From Crisis to Clarity: Building a Personalized Long-Term Care Funding Plan

Sondra Ziegler (0:01)

Welcome to Second Half Conversations. I'm your host, Sondra Ziegler. This is a space to discuss all kinds of topics about the second half of life, from complicated legal topics like wealth protection and business succession planning that we break down in a practical way, to long term care planning and care navigation when you have a loved one on a care journey, to leaning into fully experiencing new seasons of life, of work and relationships. Our team and guests are here to equip you to take full advantage of where you're at. Because if done right, the second half is the better half. Let's get to it. Most families don't have an elder care plan. They have a series of emergencies, a fall, a hospital stay, a scary phone call. Today, we're going to turn that chaos into clarity with a simple framework for building a personalized elder care plan, one that protects dignity, reduces stress, and helps the whole family feel aligned. Welcome back to Second Half Conversations. I'm Sondra Ziegler, Executive Director at Ziegler Estate Law Group, where our mission is to provide a roadmap for navigating second half of life with peace of mind. Today, I am joined again by certified financial planner, Morgan Marks, Antalya Sear, and Mindy Galina from Heritage Wealth Alliance. And we're talking about how to build a personalized elder care plan, not just financially, but practically. Because an effective care journey isn't only about paying for care, it's about having the right people, documents, options, and decisions mapped out before the crisis forces your hand. So a quick disclaimer. This is educational in nature. This is not meant to be legal advice or financial advice specifically for you because we would need to know about you specifically. So if what we're talking about today sounds like something you need to act on, that you're ready to put in place a financial plan that includes elder care planning and long term care planning strategies, give us a call at Ziegler Sate Law Group, or we'll have a link in our show notes for Heritage Wealth Alliance and Morgan Marks, and you can get started on your planning. So we're thrilled that you've joined us today because we have a great episode planned for you. We're going to walk you through Morgan and Talia and Mindy's process, how they work together to create an elder care plan as part of their holistic financial plan for their clients. And if you're just jumping in, whether you listen to our last episode where we talked about the risk that long term care poses to your estate and to your retirement, or whether you're just jumping in to this episode, the the number one thing that I would want you to know from where I sit is that long term care planning involves both legal planning and financial planning. You need a holistic legal plan, which means not cookie cutter documents, not things that are printed off the internet, and not the documents that you probably did when the kids were little that didn't anticipate a care journey in the second half of life. So you need a holistic legal plan, but you also need a holistic financial plan. And a holistic financial plan, which Morgan and Talia and Mindy explained to us in our last episode, includes planning for a long term care journey. As we're living longer, more and more of us are going to need the care of another person before we pass. And if you're married, you may have a care journey, and then your spouse may also have a care journey that both need to be planned for and there need to be resources to fund. So you need a robust, holistic estate plan, and you need a robust, holistic financial plan. But then guess what? Those two need to be coordinated. And I know we're going get to the coordination aspect of this at the end of our conversation today. But don't get overwhelmed if you're listening to all that right now, because we're going to walk you through it step by step, at least the planning on the financial side. What does it look like and how do we accomplish a holistic financial plan that includes planning for long term care? So before we start describing that planning process that you guys have, which I think is great because it's really going to set our listeners at ease, I first want to ask you though, and this is just to any of you to answer from your experience, why do plans fail most often? If you can speak to that without getting too down in the weeds on your process and some of the strategies that you use.

Morgan Marx (5:11)

It can be a combination of a lot of things. You know, whether we are just kind of burying our heads in the sand and just letting things happen by default is a lot of time what, you know, usually happens. And because we haven't prepared and we haven't planned, we ultimately are planning to fail. So there's a lot of times when retirement planning, from our perspective, it really focuses on investments, Maybe it focuses on taxes, and it probably focuses a good majority of it on retirement income planning. But long term care planning is one of the most overlooked risks in retirement. And if you really want to have a comprehensive and a complete retirement plan, you have to protect that wealth by incorporating some long term care planning in it. And I think a lot of that comes from some misconceptions about what Medicare will cover. And also, some preconceived notions about the ways to solve for an extended care or elder care event. Knowing that you have to plan is half the battle.

