Preserving Your Family Business with Long Term Care Planning

If the word “retirement” makes you simultaneously chuckle and cringe, you may be one of the many family business owners who can’t imagine ever fully stepping down from your company. Even as you establish a business continuation plan, train the younger generation, and relinquish some responsibilities, you may imagine yourself busy in a mentoring role for many years to come. It’s no wonder: You’ve worked hard to build a successful business that provides an important source of income for your family, and you don’t want it to be compromised when you no longer run it.

Consider the Future
Have you ever thought about what would happen to your family and your business if you were to need long-term care (LTC) at some point in the future? LTC generally refers to a variety of medical and non-medical care and services to individuals who need assistance with the activities of daily living (ADLs), such as dressing, bathing, meal preparation, and housekeeping. The need for extended care can come about suddenly, as a result of sustaining an accident or illness, or gradually.

As a business owner, planning for this possibility is important to help prevent a LTC event from interfering with future plans for the business. For example, a family member or members may need to scale back their responsibilities or even step down from a role in the business in order to provide caregiving services. Or, the business and its assets may need to be liquidated to pay the costs of a nursing home or other care. If you own a family business, consider taking steps now to help ensure this valuable asset will remain intact for your children, grandchildren, and beyond.

Long Term Care Insurance
LTC insurance can play an important role in the future of your family business. In general, LTC insurance helps cover a variety of services, including at-home care, an assisted living facility, or a nursing home. The cost of a policy varies with the daily benefit amount chosen, the maximum benefit amount, and the elimination period (the number of days for which the insured is responsible for his or her own care before benefits begin). LTC insurance policies can be customized to include inflation protection, which helps ensure that policy benefits keep up with the rising cost of health care by increasing the benefit in line with inflation. It is important to note that adding any riders may involve an additional premium.

With this type of insurance, business owners can minimize the financial risk of extended care and relieve the burden of uncertainty for family members. A dual strategy of open and honest communication with family members and the guidance of a qualified insurance professional may be all you need to help maintain the success of your business and preserve your family’s business ownership.


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