Taking a simplistic view, a couple's relationship is very similar to the relationship between partners in a business, as there are ramifications on one partner in the event of death, incapacitation, divorce, bankruptcy, or retirement of the other partner.  Successful business owners plan for the unexpected with Buy/Sell Agreements—shouldn’t couples do the same when planning for the financial impact of Long-Term Care (LTC), essentially creating a Buy/Sell Agreement for couples?   

For business owners, Buy/Sell Agreements protect businesses from financial instability when a partner leaves due to death, disability, or other life events. They prevent disputes, ensure continuity, and secure financial outcomes—just like LTC Planning does for couples.

Long-Term Care Planning: The Overlooked Threat to Retirement Security.....

Your clients save diligently throughout their working years to maintain their lifestyle during retirement.  Unfortunately, most don't factor in the cost of Healthcare In Retirement or the impact of potential LTC expenses.  Fidelity puts out an annual report on healthcare expenses in retirement and concludes the average couple retiring in 2024 will spend approximately $330,000 on out-of-pocket healthcare expenses during their retirement years.  Even more daunting is how this estimate does not include LTC, one of the most expensive forms of care that nearly 70% of retirees will require as they age.  

LTC services provide assistance with "Activities of Daily Living" (ADL), such as dressing, bathing, eating, transferring, and toileting, and when discussing potential LTC needs, it's crucial to understand how and where care can and will be provided.  LTC services range from limited care services in the home to full-time custodial care in a nursing home, and those who have difficulty performing two or more ADLs due to physical limitations or severe cognitive impairment are generally considered to qualify for benefits if they have an LTC Plan. 

Perhaps most importantly, your clients should understand Medicare and Health Insurance exclude these services. When you explain how their financial plan needs to account for Health In Retirement in totality, the need for couples to have an LTC Plan will become evident.

The "Couple's Buy/Sell Agreement"

While a formal, legal agreement is required for business owners to implement a Buy/Sell Agreement, there is no such requirement for married couples; however, there may be other concerns for non-married or same-sex couples.   Still though, a Buy/Sell Agreement for business owners, like a "Couples Buy/Sell Agreement," should be adequately "funded," and in the context of this discussion, determining the proper LTC Planning solution(s) is the key to a successful implementation of a plan.  Whether you view it as a Couple's Buy/Sell Agreement or LTC Planning, your clients should address it as early as possible and make it a robust, comprehensive financial or retirement planning component.  

Proper planning today can help ensure a secure retirement and long-term financial goals as your clients prepare for the future.  Every successful business has a plan for unexpected events. Shouldn’t couples have the same level of protection for their financial future?

A Long-Term Care Plan is an essential part of a comprehensive financial plan and discussing it in terms of a Buy/Sell Agreement may provide a fresh perspective on what your clients need.

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