A couple’s financial relationship is no different than a business partnership—each party is exposed to the loss, incapacity, or financial disruption of the other.  In business, that risk is addressed with a Buy/Sell Agreement—defined, funded, and built to protect the remaining partner.  In personal financial planning, however, that same risk—particularly Long-Term Care—is often left undefined, unfunded, and entirely exposed.

In business, a Buy/Sell Agreement does three things: it defines the trigger, quantifies the obligation, and ensures the funding is in place. Without funding, the agreement is meaningless.  Yet when a Long-Term Care event becomes the trigger in a household, there is typically no defined obligation, no funding mechanism, and no protection for the remaining spouse.

Long-Term Care Planning: The Overlooked Threat to Financial 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 that the average couple retiring in 2025 will spend approximately $365,000 on out-of-pocket healthcare expenses during their retirement years.  Even more daunting is how this estimate does not, and functionally cannot, measure the risks associated with LTC, one of the most impactful events that most retirees and their families will ever face.  

While LTC services are the result of cognitive decline or lost independence due to the inability to perform "Activities of Daily Living" (ADL), such as dressing, bathing, eating, transferring, and toileting, the planning challenge is defining the various burdens and obligations that are triggered when those conditions occur.  Again, lining up with the working definitions of a buy/sell agreement for the typical business owner.

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," must 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 align this planning as a component of their comprehensive financial or retirement planning. 

Proper LTC Planning today will measure, monitor, and mitigate the risk to 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, and every couple should have the same level of protection for their financial future.  Since you understand that an unfunded Buy/Sell Agreement is a liability, then your goal for all couples should be to change the way their household is operating with Long-Term Care - Currently an unplanned, unmodeled, and unfunded liability.

While Long-Term Care Planning is an essential part of a comprehensive financial plan, discussing it in terms of a funded Buy/Sell Agreement provides a fresh perspective for many of your clients.

20260320