amount. For instance, studies indicate that the Social Security, wage, and pension losses that result from taking time off from the workforce add up to $304,000 on average. We can certainly realize how a chronic illness can have a profound effect on family wealth, unity, and pride.
To help prevent emotional and financial hardship, it is essential to discuss your circumstances as a family and come up with a long-term care plan with your advisers. Your plan should consist of two primary goals. First, is to protect the emotional and physical welfare of your loved one by supervising their care; not providing it. The second goal is to protect your family wealth. This can be done by having someone else finance for that care.
As part of your strategy, you could purchase an insurance policy to cover both home health care and long-term care. Paying the premiums through your business could be advantageous because of the tax benefits. If you own a C corporation, you can set up a plan that will cover you and your spouse, as well as key employees that meet certain conditions. If certain conditions are met, the fees could be tax deductible, and the benefits tax-free.
In general, most individuals finance their premiums for life. But many businesses choose to pay the cost over less time, perhaps ten years. This allows them to capitalize on their deductions and still get coverage for life. The tax implications for long-term care policies are detailed, and largely depend on the nature of the business involved. Get advice from your accountant to make sure you are following all the rules.
It becomes clear that caring for a sick family member can place a huge burden on your family. Many families have to deal with this type of situation at some point, and it often affects several areas of family life. This is why it is important for you to begin planning ahead and have an open discussion with all family members about what type of care will be provided, who will provide the care, and how it will be paid for.
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