Sondra Ziegler (6:40)

And like you said, not planning is a plan to fail because it's definitely one of the options is do nothing. But what I love, and I know you're going to explain this, is how you can game out. Okay, let's look at what happens if you do nothing. If you leave everything just as it is right now, given your health situation, what could that possibly look like for your portfolio, for your spouse, the financial costs, but also the psychological cost, mental and emotional costs to maybe a spouse. So in our last episode, one of the things we talked about, and I just want to touch on it briefly for those that didn't hear that one, I think it's a common misconception that Medicare is going to pay for long term care. Some people even think, you know, the Affordable Care Act is going to pay for long term care, when in fact you explain that neither of those are going to pay for long term care. Medicare is designed for short term rehabilitation. A times lot we'll hear, well, you know, mom fell, she went to the hospital, then she went to rehab and Medicare paid for that rehab stay. But what they don't understand is that is a short term rehab stay. Medicare does not pay for long term care in a long term care facility. There are even misconceptions about how many days of the type of care that Medicare will pay for that you're going to get. And so you explain that a lot of times people hear this one hundred day limit and they think they're necessarily get one hundred days when that may in fact not be the case. So in terms of paying for long term care, how often is it that you have clients sitting in front of you who really think that they really think that Medicare is going to pay for their long term care?

Morgan Marx (8:50)

More often than not a lot. And it's, I think, just a very common misconception. So if you also thought that you were not alone, you're probably in the vast majority of people who believe that Medicare will pay for their elder care journey. And the reality is, is that Medicare covers what we call acute care. It is not meant for custodial care, which is what long term care actually is. And so this creates this financial planning gap, if you will, because there's a lack of understanding and misconception about where Medicare ends and where you have to have a plan in place then to pick up the cost of care beyond what Medicare will pay for. So like you had mentioned, Sondra, you know, most people hear, Oh, Medicare will pay for one hundred days. And that's true, if you continue to qualify. And so you have to continue to improve. And there there's a lot of different rules and assessments that are done along the way. But the majority of people out there do not ever reach that one hundred days. National average is more like twenty six days. So much, much shorter than that one hundred days that they will pay up to.

Mindy Gallina (10:30)

And if I may just add to that as well, because we went through this with my mother-in-law, she ended up with a UTI that went septic, and she spent three weeks in the hospital and then was sent to rehab. And this was news to us as well because we thought, oh, when we left the hospital, the hospital's like, oh, she can have three weeks in rehab and Medicare will cover three weeks. That's not true. Medicare does reassessments every seventy two hours. So they are constantly looking at, are they improving? Are they getting better? Are they going to leave? And the minute that switches from acute to chronic or custodial, Medicare turns off. And that doesn't matter if you hit the twenty one days or if you're at day four, they will turn off the funding. So it's very, very important, like Morgan says, most people will never see one hundred days of Medicare help with their hospital stay. It's much, much shorter than that. And you have to realize that those assessments are continuing and ongoing all the way through your journey.

Sondra Ziegler (11:35)

And that's a tough phone call to get as the family member, as maybe the adult child who's sort of in charge or being called upon to manage this and navigate it. When the nursing home calls and says, okay, you know, your loved one has stopped improving, and Medicare is going to stop paying as of Tuesday of next week, and now you've got to figure out, get the family together and figure out how you're going to pay $7,000, $8,000, $9,000 $10,000 a month in some places for their care. So before we dive into the planning process, another thing real quick that I would love to table set with is what is long term care in terms of the type of care you receive? Because I think there's a lot of people who think long term care is just nursing home care. But when we talk about having a care journey, we're really talking about care that can start at home, you know, and I know that's where most people would rather continue receiving care is at home. But there's home care, and there's assisted living, and there's then the nursing home, but even before home care, there are senior living communities that where you can hire in some care. So there's all different levels of long term care that we can plan for. And, you know, being able to choose where you get care is one of the biggest goals, right? It's a lot of people want to avoid having that conversation. But if you do the planning, you have a much higher chance, a much higher likelihood of being able to receive your care where you choose, rather than having it dictated to you where you're going to have to go. So let's dive into your process. And I'm just gonna let you guys go. And if I'm a client of yours, and I am starting this process to plan with you, how does that look? What does that look like to begin with? Do I I just call you and say, I want to do this elder care plan? Or am I asking for a holistic estate plan? How does that work in your office? And what do I need to prepare for that meeting? How do I need to prepare to meet with y'all and give you the information that you're going to need to do the work that you do?

