{3:36 minutes to read} When clients or individuals reach the age of 80-85, sometimes their health is failing. Health care decisions may be made by others (many times the adult children), the appointed health care proxy, or the health care agent. This same adult child/children will also be left in charge of the money decisions. Recently, I had the experience of seeing how that can create a lot of problems.

A client, Ann, had a father with Alzheimer’s. Ann’s father had some money, yet Ann looked at the financial assets of her father as her potential inheritance. Ann is not alone in her view.

Many times the adult children (who have a health care proxy, a power of attorney and are executors) will make decisions pertaining to the health care of a parent with an eye toward preserving the parent’s money. The potential problem is that the decisions regarding the parent’s health care may not be in the parent’s best interest.

I want to draw a distinction between that scenario and a scenario where the same parents had either of these products:

  • A long term care policy;
  • A life insurance policy; or
  • A life insurance policy with a long term care rider.
  • With either of these products, any decisions pertaining to health care might be different. Children might be more willing to spend that money on home aide, nursing care or nursing homes without the worry that it would dissipate the inheritance.

    “Whose money is it anyway?” Is it the future inheritor’s or is it the parent’s?

    This is why it’s so important for people to understand the need for good planning. The right life insurance, long term care or combination of these products would save family members from being placed in a position where they might feel they have to choose to defer the better health care plan in order to preserve the capital for their future inheritance.

    It’s always difficult when people say, “Well, I don’t think I need life insurance or long term care.” That long term care policy might be used to pay for necessary care. The life insurance can also be utilized in the context of replacing money that was spent on the care. The children would have the funds to spend on the parent’s care, knowing that there is still a death benefit backing it up.

    This type of planning is so important, and it allows people to have the best result, so think about it. Whose money is it anyway? Let’s help our clients and families achieve the best result by thinking ahead regarding decisions pertaining to health care that may need to be made by somebody other than themselves.

    Registered Representative offering Securities through American Portfolios Financial Services, Inc. (APFS) Member FINRA/SIPC. Investment Advisory Services are offered through G&G Planning Concepts, Inc. which is not affiliated with APFS. Strategic Wealth Advisors Network and Gassman Financial Group are not affiliated with APFS.

    Any opinions expressed in this forum are not the opinion or view of American Portfolios Financial Services, Inc. (APFS) or American Portfolios Advisors, Inc.(APA) and have not been reviewed by the firm for completeness or accuracy. These opinions are subject to change at any time without notice. Any comments or postings are provided for informational purposes only and do not constitute an offer or a recommendation to buy or sell securities or other financial instruments. Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors.

    Michael Fliegelman, CLU, ChFC, AEP, RFC
    Founder / President, Strategic Wealth Advisors Network
    (631) 262-9254
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    Brokerage Director, MassMutual


    Please note that the information being provided is strictly as a courtesy. Always confer with your CPA prior to attempting to take any tax deduction. Michael Fliegelman is not a CPA, nor should the contained be considered tax “advice”.

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