Sound decisions aren't made in a vacuum. Whether clients are planning their investments, living arrangements or spending strategies, they should always consider a variety of factors and extenuating circumstances.
Never is this truer than when making late-life health care decisions. How will clients protect their assets as they receive care? Who will care for them when their spouses die? How can they prevent their heirs from fighting over what remains? To answer these questions, you need input from those who will help them carry out their wishes.
While many of these issues also require legal counsel advisors are in a great position to help. Whether planning ahead or responding to a crisis, clients need advice from those who have helped them build their wealth – how to protect it, how to best use it for health care costs and how to ensure what's left ends up in the right hands.
Assets and inheritance
Earlier planning is ideal, but health care crises spur many people to take last-minute actions with assets. And while some clients prefer privacy, the best way to ensure wishes are carried out is to involve heirs and executors.
"I'd start with the basics, making sure clients have their legal documents in place," says Meg Muldoon, assistant vice president of Advanced Sales at Penn Mutual. "A health care proxy and financial power of attorney allow a person to make medical and financial decisions on the client's behalf."
Those powers may not be given to the same person, but for many clients, children are the best people to handle the responsibility.
Wills and trusts are just as critical. Wills spell out where the assets in the client's name will go after they die, while trusts transfer specific assets from the client to a beneficiary via a trustee. Wills rarely supersede other beneficiary designations, so it's even more important for clients to make their wishes known to their family. With clear communication and thorough power of attorney (POA) documents, they can avoid most disputes.
Things can still get ugly, though, especially when clients neglect to tell their children about certain assets.
"I advocate partnering with an impartial executor, so there's an orderly distribution of assets when a person passes," says Bill van Sant, senior vice president and managing director of Univest Wealth Management.
Planning for care
Of course, a client may not have any assets left to allocate if their nursing care costs an arm and a leg.
"Most people don't realize how quickly assets get gobbled up, especially when they're in full-scale care at over $10,000 per month," says van Sant. Fortunately, family members can help clients make cost-effective decisions, even when they're incapacitated.
The health care POA in particular designates an agent to make medical decisions on the client's behalf. Nursing home selections, hospital care and even nutrition are all included. Still, they must abide by the principal's wishes, so the earlier your clients and their kids discuss – and the more they put in writing – the better.