Morgan Marx (14:18)

So we like to call these our fit meetings. And it is so that we can get a good understanding of where you are currently, what incomes you have coming in, assets that you have available, what are your goals and what are we trying to align? Do you already have a plan in place? Maybe you purchased traditional long term care insurance a long time ago, and because over the years we've had substantial premium increases, you're kind of wondering, number one, is this still the most cost effective way to pay for this? And is my coverage keeping up? So we have a lot of different types of clients that come in for a fit meeting. And essentially it is the opening conversation for us that we are gonna ask you, what are some of the areas that you have concern? Have you had these conversations with your kids or whoever is going to be providing that care? And that's a lot of times, I think a big assumption is that, you know, we all would love to think that our kiddos or our spouse or, you know, our loved ones, our neighbors, our family are going to be able to provide that care for us. But I can tell you, like Mindy had mentioned in our last segment, that a lot of us are in the sandwich generation. We have our careers, we're probably at the busiest times of our lives, we may have children that are still in school, and now we have mom or dad that may be needing some assistance as well. And so figuring out whether or not you've actually had that conversation with your loved one and whether it's realistic that they would be able to kind of stop their lives to be able to help. And so then we go into, well, what kind of education do you have? Are there any preconceived notions that we need to kind of overcome? And we take an education based approach because knowledge is power. And we want to empower you with the information you need in order to make a purposeful and intentional decision. Because if you don't, whether you have a plan in place or not, we talk about getting into an elder care journey, you're going to get somewhere by default. And whether or not you actually like that plan, it's still a plan. And so we take an educational approach, and we like to see what you're doing. We like to get your input, and we want to make sure that your values and your goals are aligned with what your plan for your elder care journey is. And so one of the first things that we do is we talk about awareness. The next thing is we do an assessment, and then we get into alignment, and then one of the most important is the action. So Talia, do you want to talk about how we create this awareness and what we go through with our clients on this planning journey.

Talia Cyr (17:38)

I think for all of you guys listening too, it's so amazing because in regards to awareness, you're already doing the right thing. You're listening to this podcast. You're working with an amazing group of estate law attorneys. And by being aware of some of the things that we already talked about, like the retirement income gap and healthcare risks in your retirement plan, our job as fiduciaries, which we explained what that meant last time, we have to have our clients' best interest in mind. So by having your best interest, we recognize that awareness is the foundation of all the planning that we do. You can't make informed decisions without understanding the landscape of elder care planning. And here are some ways that we will talk about this. We'll talk about what Medicare covers. Sondra had already touched on that. What it doesn't cover. And also just the costs that care may come with. So depending on what state you're in, that will be a factor. Also, state that you choose to retire in may be a factor because you may be living in one state now. If you wanna go retire in Florida, that's gonna bring different set of costs associated with it. Also just the cost between what home care, assisted living, a nursing home, and also memory care. Memory care is one of the most expensive aspects of it. So we will take a look at, okay, here's a different cost based off of states, based off of different types of facilities. And also just what kind of facility you want to be in, because they're not all created equal. There are the Ritz Carlton's, as Morgan likes to say, which they play a pickleball with their members of their facility. They have, you can request a saxophone player in your room if you want to. And that's gonna bring a higher price point than some of our lower cost facilities that may be offered in your state. So some of our clients will actually come in and they'll say, you know what? I only wanna be at this facility. What's that gonna cost? And we'll plan for that. So just being aware of the different options, different levels, we actually do our due diligence on a frequent basis, calling different facilities and saying, what's your current rates? What are your service offerings? And what is the care like actually being in that facility? Because we want to also make sure that our clients feel comfortable where they're going to end up, where their loved ones are going to end up. And that's a huge part of awareness. Just also, like we had mentioned, the difference between long term care is long term care helps with our activities of daily living. So if you need help with bathing, dressing, eating, toileting, transferring, continence, those are all going be things that you're going to be getting with long term care. Whereas Medicare is really the medical side. So that's why they're covering more of that short term assistance. So that's just usually what we start with going over with any new prospective client that we're working with in regards to elder care planning.

Sondra Ziegler (20:36)

This is a random question, but I guess that's a host prerogative. How often do you have people, how aware are people of age in place communities and how often do you have people tell you, I want to be in an age in place community. And for our listeners, an age in place community is just like what it sounds. You can come in when you maybe your needs for care are low, but they have the capability and the different levels of care to keep you in that community for the duration of your care. And sometimes those are the way they're the way you pay the facility is structured differently. There may be a big lump sum payment upfront versus just a straight monthly cost. Yeah, just what can you tell me about that?

