A serious illness of a loved one can have a huge financial, emotional, and physical impact on a family. Throughout our lives, we will all know or live with someone who requires 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.
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 family members. The emotional impact often results in the abuse of alcohol and prescription medications, along with incidences of coronary heart disease and mood disorders.
Caregiving can also have a substantial effect on your family finances. Studies reveal that the typical nursing home cost is around $72,000 annually. The average stay is usually 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 job 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 strategy with your advisers. Your strategy 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 objective is to protect your family finances. This can be done by having someone else finance for that care.
As part of your plan, you could buy a plan to cover both home health care and long-term care. Funding the premiums through your business may be beneficial because of the tax benefits. If you own a C corporation, you can set up a plan that will provide coverage for you and your spouse, as well as key workers that meet certain criteria. If certain provisions are met, the costs could be tax deductible, and the benefits tax-free.
Typically, most individuals finance their premiums for life. However, many businesses choose to pay the fees over a shorter period of time, say ten years. This allows them to capitalize on their deductions and still have coverage for life. The tax implications for long-term care policies are complicated, and mostly depend on the type of business involved. Get advice from your accountant to be certain you are following all the laws.
It is obvious that caregiving can be a very difficult situation for a family to cope with. At some point, most families have to provide caregiving for a family member, and it often impacts many areas of family living. By having open discussions with your family members, deciding on the type and form of care, and coming up with a suitable financing strategy, your family and business have a greater chance at preserving family harmony and prosperity.
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 family members. The emotional impact often results in the abuse of alcohol and prescription medications, along with incidences of coronary heart disease and mood disorders.
Caregiving can also have a substantial effect on your family finances. Studies reveal that the typical nursing home cost is around $72,000 annually. The average stay is usually 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 job 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 strategy with your advisers. Your strategy 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 objective is to protect your family finances. This can be done by having someone else finance for that care.
As part of your plan, you could buy a plan to cover both home health care and long-term care. Funding the premiums through your business may be beneficial because of the tax benefits. If you own a C corporation, you can set up a plan that will provide coverage for you and your spouse, as well as key workers that meet certain criteria. If certain provisions are met, the costs could be tax deductible, and the benefits tax-free.
Typically, most individuals finance their premiums for life. However, many businesses choose to pay the fees over a shorter period of time, say ten years. This allows them to capitalize on their deductions and still have coverage for life. The tax implications for long-term care policies are complicated, and mostly depend on the type of business involved. Get advice from your accountant to be certain you are following all the laws.
It is obvious that caregiving can be a very difficult situation for a family to cope with. At some point, most families have to provide caregiving for a family member, and it often impacts many areas of family living. By having open discussions with your family members, deciding on the type and form of care, and coming up with a suitable financing strategy, your family and business have a greater chance at preserving family harmony and prosperity.
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