A sound plan for an individual's Long-Term Care Planning (LTC) strategy addresses two critical components. The first of course is to assess the financial effect that a long-term health care event may have on the individual’s retirement portfolio. Second and equally as important is the need to evaluate the emotional impact the event would have on family, friends, and neighbors.
Many advisers focus solely on the first issue, but the effect on the caregivers should not be overlooked when planning long-term care. Considering that 60 percent of all long-term care is provided in a home or community setting—and the spouse, children, or other family and friends manage and provide that care—many challenges can potentially arise.
From the family's perspective, a thorough plan for LTC should address the following questions:
- Who in the family will develop a plan of care for the loved one?
- What expertise does that individual have in the LTC delivery system?
- Who continues to monitor and adjust the plan of care as the patient's needs change?
- Where will the caregivers come from, and who will scrutinize the caregivers' backgrounds and level of expertise?
- If the care required is complex and involves several care disciplines, who in the family understands this and has the time and talent to develop the care plan as well?
- If the individual requiring care is in a second marriage, is the current spouse the sole voice for the type and setting of the care, or are children from the patient's first marriage (or even second marriage if over 18) entitled to a voice?
- Is a durable power of attorney for health care in place?
In essence, these questions help determine who becomes the patient's "Health Care Advocate" (HCA). The naming of such a person is critical, particularly if the individual is alone and has no readily identifiable HCA.
Delicate and emotionally charged, these questions must be considered before care is needed. In many cases, the stress of caring for a loved one brings families together long enough to tear them apart. Every member of the family brings his or her own set of values and perceptions about the care to be provided. Unsurprisingly, arguments may ensue between children and parents or among siblings. The individual requiring care may have little to say in the matter, particularly if this individual has any kind of impairment. Rational and careful decision-making suffers under these conditions.
A thorough LTC plan, therefore, may call for the provision of an appointed HCA whose unbiased focus can provide the individual with the best care possible. A qualified HCA is a professional in geriatrics with experience and specialized training in developing a detailed plan of care for chronically or cognitively ill patients. The HCA understands how to navigate the LTC delivery system to provide the family and patient with the best care available. The HCA would be responsible for monitoring and adjusting the plan of care as the individual’s health needs change. The HCA also would help the family identify and interview health care providers, providing background checks and vetting to ensure providers deliver excellent care.
Most quality LTC insurance policies provide an HCA as a policy benefit. This is yet another reason LTC insurance should be part of a well-designed LTC strategy. As the graying of America continues, more high net-worth clients will look to their advisers to help them ease both the financial effect on their retirement portfolio and the physical and emotional hardships of caring for a family member.
About the author
Bill Borton is Managing Principal of W.R. Borton & Associates, a specialist in asset protection strategies and extended-care solutions for high net-worth clients. Bill's firm develops individually tailored solutions in coordination with each client's financial, tax and estate planning advisors to transfer this long-term care risk using a wide range of available insurance products. Bill can be contacted by phone at 856.817.6100, by email at email@example.com or through the online form on his website.