Calculate Long-Term Care Risks

By:Robert Moore, Thursday, November 16th, 2023

Legal Groundwork

One of the biggest risks to the continuation of family farms is potential Long-Term Care (LTC) costs.  On average, about two-thirds of us will need some type of LTC during our lives.  The average nursing home in Ohio costs around $100,000/year.  A few years in a nursing home can put severe strain on the finances of a farming operation.

There are several strategies that can be implemented to help reduce the threat of LTC costs on farming operations.  However, a risk assessment must be completed before it can be determined which strategy is best.  For example, a farming operation with significant income and financial resources may have low risk to LTC costs and thus may not need aggressive planning.  A farming operation with limited income and financial resources may need aggressive planning to help protect farm assets.

To help with the LTC risk assessment, the OSU Agricultural and Resource Law Program has developed a calculator to help determine LTC risks to farm assets.  The calculator determines the assets that will be depleted if LTC costs are incurred.  Income, LTC costs and the assets owned by a farmer are all factored into the analysis.

After using the calculator and analyzing the risk of LTC costs to farm assets, a decision can be made as to the appropriate LTC strategy to implement.  Deciding upon a strategy before assessing LTC risks can lead to overly aggressive planning or leaving farm assets unnecessarily exposed.  A risk analysis is the best way to ensure that the proper LTC strategy is implemented for each specific farming operation.

The Long-Term Care Risk Calculator is available at https://farmoffice.osu.edu/law-library/estate-transition-planning.  The calculator includes a video explaining how to use the calculator and how to interpret the results.  For information on LTC costs and their impact on farming operations, see the Long-Term Care and the Farm publication available at farmoffice.osu.edu.