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 really costly, and can cause a family to suffer emotional and financial hardship. But with proper planning, family businesses can minimize these hardships.
The mental and emotional stress of providing care is often overlooked. Feelings of guilt, responsibility, dependence, responsibility, shame, anger, and envy which are all apart of caregiving can rip families apart. It is no wonder that many studies suggest that providing care may lead to coronary heart disease, depression, along with the abuse of alcohol and prescription medications.
Caregiving can also have a negative effect on your family finances. Studies suggest that the typical nursing home cost is around $72,000 per year. The average stay is about 3 years.
You could provide the caregiving yourself, but it still can cost a significant 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 understand 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 situation as a family and come up with a long-term care plan with your advisers. Your strategy should involve two main goals. First, is to protect the physical and emotional 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. Paying the costs 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 criteria. If certain provisions are met, the fees could be tax deductible, and the benefits tax-free.
Typically, most people finance their premiums for life. But many businesses elect to pay the fees over less time, say ten years. This allows them to maximize their deductions and still have coverage for life. The tax implications for caregiving policies are complicated, and mostly depend on the type of business involved. Get advice from your tax advisors to be certain you are following all the regulations.
It is apparent that providing care for a sick loved one can be a stressful time in one's life. It can impact many areas of a family and a business. By having open discussions with your family, deciding who will provide the care, what form of care to provide, and how to finance that care, you will help keep your family, business, and finances intact.
The mental and emotional stress of providing care is often overlooked. Feelings of guilt, responsibility, dependence, responsibility, shame, anger, and envy which are all apart of caregiving can rip families apart. It is no wonder that many studies suggest that providing care may lead to coronary heart disease, depression, along with the abuse of alcohol and prescription medications.
Caregiving can also have a negative effect on your family finances. Studies suggest that the typical nursing home cost is around $72,000 per year. The average stay is about 3 years.
You could provide the caregiving yourself, but it still can cost a significant 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 understand 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 situation as a family and come up with a long-term care plan with your advisers. Your strategy should involve two main goals. First, is to protect the physical and emotional 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. Paying the costs 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 criteria. If certain provisions are met, the fees could be tax deductible, and the benefits tax-free.
Typically, most people finance their premiums for life. But many businesses elect to pay the fees over less time, say ten years. This allows them to maximize their deductions and still have coverage for life. The tax implications for caregiving policies are complicated, and mostly depend on the type of business involved. Get advice from your tax advisors to be certain you are following all the regulations.
It is apparent that providing care for a sick loved one can be a stressful time in one's life. It can impact many areas of a family and a business. By having open discussions with your family, deciding who will provide the care, what form of care to provide, and how to finance that care, you will help keep your family, business, and finances intact.
About the Author:
To increase your knowledge on strategies affecting business-owning families, consider reading additional articles on family businesses.
No comments:
Post a Comment