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Estate Tax Relief And Long-Term Care
Just because estate tax exemptions were restored doesn’ t mean long-term-care planning gets easy. By Cathy Sikorski
AFTER FACING THE THREAT THAT MORE OF THEIR wealth could have been caught in the net of estate taxes, your wealthy clients likely recently breathed a big sigh of relief. The One Big Beautiful Bill Act not only preserved larger exemptions for how much wealth can pass through free of estate taxes— but those exemptions are also set to rise from the current $ 13.61 million dollar level.
Could there be any downside to this good news? In fact, there is. Just ask those of us who work in the long-term-care space. To us, the large exemptions, even though they might seem like a golden ticket, could actually give many clients a false sense of comfort— and even foster denial— about what they are going to need for long-term-care planning, and this denial could affect their financial advisors, too.
That’ s because the biggest problems with long-term care haven’ t gone away: Those include the skyrocketing cost of care, the lack of available paid caregivers, the loss of income a client could experience after living longer, the reduced benefits, the insecurity of Social Security and the stressed savings of family caregivers( not to mention the declining health of those family caregivers).
Advisors and clients often come up with familiar answers to these problems:“ My clients can self-fund.”“ My client thinks long-term-care policies are too expensive.”“ My client doesn’ t want to talk about it.” And they’ ve likely gained more confidence knowing that a preserved estate tax exemption will allow them to hang onto one, two, three, even four million more dollars. So they think that if anything happens to their health, they can selfinsure and they’ re fine.
They aren’ t fine. And it’ s your responsibility as their advisor— your duty as a fiduciary— to tell them this. You have got to let them know all the problems, and every problem angle I noted earlier. Trust me here. I’ ve seen it. Your clients will come back to you and say:“ Why did you never talk to me about this?” Even if you did, once or twice.
WWW. FA-MAG. COM SEPTEMBER 2025 | FINANCIAL ADVISOR MAGAZINE | 31