Morgan Marx (21:34)

Yeah. So we have a whole spectrum of, you know, just knowledge in terms of, you know, what options are even available. And so I love when we have clients come in and they say, you know, I want to maintain my independence as long as possible. But if I can't, I know that this is where I want to go. And sometimes even the aging care, it's better to go into the independent living. And sometimes you have to enter in through independent living. And so it's good to know, number one, what is the entry point? Because if you wait too long, and you have to enter through independent living, and then all of a sudden you're in your care journey, you're not going to be able to go where you wanted to go. But because there's different cost structure structures, and there's so many different types of agent placed communities that each one is a little bit unique in its offerings and the way that it structures its pricing. And so it's all about timing as well. A lot of these communities have very long wait lists. We're talking about to the tune sometimes of ten years. And so when you start thinking about the planning, and you are now looking ten years into the future, if you start that planning, you know, when you're 75 or 80, you know, there's a lesser likelihood that you're going to be able to get any entry to where you want to be. So we like being the kind of like your your knowledge base and being able to call the facilities, ask about their pricing, what is their current, you know, occupancy rates, most of them are full, and how long is the waiting period. And so we can actually plan for, if this is something you think you may want to do, you probably should go ahead and get on the waiting list, right? If we do all the planning and we think this is something you want to do, get on the waiting list now. And then we also find out what is your waitlist procedures? Because some of them, if they contact you once and you're not ready, okay. They contact you twice, you're not ready. Okay. They contact you three times, you're out. So it just depends on the facility. And we will actually call the directors and talk to them directly so we can figure out not just the independent living, but what does assisted living look like? If there's two spouses, what kind of fees are associated with that kind of care? And then whether they have, you know, skilled nursing and memory care, because there are some facilities that cannot accommodate memory care, you know, diagnosis, like dementia care is specific. And there may be some facilities that can't, you know, offer that kind of care. So it's we definitely like planning for that. And it's fun for us to be able to do that. And our clients get a whole lot of information, not only from what it is, but how it could potentially impact their finances.

Sondra Ziegler (25:11)

Yes. And I think in asking that question, when Talia was talking about the work that y'all do in helping educate clients on what's available in the community where they're planning to retire and what that cost might look like. And if one of the spouses is already on a care journey, or they have a diagnosis that indicates they will have one, What that looks like when for both spouses, because I know, you know, maybe spouse that needs care that's starting a care journey with dementia is going to need memory care at some point, could they go to a facility where the well spouse could also live but in an in a more independent way? So they don't they don't have to be completely separated from their loved one, but they don't all they also don't have to be in that memory care with them. So anyway, that's why I asked. But so this is brilliant that you bring all of this education to the awareness part of your process. So then tell me once you move into from awareness to assessment, what does that look like?

Mindy Gallina (26:26)

Well, that's actually where this goes from just that general education to now it becomes much more personal. And really, the goal of this particular aspect is to get clarity and to understand what an extended care event could realistically look like for you or for each of you. Like Morgan had mentioned in the last episode, we rarely, if ever, have spouses that actually line up exactly the same. There's usually one spouse that's going to have a care event later on, one's earlier, one's longer, one's shorter. So we want to know what each spouse is looking like and what their care event could be. And then we want to know what resources they already have in place to be able to handle it. So we want to look, of course, first at their health and lifestyle. So this could include any chronic conditions that they may already have that needs to be taken into account or lifestyle factors. Are they a smoker? Are they a non smoker? Did they smoke before? That could actually influence those future care needs. Then we look at their family history, what health conditions have their immediate family members dealt with. And when we talk about immediate family members, we're talking about siblings, parents, children. We're not necessarily looking at cousins, aunts, and uncles. So we're looking at immediate family health risks, conditions like dementia, diabetes, heart disease. Those things will all come into play. And then we want to know how long are we looking at? Like how long did their parents live? How long did their grandparents live? How many of those people lived past a certain age? And that may affect their longevity and how long they may be in that long term care event. Morgan had mentioned, have they already made a plan? Do they already have long term care insurance? We definitely want to take that into consideration. And then that changes the conversation a little bit then too, because now we're looking at, okay, is what they have sufficient? Do we need to bulk that up? Because if they're good, we're not going to impose anything on them that they don't need. We just want to make sure that they're going to be okay if they enter an extended care event. If they still need to make some adjustments, then we're looking at, okay, again, income. What's already coming in there? Do they have a pension? Most people, of course, are on social security. So, what is that looking like? Do they have investment income that they're bringing in? What are their assets? Do they have a home? Do they have income properties? Do they have stocks, bonds, investments? We're taking all of this kind of into consideration. And then one of the most important things that we want to discuss too is, of course, as Morgan and Talia had mentioned, is their preference. Do they want to be able to stay at home while they have a care event? Most people do, but I have heard a lot of people say, I do not want my children taking care of me. I want to go to a facility, so I just want them to visit. So that could be what they prefer. So whatever they want to do, whatever is most important to them, we want to make sure that we're doing what we can to make that happen. So basically, what we're doing right here is just trying to find that personalized baseline. And we have a lot of different tools that we use to be able to see how all of these things will interact together. But we do use something called the halo. So that's something that really helps us kind of see how your longevity risk and your health risks all kind of enter the picture together to give us, again, something more than just an average. We want to know specifically what an extended care event will look like for you personally and for each spouse. Yeah, using all these different things, we at least find your goals and we figure out how we can be of most help to you.

