America is in the middle of the "Great Wealth Transfer" as an estimated $84 Trillion is expected to be passed on to beneficiaries and heirs in the coming decades.  However, as monumental as that $84 trillion wealth transfer sounds, the massive cost of Healthcare In Retirement (HEINRE) in the form of Long-Term Care (LTC) could slash $11 trillion (or more) of that wealth transfer if the consumers and the advisory community fail to act.  Without proper planning, the failure of the tax, legal, investment, and financial professionals to manage LTC risks will significantly reduce the wealth intended to be passed on, costing consumers (your clients) dearly!

Regardless of the defined advisor/client relationship, the financial consequences of ignoring LTC risks are clear.  The only question remains whether today's trusted "advisors" will alter behaviors and include LTC Planning for every client's comprehensive financial strategy, or will they, as a whole, develop better legal/ethical/moral excuses to account for the $11 Trillion hole they are creating?  Taking a positive approach, let's explore how advisors can act now to protect their client's wealth and safeguard their legacies.

The Silver Tsunami and the Soaring Costs of Long-Term Care

A Silver Tsunami will begin to sweep across the nation in 2030, as 75 Million Baby Boomers - 1 in 5 Americans - will be in or nearing retirement.  No one knows who will need care or the extent and duration of that care, but LTC services come with hefty price tags and unending increasing costs, so the problem becomes a basic math equation…..

As of 2025, the average cost for three years of various levels of LTC is estimated at $180,000 per person, so when you do the math and multiply that by the millions of retirees who will need care, the total cost for the Baby Boomer generation alone will conservatively exceed $11 trillion.  For families hoping to pass on their wealth, these care expenses could severely reduce inheritances, deplete assets, and force difficult multi-generational decisions regarding planning.

The Elephant In The Room & The Need for LTC Planning

LTC Planning as an afterthought or option is no longer acceptable, and it must become a core component for every client's financial, estate, risk management, etc., planning.  The various burdens of aging and LTC are no longer topics that can be ignored or dealt with reactively, especially with an industry pounding the table about being a fiduciary, fee-based everything, or credentials merely for show rather than practice.  Everyone in the advisory community must begin proactively integrating the LTC component into every wealth transfer and legacy planning strategy, and as the costs of care rise, here's why LTC Planning is no longer an option; it's a necessity…..

Preserving Family Wealth: LTC Planning helps ensure clients don't have to spend down their savings, rather than relying on Medicaid to cover care costs or being forced to sell off key assets to cover these costs without a plan.  Advisors can help clients preserve more of their wealth for their heirs by preparing for LTC expenses.

Legacy Protection: The legacy that Baby Boomers intend to leave their families is at risk if LTC is not accounted for, and proper LTC planning ensures clients can leave the financial legacy they worked hard to build without the unpredictability of care costs interfering with their plans.  Advisors can implement various LTC insurance solutions or self-funding strategies to help clients preserve their estates.

Minimizing Physical, Emotional, and Financial Strain: The financial costs of LTC are just one part of the equation.  The emotional and physical strain on families who are left to manage care for a loved one can be overwhelming.  Advisors who address LTC proactively help alleviate these burdens, ensuring their clients' families are prepared for the complexities of care decisions, from selecting care providers to managing ongoing costs.

Leveraging The Tax Code: Somehow, the advisory community knows every tax-advantaged, tax-deductible, tax-deferred, and tax-free concept in the IRS code when it comes to their core competency, but they have little interest in searching for or employing similar strategies for clients and LTC Planning.  These strategies mitigate the financial impact of care costs and protect the client's wealth from excessive taxation, preserving more for heirs.

Legal and Ethical Responsibility

While the financial importance of LTC planning is evident, advisors must also be aware of the legal ramifications of neglecting this essential conversation.  As one class action suit after another goes after investment firms over basis points in sweep accounts, it's only a matter of time before the plaintiff attorneys realize there are $11 Trillion reasons advisors are actively failing to protect by recommending appropriate LTC Planning and strategies.

It doesn't take a law degree to see how the advisory community could become the target for claims of negligence, breach of fiduciary duty, or failure to provide comprehensive advice.  It's not like new account forms, options/margin agreements, tax returns, legal documents, etc., are all executed with signatures.  But, for LTC, they have nothing!  Just see no evil, hear no evil, speak no evil, and repeat the tired advisory mantra of "you got that covered" or "self-funding is the way to go." Though compressed here, these legal ramifications underscore advisors' ethical and professional responsibility to adequately or suitably address their clients' care needs as part of comprehensive and holistic planning.

The Great Wealth Transfer presents a unique opportunity for families to preserve and pass on wealth, but without proper LTC Planning, the cost of care will consume trillions of that wealth.  The advisory community is positioned to ensure their clients' financial legacies remain intact by making proper planning recommendations to every client, so the message is clear: Address Long-Term Care now!  Not because it's your job or to avoid legal jeopardy but because your clients deserve the peace of mind of knowing their families and wealth will be protected and preserved.

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