The various financial planning needs of the consumer often take precedence based on the core competency of the advisor they're working with, so it's not surprising that one critical aspect is usually overlooked or underestimated: Long-Term Care (LTC) planning.  

Regardless of whether the client or advisor wants to avoid or delay addressing this topic, the importance of addressing LTC needs cannot be overstated, and it's time to accept the realities of LTC and the significance of having a plan for it.  With the acceptance of LTC as an integral component of comprehensive financial planning, it becomes necessary and prudent to memorialize that planning as the advisory community would do with a client's investment policy statement, financial or estate plan, or risk mitigation plan.  

Quite simply, the written LTC Plan is the logical conclusion to prioritizing this vital topic with clients, and a template can be found here:  The Long-Term Care Plan Document, with a questionnaire to help you complete the plan document that can be found here:  The Long-Term Care Plan Document Questionnaire.

The Growing Need for Long-Term Care Planning

As "The Silver Tsunami" crests in 2030, 1 in 5 Americans– including every Baby Boomer – will be over age 65, so the increased need for LTC services is a near certainty.  According to the U.S. Department of Health and Human Services, most Americans age 65 and older will require some form of LTC during their lifetime, and the need may arise due to chronic illness, disability, or simply the natural effects of aging.  Despite this reality, many are unprepared for the physical, emotional, and financial toll that LTC can impose on themselves and their loved ones, and don't understand Medicare, Medicare Supplements, and Health Insurance exclude the cost of care.

The Risks of Ignoring Long-Term Care Planning:

Failing to address future LTC needs can have significant consequences because, without a written plan, clients and their advisors will be scrambling to make decisions during a crisis, leading to hasty and potentially costly choices.  Moreover, the financial burden of LTC can deplete savings, jeopardize retirement goals, and create stress and resentment within the family.  Ignoring LTC leaves clients hoping for a financial future with LTC, which can have dire repercussions, especially when planning is the very reason clients engage their advisors.

The Advantages of a Written LTC Plan:

A written LTC plan provides clarity, guidance, and peace of mind for clients and their families, and by documenting preferences, priorities, and financial strategies, advisors can ensure that a client's wishes are known and respected, especially in the event of incapacity or disability.  Moreover, a written plan allows for proactive decision-making, enabling clients and their loved ones to explore various care options, evaluate insurance coverage, or implement asset protection strategies.  Navigating the complexities of LTC with confidence and foresight necessitates a comprehensive written plan for every client.

Integrating LTC Planning into Financial Advisory Services:

Those in the advisory community should initiate conversations about LTC planning with clients early in their interactions and emphasize the importance of that planning. The integration of the LTC conversation should occur based on the advisor's core competency, allowing them to emphasize how the LTC component can enhance financial security and empower the client to take proactive measures. Thus, the documentation of the LTC component should be straightforward and seamless, centered on the advisory relationship and method of integration.

The need for a written LTC Plan document cannot be minimized based on today's aging client base and the advisory community's crucial role in guiding them through the complexities of LTC planning.  Advisors have a responsibility/duty to prioritize client discussions about LTC, help them understand the risks, explore options, make informed decisions, and finally incorporate a written plan as an ordinary course of client engagement.   

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