Sondra Ziegler (30:41)

Okay, so we touched on this in our last episode about the assumptions that you're building into your assessment. Can you speak to that, Morgan, about how the assumptions need to be different when we're talking about the cost of care versus the cost of other things you'll be purchasing in retirement.

Morgan Marx (31:03)

Yeah. So the inflation assumptions that we use consumer goods is based on CPI. This is a standard financial planning practice, usually right around the three percent mark. Some may be a little lower. If you're more conservative, a little bit higher. But on average, over a long period of time, I think it's pretty acceptable to use about a 3% inflation for your regular consumer goods. You cannot make that assumption with healthcare. And also, you know, if we have any young ones, you can't do the same thing with tuition, right? So we know that there are certain things in life that are just going to go up at a higher rate than our regular consumer goods. And so with long term care and healthcare, in COVID in recent years, those inflationary costs were a lot higher than even, you know, the 5% is what we use in our planning. And even when we will call around to the different, you know, facilities for the assisted living facilities, and we will ask, Do you have a built in inflation into your pricing? And most of them say, Yes, every year we will be going up by 5%. Sometimes a little more, usually not any less. So there is a need, especially with a long time horizon, to make sure that we are accounting for the different inflationary factors in the funds that you are using for your retirement and your income to pay for goods and services versus your long term care and different assumptions that need to be made for that. And so, once we get your assessment done, that's really where we get into the alignment of all of these different planning opportunities. And we then use that report to say, Okay, how much do we actually need to set aside if we want to look at self funding? If that's the answer, that's the answer. But you cannot commingle those funds with the rest of your retirement plan. And if you're doing that, it's dangerous because those funds more than likely will be spent, and there's not a way to make sure that year over year it is hitting a different benchmark than the rest of your funds. And so we start talking, you know, and aligning the different strategies that we have available to us. And that's where we get into talking about all the different ways that we can actually, you know, pay for care.

Sondra Ziegler (34:10)

Okay. I'm glad you're going to talk about that because when I heard you say self fund, for our listeners out there, that just means paying with good old cash or, you know, that you've either got sitting on the sidelines somewhere and and or that you're growing, that Morgan's gonna help you grow into a pot of money that's big enough to pay for all of your long term care needs and your spouses. But as we know, a lot of times that doesn't work out. So what are some other strategies other than self funding or that can be paired with self funding? Like maybe we're going to partially self fund or, and use something else to help pay for care.

Morgan Marx (34:49)

