Financial and Wealth Planning: Building Your Expertise by Developing a Strategy for Life Planning that Includes Aging and Costs of Care

By Pamela D. Wilson, MS, BS/BA, NCG, CSA

If you are a financial or wealth planner, do you have the expertise to develop plans for aging, caregiving, and healthcare costs? Financial and wealth planners support clients in growing assets and managing wealth for the purpose of life planning. How will your clients manage when they are older if you do not focus effectively on this critical part of planning?

Expertise is associated with the letters after names: CFP, CFA, ChFC, or CLU. If you are a financial or wealth planner, do you have the expertise to help clients develop life plans that include planning for health, aging, and care needs? Do you know how a financial plan might change when your client becomes a caregiver or a care receiver? Do you know the costs of care?

Many financial plans focus on today’s career, raising families, having children, and paying college expenses. Fewer plans focus on healthcare, aging, and care needs after retirement. Implementing a broader life planning strategy that includes building relationships with experts in complementary areas will make you a better resource for your clients.

Financial and Wealth Planning Insights

financial planning When creating a plan, how many financial and wealth planners consider the snags related to health, aging, and caregiving that take life off course and significantly impact financial plans? These snags include income tax planning, insurance including disability, health, and long-term care insurance, choosing financial and healthcare fiduciaries, estate planning, charitable giving, paying for care after retirement, and possible incapacity due to cognitive impairment.

As a caregiving advocate and professional fiduciary, I served my clients in the role of trustee, financial power of attorney, billpayer, and personal representative of the estate.

Many of the financial and wealth planners I worked with were familiar with the terminology but not the day-to-day extensive responsibility of these roles. Managing the care of aging adults has financial and healthcare components. Knowledge about money and navigating care is essential.

In my discussions, only a small portion of financial and wealth planners were familiar with and able to discuss the costs of healthcare and care after retirement, including paying for costs of in-home care or cost of care in a care community. There were gaps in awareness about the potential of family financial abuse or the potential of will contests.

The Financial Impact of Care Responsibilities Must Be Considered

The potential for family disagreements about money was an uncomfortable subject. Less mentioned were the effects of Alzheimer’s or dementia on clients’ ability to make financial decisions or manage money. Many planners were unsure of their responsibility when concerns were identified. Knowledge about the extent of the stress of caregiving responsibilities was limited.

Why the gaps? Many financial or wealth planners are a few years past college or middle-aged. Few have lived long enough to support a client through physical disability, retirement, a diagnosis of Alzheimer’s disease, planning to take money out of accounts to pay for long-term care, or death. Most have parents and grandparents still living.

When you have limited direct life experience related to healthcare, aging issues or the daily challenges of living as an older adult, how do you support clients plan for these unexpected aspects of life? Having your client say to another professional, “my financial planner didn’t tell me that,” will not reflect positively on your breadth of knowledge related to life planning..

Clients rely on you to be the expert today when they are healthy. They rely on you in the future, when they become a caregiver or need significant care and funds to pay for care. Financial planners and wealth planners gain expertise during a career. How do financial and wealth planners become a trusted resource for clients in the area where expertise may be lacking?

Aspects of Life Planning for Healthcare and Aging Can Be Complex

There’s a lot to consider specific to long term planning for potential healthcare costs. Healthcare expenses, aging challenges, and care costs may quickly exhaust investment savings after retirement.

Are you aware of the costs of care? Depending on needs, an assisted living community ranges from $5-15,000 a month. If your client wants to remain in their home, 24-hour in-home care ranges from $15-40,000 a month. Aging with health concerns is costly. We all want the option of how and where we will receive care.

Are you planning appropriately to meet the needs and desires of your clients? Have you asked questions to identify plans to address care needs when illness occurs? Does your client know who will provide care? Have care needs been discussed with family members? Is there no family available to provide care? Has he or she expressed a desire for where care will be provided? Do you know the questions to ask?

A supplement to the Wall Street Journal provided by Barron’s magazine listed the Top 100 Independent Advisors.(1) Consolidation of financial advisor firms was mentioned as a future trend. Several advisors who moved into management positions were profiled.

