James Sullivan
James Sullivan
Who Will Provide Care?

There is more to long-term-care planning than just cost.

July 21, 2011
by James Sullivan CPA, PFS LIC

In Gail Sheehy’s 2010 book Passages in Caregiving: Turning Chaos Into Confidence, she wonders who would respond to this help wanted advertisement:

Untrained family member or friend to act as advocate, researcher, care manager and emotional support for a parent or spouse, sibling or friend, who has been diagnosed with a serious illness or chronic disability. Duties: Make medical decisions, negotiate with insurance companies or Medicare; pay bills; legal work; personal care and entertainment in hospital and rehab. Aftercare at home; Substitute for skilled nurse if injections, IV, oxygen, wound care or tube feedings are required. Long-term care: Medication management, showering, toileting, lifting, transporting, etc. Hours: On demand. Salary and benefits: Zero.

It is estimated that almost 10 million adult children over the age of 50 care for aging parents. A June 2011 study by the MetLife Mature Market Institute, the National Alliance for Caregiving and the Center for Long-Term-Care Research and Policy at New York Medical College found that the average cost to an unpaid adult child caregiver of providing care in terms of lost wages and benefits (including pension) and Social Security is very high. For women it is $324,044; for males it is $303,880. For both the adult child caregiver and the spouse caregiver there is additional cost in terms of stress and the impact on their overall physical and mental health.
The need for care is clear. As fewer boomers die of cancer or heart disease, more will live long enough to die of “frailty” or what Dr. Joanne Lynn refers to in her book, Sick to Death and Not Going to Take It Anymore, as the “prolonged dwindling” to the end of life when care will be needed for many years.

But who will provide the care? Parents often don’t realize that their lack of planning for long-term care (LTC) shifts the costs and burdens of their care to their adult children, but the harsh reality is that it does. And if family members or friends are not available to provide care, they will have to rely on paid caregivers, which may be problematic in coming years.

Planning With the Who in Mind Not Just the How

In addition to the financial concerns of LTC planning, clients should think about who will be providing the care not just how the care will be paid for. The low fertility rate among baby boomers means fewer adult-children caregivers. Fewer individuals must share the costs and burdens. If the children live in different parts of the country, is it realistic to expect them to be able to provide care? And, of course, many boomers decided not to marry or if married not to have children and will have to rely on friends and extended family members for care — but is this realistic?

In addition, the state of the economy may be a factor. Nervousness about job loss may make it more difficult for adult children to find time to provide care. It is estimated that since 2009, one in six caregivers have lost their job. Finding a new job is difficult enough without having concerns about fitting in care giving.

What about paid caregivers? The cost of paid care giving is likely to become more expensive as the number of professional caregivers decreases at the same time demand increases. The overall cost of a caregiver will increase whether paid directly for home care or indirectly for care at a skilled nursing facility. Consider this little discussed fact:

The primary care giving age is between age 50 and 64. The primary age for needing care is age 85 and older. In 1990, there were 24 potential caregivers for every person age 85 and older. In 2030, when the oldest baby boomers reach age 85, there will only be six potential caregivers for every person age 85 and older.

Planning From the Caregiver’s Perspective

When the CPA planner is encouraging their clients to plan for LTC, the first question should be: Who will provide the needed care and not how will the care be paid for? Who do they envision providing this care? If it is their spouse or partner — what if he or she also has health problems? What if the well spouse dies before the ill spouse, which is not unusual. What about the adult children? Do they have young children that would make it especially burdensome to be the caregiver? Do they live in the area? Does your married adult daughter or son have an ill in-law who already requires their time and attention? Does the adult child have health problems of their own? And perhaps more importantly, can they afford the financial cost that care giving imposes?

Putting the issue of who will provide the care in such a concrete manner often motivates the client to do more detailed planning. Once the who question is answered, the client may be more motivated to answer the how question: Can the potential costs be self funded? If sufficient assets are unavailable for self-funding the risk, should LTC insurance be considered? This may be either a traditional insurance policy or a combination policy that adds a LTC insurance rider to a life insurance policy or annuity.


Encourage clients to think about LTC planning from the family caregiver’s perspective. Clients can gain a better understanding of what long term care costs the caregiver by reading two excellent books on the topic:

  • Jane Gross’ A Bittersweet Season Caring for Our Aging Parents — and Ourselves
  • Gaily Sheehy’s Passages in Caregiving: Turning Chaos Into Confidence

Both are compelling stories of the emotional toll that care giving imposes. While most family caregivers take on the burden willingly and as their last act of love for their spouse or parent, proper planning can make the job much less imposing.

As Sheehy writes:

“Only in retrospect did I wonder why we hadn’t talked about the inevitable: growing older. How might we face the assaults of body and mind? Who would take care of whom? (emphasis added) How would we pay for it? Americans tend to wait until we are too old and too sick to have decent, affordable choices for care in our golden (or rusted-out) years. Planning ahead is preferable — if you can face it. If you can’t, you risk plunging into confusion in full crisis mode.”

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James Sullivan, CPA, PFS, works with his wife, Janet, who is an elder law attorney in Naperville, Illinois.

* PFP Section members, including PFS credential holders will benefit from additional Eldercare resources in Forefield Advisor on the AICPA’s PFP website at aicpa.org/pfp. Non-members can click here to join the section.