Yeah. And so when we take a look at your elder care planning, we had discussed previously that a big function of it is the amount of income that you have coming in. So even though we may discover in your HALO assessment that you need a big chunk to be set aside, but then we take it a step further and say, Is there any available resources pension, like social security, that could be redirected into paying for some of that care? If you're not out, you know, eating out at restaurants, you're not taking those vacations anymore, maybe there's some discretionary spending that could be reallocated towards paying for some of those long term care expenses. And so we first analyze what guaranteed sources of income you have coming in. Then we analyze how much if we were to add on this additional cost and you were to stay at home, is there anything available that you would have to be able to offset that cost in terms of income? So maybe we don't need to plan to 100%. Maybe we only need to plan to 80% or 60%. But we will tailor that towards your available income. So when we start talking about self funding, you know, we're talking about where is that asset located that you have earmarked? And is it consistently year over year earning a 5% rate of return? And what are the tax implications of it? Because that's another thing that can, you know, what's the the net after tax return needs to be 5%. So now we start talking in, you're adding on taxes, not only are we looking at needing to achieve a rate of 5%, we're looking at needing to achieve a rate of sometimes six or seven or 8%, depending on which tax bracket you're in. And that is a much different plan than where you need to keep up with your retirement income. So that's one of the ways that we first look at, if we did nothing else, what is your plan of action right now? And is it sustainable? And then the next way that we look at it is what most people think of when we think about long term care is long term care insurance. And over the years, I know that it has gotten a really bad rep. There are quite a few of our elders who have plans in place through traditional long term care insurance, and their premiums have skyrocketed. And not only to the tune of 20%, 30%, 50%. Not only that, but the options that are now available for traditional long term care insurance have drastically minimized compared to what we had twenty, twenty five years ago. So it's kind of a compounding of the issue of availability, but also that the insurance companies have redone their cost structuring to be more appropriate and in line with living longer and the inflation that really has impacted the healthcare community, as well as the availability of resources in order to pay for that care. And so no longer are long term care insurance policies only paying for nursing home or skilled nursing care, they're also able to help pay for assisted living facilities, adult community centers, senior living centers, then also at home care. And not just the care, like the physical, but it can help pay for services like laundry, cooking, bill pay. Those are all things that still need to get done that you may not think of when you think of traditional long term care insurance. But that's another thing that we will look at. And I can tell you that even though sometimes, you know, people think of it as a, you know, this term gets thrown out a lot, the use it or lose it system, maybe that's okay in your plan if it's the most cost effective way to cover that care for you. And so we are not biased against what the tool is, but we just want to make sure that you have access to all the information. So we will look at traditional long term care insurance as an option if it makes sense to do so. But the reality is, is that it is from an underwriting perspective, much more difficult to qualify because there are health questions. And by the time most of our clients are looking for coverage, you know, they're in great shape for their age. But, you know, the older you get, you introduce some other potential health issues. And we're not in our 20s anymore and the active superstars that we used to be. And so all of those little things get taken into consideration. And so traditional long term care, you know, definitely the one that kind of gets the worst, you know, bad rap. But if it makes sense in your plan, then we're going to show it. So that's part of, you know, our fiduciary responsibility is not to be to come at this from an unbiased approach and to give you all of the options so that you can make sure that you are making a decision that feels good for you and is in your plan.

Sondra Ziegler (40:59)

Talking about traditional long term care insurance made me think of a couple things. One is something that you said to me a long time ago, which was, you know, your homeowners insurance is use it or lose it money also, but you wouldn't want to be without homeowners insurance. You know, if you have a fire or you have a flood or a hurricane, whatever it is, you need insurance for your home. So the fact that long term traditional long term care insurance is use it or lose it or, you know, if if you don't ever have that long term care journey, you may not get anything out of those premiums isn't necessarily conceptually a deal killer because we most of us who own a home buy insurance just like that for our homes. The other thing though, I wanted to ask you about is, is it the is it the case so anyone who's listening whose loved one has one of those older traditional long term care insurance policies, should they look at that really closely before they allow their loved one to give it up or to stop paying it? Because some of those are like a golden ticket, right? Because they were- tell us about that.

Morgan Marx (42:19)

Yeah. So some of the older policies, you know, I kind of geek out when it comes to this stuff. So, you know, when we are reviewing a policy, we will review it page by page. And we like to say that some of these older plans have these little golden nuggets in it. And I don't care what you do, make sure you keep paying the premiums on it because the benefit of whatever that golden nugget is, if you need it, is so valuable and you may not be able to get it anymore. So when we take a look at the potential of, you know, premiums increasing, it does get stressful, you know, to continue to paying those premiums. And so there's certain provisions that are in plans that maybe if you have one of these, that with certain premium increases, there's a thing called a non forfeiture provision. Your plan may have it, your plan may not have it. But if your plans or your premiums do increase, a non forfeiture provision allows you to maintain the policy, stop paying your premiums, but still retain some form of benefit instead of just canceling. And so we will coach and educate our clients that come in with plans about, okay, this thing, you got to just it's not a good one. We really need to consider additional coverage or a different type of coverage altogether. Or putting our, you know, our eyeballs on it, we may say, Don't get rid of that thing. I don't care what you have to do. But if you have a premium increase, and you don't want to pay the premiums anymore, give us a call. And that's when we'll talk about it. And so there, you know, there's a lot of these plans that are good plans, but they just were mispriced from the get go. And so when you go from paying your $100 a month, then to $500 a month, then to possibly even a thousand dollars per month, it kind of stings. But Sondra, back to your point of, you know, the reason I say that most people have insurance on their homes is because they view their home as their biggest asset. And for some that may be true, and you want to protect that, you want to off that risk. But what most people also don't understand and why a lot of advisors kind of shy away from long term care is that long term care insurance protects all of your assets from depletion. Because if you don't have it in place, you don't have any form of what we call stop loss to be able to stop the reduction of your assets dollar for dollar. And so the reasons why advisors sometimes shy away from planning for long term care is because of the unknown costs of what insurance premiums could potentially do. Now, with the information that we have over the last twenty years, we're really able to see some trends that help us better educate advisors to be able to put those into their plans, and really, you know, give us a good idea of a trajectory and some projections that we can make with that. So traditional long term care insurance, it's not bad. You know, if you have one of these plans, thank yourself because I can tell you that the premiums that you're paying from ten, fifteen years ago, you try to get that same plan today, it's gonna be much more expensive than what you're paying now.

