Baby Boomers are now or soon will be part of the senior generation.

If they have enjoyed a rich or comfortable lifestyle, they likely expect this to continue in retirement. Due to medical advances, they can expect to live longer than previous generations.

But given their accustomed lifestyle, the increased cost of living, low interest rates and recent lack of significant growth to their investment accounts, they may be starting to worry that they will outlive their money. Shrinking retirement accounts may even be causing some of them to delay retirement.

Baby Boomers who have grown accustomed to middle to high income levels often have not thought about the costs associated with the care, lifestyle and housing options they will require during their retirement years. Such costs are not covered by medical insurance and Social Security. As a result, Baby Boomers may soon find themselves in need of a reality check. If they do not take the time now to put together a well thought out plan that ensures they will have put enough of their wealth aside for private in-home care or senior living, they may be sorry later. Long-term health care options must be an integral part of an overall financial plan for Baby Boomers who want to maintain their desired standard of living and provide for a surviving spouse or significant other.

With your assistance, Baby Boomers can be guided through various options toward the quality of care they desire by creating a plan that will lift the burden from a spouse, significant other, or adult child during a crisis or stressful life event.

Adequate Funds and “Quality” Care

Baby Boomers who have worked so hard to accumulate wealth in investment and retirement accounts typically have two main goals. The first is making certain their funds do not run out during their own lifetime (and during that of a surviving spouse or significant other). The second is to retain sufficient funds to provide quality long-term care if needed for themselves and a spouse or significant other.

[IMGCAP(2)]What does “quality long-term care” mean? Baby Boomers typically say they do not want to live in a nursing home, preferring in-home care or senior living. As their CPA, you should be aware that while the costs of these two options have risen sharply—now running $200,000 to $250,000 per year—medical insurance does not cover them.

Long-term care policies can thus provide some much-needed relief. However, premiums are often subject to increase, and your clients may not have purchased enough to cover escalating costs, or may not be eligible for a long-term care policy due to their existing health condition. There are new options for long-term care policies that allow the return of principal or include life insurance protection, so encourage your clients to discuss these options with you and their estate planning attorney to see if any of these new options are right for their situation.

It takes careful advance planning to factor the cost of in-home care providers or senior living into an integrated estate, retirement and life care plan. Proper planning allows Baby Boomers to address many concerns about long-term care. For example, what if they or a loved one were stricken with a long-term illness, or died prematurely? Will the surviving spouse or significant other:

•    have enough money to continue his/her comfortable lifestyle?
•    spend down his/her money without adequately providing for his/her own long-term care?
•    spend down hard-earned money to cover their own or the spouse’s long-term care, leaving little or no money for children and grandchildren?

Practical Solutions

To be sure that your Baby Boomer clients are adequately set up to handle future long-term care needs, walk them through the following steps in consultation with their team of “trusted advisors” (which should include a life care management specialist, an estate planning attorney, certified financial advisor and you, their CPA).

First, engage a life care management specialist, who can explain the differences in costs and advantages/disadvantages of private in-home care and senior living. As their needs change over time, the life care management specialist will help your clients make the necessary adjustments to ensure their safety and quality of life.

Conduct a full investment/insurance review to ensure that your client’s investment and insurance portfolios are structured in a manner that will optimize their ability to afford quality living and care options. Having an estate planning attorney work directly with a long-term care management specialist, as well as an investment, life and long-term care insurance advisor, will likely result in a plan that provides a client with the best care possible, while significantly reducing the costs associated with long-term care.

Review and update the estate plan. The new federal estate tax laws, enacted on Dec. 17, 2010, provide planning opportunities to save taxes through successive generations. For example, an individual may now make tax-free gifts of up to $5 million.

Create an asset protection trust for a spouse, significant other, children or grandchildren. These trusts may be designed to not only be tax-efficient, but also provide liquidity for loved ones on an “as-needed” basis while protecting hard-earned money from creditors and spouses in the event of divorce.

Your Baby Boomer clients are the core of today’s “sandwich generation.” Most have provided well for their children’s upbringing and taken on the financial burdens of college tuitions. Now they look forward to active, financially secure senior years where they can enjoy their adult children, grandchildren and a comfortable lifestyle.

They note the challenges their aging parents have faced, and they fear spending their own advanced years in an institutional nursing home. But via the functioning of a competent team, your Baby Boomer clients’ fears can be lessened and this gloomy fate avoided. With your help and proper advance planning, you can be the lynchpin that helps them do it.

Jay M. Pabian is a managing partner at Pabian & Russell, a boutique estate, tax and business planning firm. He has more than 20 years of experience as an estate planning attorney and CPA providing sophisticated, yet practical, legal and tax advice and representation to his clients. His particular areas of concentration include wills and trusts, tax, estate and wealth preservation planning, asset protection planning, business succession planning, and estate and trust administration. Jessica Weisner Enners, LICSW, is a life care management specialist at Boston-based Pabian & Russell LLC, where she develops quality-of-life care management and life care programs for seniors and disabled adults. She received her Master of Social Work from Simmons College in 2003. Prior to joining Pabian & Russell, she provided care management services to geriatric and disabled adults in the greater Boston area. For more information, visit or contact Jessica Enners or Jay Pabian at (617) 951-3100 or

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