How Long-Term Care Insurance Affects Your Estate Plan in Washington State
Long-term care planning is one of the most overlooked – but critical – pieces of a sound estate plan. If you live in Chewelah, Deer Park, or Spokane, WA, understanding how long-term care insurance (LTCi) fits into your estate strategy can help you protect your family, your finances, and your legacy.
What Is Long-Term Care Insurance?
Long-term care insurance helps pay for services like nursing homes, assisted living, or in-home caregiving. These expenses are not covered by Medicare and can easily exceed $100,000 per year in Washington State. Whether or not you have LTC insurance dramatically shapes your estate planning options.
How Long-Term Care Insurance Impacts Estate Planning
If You Do Have LTC Insurance:
When LTC coverage is in place, your estate plan can focus more confidently on long-term goals such as:
- Preserving wealth for children or charitable causes
- Using Washington’s estate tax exemption (currently $2.193 million per person in 2025) before it’s lost
- Structuring trusts to pass on a legacy, rather than shielding assets from care costs
- Making gifts, funding donor-advised funds, or setting up trusts for grandkids
If You Don’t Have LTC Insurance:
Without coverage, the estate plan often shifts into protection mode:
- Preserving assets in case of nursing home costs
- Possibly using Medicaid Asset Protection Trusts or delaying gifts
- Avoiding disclaimers that could leave the surviving spouse financially vulnerable
- Structuring the plan around flexibility, rather than tax efficiency
What About WA Cares?
Many Washington residents assume the WA Cares Fund will handle their long-term care needs. Unfortunately, this state-run program provides only a lifetime benefit of $36,500—not nearly enough for a single year of care, let alone the multi-year needs most retirees face.
For residents of Spokane, Chewelah, and Deer Park who want to protect their estate and maintain independence, WA Cares is unlikely to be sufficient. Considering private LTC insurance or asset-based alternatives is essential to building a serious care strategy.
Estate Tax Considerations in Washington State
Washington State has its own estate tax with no portability between spouses. This means if one spouse dies and leaves everything directly to the survivor, the first $2.193 million exemption is lost. But with LTC insurance, couples may feel more comfortable using credit shelter or disclaimer trusts that preserve both exemptions—without worrying about future care costs.
Urgent Update: Washington Estate Tax Changes Coming in 2025
Washington State has passed new estate tax legislation that will take effect July 1, 2025. The exemption amount—the portion of your estate that can pass free of state estate tax—is increasing from $2.193 million to $3 million per person, providing a modest relief to many families.
However, for higher net worth households, the changes may bring more bite than benefit. Estates valued above $9 million will now face a new top marginal tax rate of 35%, a steep jump from the previous top rate of 20%.
This update makes proactive estate planning more important than ever—especially for families in Spokane, Chewelah, and Deer Park whose real estate, business interests, and investment portfolios could push them into taxable territory. Credit shelter trusts, gifting strategies, and charitable planning tools should be reviewed in light of the new thresholds.
Next Steps for Chewelah, Deer Park, and Spokane Families
If you’ve added LTC insurance since your last estate plan was created—or if you’re relying solely on WA Cares—it’s time for a review. Your long-term care strategy affects more than your comfort in retirement. It could make or break your ability to pass on a legacy.
Schedule a complimentary Discovery Call with Deep Creek Financial Planning. We help active retirees and successful business owners in Eastern Washington live abundantly by connecting the dots between their family goals and strategic financial planning.