Sondra Ziegler (46:24)

And one of the other things I think of with those older plans is, you know, how some of them used to be written with no limit, like no limit as to what the cost per day could be that they would pay out and no limit to the total that they would pay out over time. And those just pretty much don't exist anymore. Am I right? That the the unlimited?

Morgan Marx (46:47)

There are very rare exceptions. There are still a very limited number of what we call unlimited plans on the marketplace, but those are usually in what we call our hybrid or asset based planning, not in the traditional long term care planning space anymore.

Sondra Ziegler (47:09)

Okay. So tell us about those types of long term care insurance, the hybrid plans.

Morgan Marx (47:16)

So hybrid or asset based planning just means that we are going to use your funds to either purchase a long term care policy that also has either an annuity or a life insurance chassis, that in the event that you do not need your plan for long term care, that asset is still available to your beneficiaries like your spouse or your loved ones. And so when we're doing asset based planning, there's a different multitude of plans that are available and whether we are able to use IRA funds, you know, in traditional long term care insurance, we're not able to use IRA funds. But in hybrid planning, we can. Also, maybe you have a need for some additional life insurance, but you there's only so many dollars to go around, right? And so we can take a little bit of a more of a Swiss Army knife approach and actually get the death benefit coverage that you may need that passes to your beneficiaries tax free, and also cover in the event that you need it for care. So those types of plans, we say there's three ways that you're definitely guaranteed to use it. Either you quit the plan, which if you quit the plan, there's a cash value that's associated with it. Whereas with traditional long term care insurance, unless if you have some form of return of premium rider, there's usually no residual benefit to a traditional long term care. So one way you can use these plans is if you quit it, there's a cash value that you can get out of it. Number two is that you use it, right? That would be the whole point of why we have these plans in place is to protect in the event that you need it, you're going to use it for long term care. And it's going to be in a more tax efficient vehicle than any sort of mutual fund or bond or stock portfolio or annuity that doesn't have a long term care rider on it. It's going to be more tax efficient dollar for dollar. And not only that, it's not dollar for dollar, you're actually leveraging the insurance company's money. So that's another way that you will definitely either use this plan if you quit it, if you need it for long term care, or if you never need it, there is a death benefit that is associated with it that then gets passed on to your beneficiaries. So the new kind of asset based long term care planning kind of covers all of the objections to your traditional long term care, right? I don't want it because I'm paying, I pay and I pay, amd if I don't need it, I, you know, have this feeling that I lost out on my opportunity cost of having it invested. But if you need it, it's gonna be there, and it's not something now where it's a use or lose it. You're gonna use it in in one way either during your lifetime or when you pass.

Sondra Ziegler (50:32)

Okay. So that's a very powerful strategy. And like you say, it's not a if you don't use it, you don't I mean, if you don't use it, you lose it proposition in that case. So any other strategies you want to talk about in the alignment part of your process?

Morgan Marx (50:51)

Yeah. I think it's really important to also address for those that are in it, that feel like, you know, maybe we don't have an option, you still have options. We do still have long term care options that are available to people that are currently in a care journey. Your options get more limited, but that doesn't mean that they're not worth exploring, especially if it means, you know, conserving, you know, your legacy that may be important to you, or if it means being able to get into a facility of your choice versus being that choice being taken away by using some form of government plan. So I do just want to say that even if you are in a crisis, or you already have a diagnosis, that doesn't mean that you don't have options. But you may not have as many as in a pre planning scenario. So important.

