In addition to estate planning and financial planning, advisors now need to add a long term care plan to the services they offer their clients, according to Carolyn McClanahan, a CFP and physician in Jacksonville, Florida.

That’s because waiting until a client becomes elderly often leads family members to make bad decisions under duress while a long term care plan written in advance can define the logistics and provide a smoother transition into old age.

“People are spending a lot of money because they are too reactive,” Dr. McClanahan told Financial Advisor about why she advocates for creating a long term care plan. “They aren’t thinking about what aging will look like.”

Dr. McClanahan told a roomful of financial advisors in attendance at the FPA Metro New York 20th Annual Forum Agenda yesterday at Convene on 3rd Avenue in Manhattan that a long term care plan is best packaged as an adjunct to an estate plan.

“You can't ever predict the unknown unknowns,” she said following her speech. “The key is creating a culture of transparency within the family, which will make them more resilient around those unknown unknowns.”

According to Dr. McClanahan, the processes to a long term care plan include four components:

No. 1: Living transitions. Living transitions involve helping clients decide whether they will age in place at home until they die, or move into a dementia proof, age friendly home, an assisted living facility, a continuing care retirement community or a multigenerational community.

“Social isolation is a huge factor in aging and technology, such as an internet camera, is how the elderly stay safe aging at home,” said McClanahan, director of financial planning with Life Planning Partners.  “Home maintenance is typically dumped on relatives nearby, which is why family agreements are important to prevent feuds.”

No. 2: Driving transitions. Driving transitions can be a topic of conversation more easily broached by recommending a driver safety course, such as AARP’s Smart Driver. Driving tests can determine whether an older client is unsafe at the wheel due to medication or visibility, for example, according to McClanahan. 

“One of the perks of passing the AARP test is getting a reduction in your car insurance payment,” McClanahan said. “But when a client is no longer able to drive, the long term care plan details what their transportation options are.”

For example, adult children often employ car service such as Uber, Lyft and GoGoGrandparent, which can create a transportation plan for older individuals.
“GoGoGrandparent is more expensive but more personable,” she said.

No. 3: Financial caretaking transitions. Because there’s not a lot of good professional help to take over when clients begin to experience cognitive decline, McClanahan suggests that advisors look into becoming professional bill payers by joining the American Association of Daily Money Managers or refer to Lutheran Social Services professional bill paying service.

“This is a big career field because there’s more and more older people who will need help with daily money management,” she said. “The more people you have looking in on the situation, the less likely someone will take advantage.”

Regardless of wealth or assets, McClanahan recommends downsizing financially to one house, one savings account, one checking account, one Ira Roth taxable account and three credit cards. “The first credit card is used for bill paying because it's so much easier to fix credit card fraud than it is debit card or checking account fraud,” she said. The second is used for outside shopping and the third credit card is for people who love to buy things on the internet.

No. 4: Healthcare decision-making transitions. Although it is not a legal document, McClanahan  requires clients to complete and sign a quality of life agreement.

“These agreements document what is important to you around quality of life when you have a specific health situation, which is in addition to legal advance directives,” she said.