Unlock Peace of Mind: The Power of Long-Term Care Planning to Protect Your Clients' Futures

As financial advisors, our primary mission is to help our clients protect what matters most to them. One increasingly critical aspect of financial planning is long-term care. While this topic may initially seem daunting, approaching it with the right mindset can be a powerful way to safeguard both your clients' financial future and the well-being of their loved ones.

Long-term care planning isn't just about managing finances—it's about protecting families. Consider a scenario where a client's parent develops dementia and suddenly requires extensive care. How will they ensure their loved one receives the necessary care without straining their finances or the well-being of the healthy spouse?

These are challenging questions, but with the right planning, your clients can achieve peace of mind, knowing they are prepared for whatever challenges life may bring.

Long-term care is often required due to two main types of impairments: chronic health conditions and cognitive impairments. Chronic health conditions might necessitate help with daily tasks like cooking, cleaning, or paying bills. Cognitive impairments, such as dementia or Alzheimer’s, can mean that a person can no longer manage their affairs or live safely on their own.

Long-term care planning ensures that individuals can perform basic activities of daily living, such as getting in and out of bed, using the bathroom, bathing, dressing, and eating. If someone is unable to perform at least two of these activities, most companies will determine that long-term care is needed. Cognitive impairments that affect a person’s ability to care for themselves also qualify.

As the U.S. population ages, planning for long-term care is becoming increasingly crucial. Every day, 10,000 people turn 65, and life expectancies are longer than ever. By 2050, 95 million people in the U.S. will be over 65, with those over 85 being the fastest-growing age group. As demand for long-term care rises, resources may become scarce, driving up costs.

When it comes to paying for long-term care, some clients may plan to self-pay. However, this approach can lead to cash flow challenges, especially if most of their money is tied up in retirement accounts that require taxes to be paid before accessing the funds. This can also affect other aspects of their financial picture, such as Social Security and Medicare costs.

Medicaid is another option, but it generally requires spending down assets first, which isn’t ideal for clients who wish to preserve a legacy for their families.

A more effective solution might be long-term care insurance. Newer policies, known as asset-based long-term care, offer benefits that can pass on to families if they aren’t used. These policies can multiply the benefits of a client’s money while offering tax-free growth and usage. Additionally, if a client’s financial situation changes, many policies allow for cancellation and access to funds.

Long-term care planning is essential because the need is growing. The good news is that there are options available to help your clients plan effectively and protect their assets. By taking action now, they can ensure that they and their families are prepared for whatever the future holds.

At Camas, we have an advisor on staff who has owned and operated healthcare and assisted living facilities for over 15 years. He emphasizes the importance of ensuring that your clients are well-informed so they can make the best decisions for their unique situations.

We are here to support you as an advisor, providing you with the tools and options to best meet your clients' needs. Click on the link to set up a strategy session and explore our Advanced Planning Resources

We look forward to partnering with you and helping you navigate this crucial aspect of financial planning. Let’s work together to stay proactive, plan wisely, and protect what matters most.