How can anyone in their right mind ignore the probability of an expensive and extensive need for care in later life? I’ll explain how and why this is so often ignored by consumers and financial advisors after some explanations.
No matter how well you have constructed your pans for retirement and the disposition of your estate, an extended need for custodial assistance can blow up all your carefully crafted expectations. A lifetime of savings and financial planning for retirement hopefully includes a classic estate plan that defines how assets are to be transferred to your heirs and how you want those assets to get there (assuming you still have any assets left at death).
Wills, powers of attorney, medical directives and trusts establish the mechanics and basic structure. Insurance strategies should then arise to facilitate the preservation of assets, leverage risk more economically, address issues of fairness and minimize taxes.
After all this careful thought and consideration, insurance leveraging and financial planning, why would anyone ignore consideration of the fact that 70% of people who reach age 65 will need long-term care?
How can a financial planner governed by fiduciary obligation rules avoid a conversation about chronic illness and the catastrophic costs of such care? Why would an insurance professional not only avoid a clear and present danger to all the hard work, but apparently step away from the opportunity to solve this problem with an insurance solution?
I believe the reason this bankrupting expenditure is so often ignored is that it is an uncomfortable discussion for many financial planners. To properly investigate appropriate solutions the planner needs to think and act more like a social worker. The planner must be familiar with how and why long-term care is needed as well as where such care is generally given and what the costs are.
In many estate planning discussions revocable living trusts are designed for when incapacity arises. Dementia, of which Alzheimer’s is one of 68 different types, is nearly an epidemic with 1 in 8 having it at age 65, 1 in 4 at 75 and half of us by age 85. Then there is arthritis, strokes, Parkinson’s, cancer and a host of other ailments that can incapacitate us.
Our business at TheLongTermCareGuy.com is primarily by referral from financial planners and attorneys. I ask everyone we meet with what caused their interest in the topic of long-term care and the answer is almost always “I read an article about how long-term care bankrupts people and asked my planner about it. He/she said Oh, I’ll have you speak to TheLongTermCareGuy about that”.
Why don’t these planners bring up the subject themselves? Most are not comfortable talking about, planning for, or finding solutions to the catastrophic costs of long-term care. Many are afraid to bring up a subject they do not feel qualified to solve, or have only limited solutions for. Rather than admit there is a concern they cannot address, some ignore the concern.
Most people today seek out experts when specialized solutions are needed. There are many good doctors locally but some drive to the Mayo Clinic in Rochester, MN when hard to solve issues persist. We have our cars serviced by the local garage but use the dealer when difficult or unique problems arise.
If you or your advisors have ignored the devastating financial implications of paying for long-term care, perhaps you too should seek an expert. If you wish to avoid the overwhelming personal job of being the caregiver and coordinating everything for a loved one, you too should seek expert advice while health is good so that appropriate insurance can be put in force for when it is needed.
Dealing with long-term care is a very specialized field, requiring knowledge in social work, care providers, what care costs, gifting implications, Medicaid, tax details, etc. Helping with the costs of long-term care is all we have done for the past 24 years. Investigate with an expert now, while healthy. Call TheLongTermCareGuy.com at (920) 884-3030 or (800) 219-9203 to schedule a time to meet.