Sondra Ziegler (51:57)

So moving on to your fourth step in your four step framework in how you work with clients. So we talked about awareness, creating awareness and understanding your options in the place that you wanna retire and doing the assessment as step number two in finding out you're gonna do the fact finding. Find out what does the asset picture look like, what resources do you have, what income, what do you own, how is it owned, And how could it be leveraged or used along with other things to help pay for long term care? Can you self fund? If not, what are the other good options, whether that's traditional long term care insurance or these new hybrid type of plans that allow you to fund both a death benefit and long term care if you need it. And then you talked about alignment, just, you know, understanding and identifying what your goals are, what the client's goals are, where they would want to receive care, and what's going to be the best path forward to paying for that. So then tell us about the action step. What comes next then, now that they've done all that work?

Morgan Marx (53:05)

So now that you've done the work, and we've identified which route feels best, the next thing is actually putting it into action. And so part of our process is no matter which route you decide to go, you're going to get a roadmap and an implementation guide. And you can set that up with whoever you choose to do it with. But with some of these plans, because they are health underwritten or financially underwritten, next step is to actually do the application because it's never even though we can plan all we want to, ultimately, the insurance companies or the financial companies are the ones that decide if you qualify for their plan. And so the next step is actually putting into, you know, action, doing an application, seeing if we get a yes. We work with a number of different companies in order to actually shop it for you. And so we will, you know, send your anonymous information out to a multitude of different insurance companies or financial companies, and we'll then assess what is the best option for you. And so we also like to have any, any kids that want to be involved. Let's get them involved in the conversation. Make sure that they're aware. Do you know who to call in the event that mom or dad needs care? Or even the spouse. Maybe the spouse has never been a part of these conversations. Let's bring them in and have them be a part of these conversations. So the action plan really sets forward, what are the steps that you need to take? Now that you did all this work, what are the steps that you need to take in order to actually implement it? And then identifying who needs to know about it, right? And we can help facilitate those family conversations that whoever your caregiver is going to be, that we know who that person is, what your wishes are, that's clearly communicated to your family, friends, loved ones, and whoever your care manager is going to be, that they receive a letter of instruction, and we call it a letter of instruction to your future care manager. And it essentially says, what plans are in place in the event that these things happen? What plans are in place? And who do I call? So it is just a one page thing that we give to them that says, in the event that something happens to Mr. or Mrs. Smith, give us a call. Here's our number. Here's our contact information. Here's the plans that they have set up. Because then they aren't having to wonder which fund to go sell or, you know, where these funds are at in order to pay for care. They know exactly who to go to and where to turn when, if and when that care journey does present itself.

Sondra Ziegler (56:26)

That is so powerful. And I wish every family who has to walk through a care journey had that in place. So if one of our listeners out there decides it's time for me to reach out and begin this process, what's the best way for them to do that with y'all?

Morgan Marx (56:48)

So they can go out to our website. It's heritagewealthalliance.com. There's a little schedule here button in the top right hand corner that they can click and schedule their complimentary FIT meeting. Or also in the show notes, we'll provide a link that they can schedule a consultation with us.

Sondra Ziegler (57:10)

Okay, great. Well, today we talked about what it really takes to move from crisis to clarity. And that's what I love about the planning that you do and how you coordinate with the legal work that we do for our clients, it becomes a holistic path forward, a holistic plan for a journey that can give families confidence and take away the anxiety and reduce stress at a time when decisions are already gonna be hard enough. With the right planning, care journeys don't have to feel chaotic and overwhelming. And so that's our message today. A care journey can be navigated with confidence and with clarity. And if you're out there though listening and you feel like you're already in the crisis and you think it's too late to plan, I want you to hear me say this clearly, it is not too late to get the help that you need. Give us a call, visit our website, request an appointment, give Morgan a call. You can still give the, or go to our show notes and click their link, because you can still get the holistic planning that's coordinated that your family needs to make it through this journey and do the very best you can for your loved one, for their care, and also in protecting what they've spent their life working for. So thank you again for joining us for this episode of Second Half Conversations. If you found this helpful, please consider sharing it with someone who might need it. If they're in the middle of a storm, they could very much benefit from this information. Most families face these decisions unexpectedly and could really use the information that we shared today. So thank you again for joining us and let us help you plan for peace of mind in the second half of life. Mindy, Talia, Morgan, thank you so much for what you shared with our clients today and for what you do every day for ours, our clients, your clients, and our shared clients. We appreciate you. A quick reminder that today's conversation is for educational purposes only. It is not meant to be legal advice because to give you legal advice, we need to meet with you and know your specific situation. Thanks again for joining us today for this conversation and remember to make the second half the best half.