As many advisors help clients plan for their future, they often miss a crucial issue at the convergence of health and wealth for aging clients, and that's the question of how to eliminate the financial conflict of interest for heirs who might prioritize an inheritance over your client's need for high-quality Long-Term Care (LTC).   

For example, a client wants to "age in place," and 24-hour Home Health Care costs $240,000 annually, whereas a Nursing Home alternative might cost $96,000 annually…..Heirs could view home care as costing them $144,000 yearly as a decrease in their inheritance.  

Avoiding or resolving the conflict is easier when the advisor can safeguard against that scenario with simple but effective LTC Planning, allowing the advisor to strike a balance between financial legacies and their client's needs.

Implement Long-Term Care Planning:  LTC Planning is a proactive step that can alleviate much of the concern about the cost of care, especially when there's an insurance-based solution to cover the cost.  Even for those with financial resources to cover these expenses, an insurance-based solution can provide clients with desired care while eliminating the financial conflict of interest where children or grandchildren perceive "their" money is being spent.

Open and Honest Communication:  The foundation for any potential conflict of interest is open and honest communication, and by ensuring a client's loved ones are well-informed about the costs and challenges associated with quality care, they can better understand your client's desire for comprehensive care.  Encourage clients to talk with their loved ones about their expectations, desire for specified care, and the importance of maintaining a balance between inheritance and well-being.  Transparency sets the stage for understanding and aligning everyone's priorities, and regular family meetings can provide a platform for open discussions.

Document Your Client's Wishes:  When a client's desires or wishes are memorialized in writing, it becomes a powerful tool to manage potential conflict.   Encourage clients to draft a clear and comprehensive document outlining their preferences for care, detailing the level of comfort, medical treatments, and any specific requirements they may have, as this document will serve as a reference point, guiding your loved ones in making decisions that align with your desires.

Ensure Clients Have An Appropriate Legal Framework:   Whether they establish a Living Will, Advance Directives, or create a Durable Power of Attorney (DPOA), a proper legal framework goes beyond financial considerations and addresses a client's healthcare preferences.  These legal documents provide guidance not only to their family but also to the healthcare professionals to maintain medical treatment preferences should a client become incapacitated or unable to communicate their wishes.  A  trusted family member, friend, or professional as a DPOA will be instrumental in safeguarding a client's wishes, even if there are conflicting views within the family regarding inheritance and care priorities.

Collaboration Among Advisors:   Collaboration between financial advisors, attorneys, tax professionals, and healthcare specialists can provide valuable insights into structuring your client's financial affairs.   Each can offer strategies or solutions tailored to the client's unique circumstances to accommodate the highest level of care and legacy planning goals.   

Understandably, clients will find it challenging to envision loved ones prioritizing an inheritance over their care needs.  However, putting up the guard rails may be the best step an advisor can take to eliminate even potential conflicts of interest.  Meeting a client's expectations for quality care and preserving the financial legacy they wish to leave behind may be some of the best reasons clients (even the most affluent) should consider making this a formal component of their planning.