A trend not mentioned but of note reading the article, was the limited number of advisory firms reporting the importance of estate planning, certified public accounting, wealth transfers, healthcare, philanthropic coaching, and other non-financial but lifecare planning needs.

Some firms have established networks with estate planning attorneys, insurance professionals, certified public accountants, and healthcare advocates to round out the expertise offered to clients.

For firms willing to invest the time to build a team of trusted experts, this process is viewed as offering a collaborative approach of specialists for financial and wealth planning clients.

This process is similar to healthcare, where a team of individuals with different backgrounds, called an interdisciplinary team, creates what is called a care plan or a treatment plan for a client.

Caregiving Advocacy Intersects with Life Planning

In my role as a caregiving advocate, the first process was to assess, identify, and create a plan to address client needs. Creating a care plan is like creating an encyclopedia of a client’s life. No area of life was considered unapproachable. These subjects are best discussed before crises when making rational decisions seems easier.

Many times, the conversations occurred after a hospitalization, broken hip, or diagnosis of Alzheimer’s Disease. Many plans occurred as a result of a care crisis. Care and financial discussions to pay for care make individuals feel uncomfortable. No one wants to talk about disability or death. The benefit of these difficult conversations is that being proactive allows choices rather than having choices eliminated.

Discussions included assets available to pay for care. Whether applying for Medicaid was an eventual possibility. Medicaid is best discussed earlier rather than later.

Legal matters of trusts, financial and medical power of attorneys, and wills, including the possibility of adult children disagreeing about appointments or a possible diagnosis of dementia or Alzheimer’s disease, were discussed.

We reviewed information about preferences for care, known challenges of an imperfect healthcare system, the possibility of medical errors, end-of-life care, and pre-paid burial or cremation plans.

Healthcare considerations and care preferences affect money and financial plans. The other legal area related to my experience as an appointed fiduciary was discussed.

Examples of what went right and what went wrong were discussed to allow clients to be proactive. My team of legal experts was referred to my clients if the clients had not completed documents or realized that their documents might benefit from an update. A certified public accountant was referred for tax matters. Other experts were referred for other needs.

Preserving Your Reputation By Growing Your Network and Your Expertise

Common and repeated statements of surprise from my clients over more than twenty years included:

I wish we had known about you years ago. You could have saved us time and money.
My doctor or healthcare professional didn’t tell me that.
My financial or wealth planner didn’t talk about Medicaid.
My estate planning attorney wrote my living will but didn’t mention accommodating for things that might go wrong.
How could I have known that my children would financially exploit me?
I never expected to be diagnosed with dementia or Alzheimer’s. This changes the game.
The care community didn’t tell me that my parent would be asked to leave if X occurred.
What do you mean Medicare doesn’t pay for “that”!

We all want to avoid hearing these statements by our clients, “My X didn’t tell me that,” which affects our expertise and reputation. Planning for life is complicated.

A team approach, including legal, healthcare, insurance, certified public accountants, and related experts, is beneficial and necessary to address all possibilities. Collaborating with professionals in similar areas delivers better results for our clients.

Creating a partial financial or wealth plan—without addressing life planning—may place your client in an unexpected situation in the future, saying, “My financial or wealth planner didn’t tell me that.” If this is not the reputation you desire to build, it may be time to consider developing a new financial and wealth planning strategy that includes life planning.

Begin by building relationships with trusted experts one step at a time. Attending national conferences or joining a national group that supports life planning will help you begin making your goal of becoming a trusted expert a reality.

Source:

Garmhausen, Steve. (9/20/18) The Top 10 Independent Advisors. (Special Supplement Reprinted from the 9/17/18 Issue of Baron’s). Wall Street Journal, S1-S12.

Pamela D. Wilson, MS, BS/BA, CG, CSA, a National Certified Guardian and Certified Senior Advisor, is a caregiving and elder care expert, advocate, and speaker. Pamela offers family caregivers programming and support to navigate the challenges of providing, navigating, and planning for care. She guides professionals practicing in estate planning, elder and probate law, and financial planning to create plans to address unexpected concerns identified in her past role as a professional fiduciary. Healthcare professionals are supported by Pamela’s expertise to increase responsiveness and sensitivity to the extensive range of care challenges faced by care recipients and caregivers.

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