Centurions of Your Assets

iStock_000022989637XSmallOne of the most rewarding parts of our careers at HMC Partners is that we are able to establish relationships with our clients that last for lifetimes. One of hardest aspects of being in the asset management business is we get to grow old with our clients. Growing older with you means we get to see some of the happiest moments in your life including college graduations, weddings, golden anniversaries, the birth of grandchildren and getting to admire you enjoying the fruits of you labor. Pictures of your travels and vacations with your children and grandchildren adorn our company bulletin board. However as we all know, the hour glass of life means we are all headed to inevitable finiteness. I do not manage my parent’s assets for many reasons mainly to insure as much family tranquility as possible. You’ve never met my sister! So years ago, I interviewed a wonderful Memphis, Tennessee firm on their behalf, and they have been well cared for. Earlier this week, my father sent me a proposal from that firm for Long-Term Care Insurance that if he can qualify medically for, I highly recommended.

It reminded me that we need to continue to persuade and cajole our clients and friends about the necessities of this coverage. I am not a huge proponent of life insurance for clients with less than $3.5M of assets beyond the age when debts and income need to be protected. Folks with assets over $3.5M might have estate tax issues warranting life insurance used to help beneficiaries pay those taxes. Others usually have outgrown the need for this type of coverage.

I feel much differently about Long-Term Care Insurance (LTCi). Statistics show that 63% of our population will need LTCi at some point. Those same statistics show that most households are not prepared to pay the $30,000 to $60,000 annual assisted living facility costs even though the sheer size of this generation represents an unprecedented purchase power in American history. Older adults, 50 and above, control over 80% of the nation's assets which exceeds $7 trillion and represent 12.7% of the population. Seven in ten Alzheimer’s patients live with a family member versus in an assisted living facility while living 8-20 years after being diagnosed. While modern medicine has increased our lifespans, it has not increased our quality of life.

We have witnessed countless numbers of our clients aged 50-70 take care of their parents at great expense. Loving children making sure their parents have all they need in their last few years while adding on to their homes, hiring people to help around the house, and putting their lives on hold until their parents have departed. Many of these clients have used their personal assets to ensure the best for their parents. Beside the strain on their assets, there is also tremendous physical and mental strain on them.

Don’t do the same thing to your kids and most importantly, don’t risk having your kids in charge of your late in life health. I’d hate to think what kind of care my kids might provide…ever see National Lampoon’s “Vacation”? I don’t want to be Aunt Edna riding on the luggage rack in the rain with a tarp tied around me.

In most cases, premiums for LTCi are a very small percentage of your overall assets. We recommend you look into purchasing this type of coverage. HMC Partners is licensed to sell this type of insurance, however we choose not to. We’d rather experts in this field design the correct policy for you while we devote our time to the management of your assets. Contact us to receive more information and a referral. As the advisor and Centurion of your assets, we want to conserve what you have worked a lifetime to accumulate.