Long Term Care Insurance and Wealth

Why would those wealthy enough to "self-insure" against long term care expenses consider purchasing an insurance product? Simplistically, society trains us to expect that "medical expenses" are paid through insurance plans. Just because someone can afford to pay the bill out of pocket doesn't mean she wouldn't prefer to have the bill paid out of the insurance company's pocket.

A more sophisticated answer requires an analysis of the relative efficiency of deploying capital to fund premiums versus other options; as this article from Private Wealth magazine discusses. 


A Planning Tool
Given the availability and flexibility of today’s products, it’s hard to argue against making LTC insurance a part of an affluent client’s financial plan. Take the case of a wealthy client with more than $50 million in assets who purchased LTC insurance for himself and his spouse. He insures a $10 million home, a $2 million boat, $1 million in jewelry, $1 million in art and $500,000 in cars. He came to the conclusion that the potential need for long-term care was another risk that merited coverage. In fact, out of all his insurance policies, he believes he is most likely to use the benefits of his LTC policy.

A Great Looking Site!

Take a look at the website for Engaged Legacies --- it practically reeks of stratospheric levels of wealth.

Here's one of their cool graphics:

Here's a key question on their Contact Us page:

Do you have at least three (3) clients with assets over $5,000,000 or at least one (1) client with assets over $10,000,000? *

Greycourt - Pittsburgh, Houston, Portland

Greycourt is a premier provider of financial advisory services to wealthy families and select endowments. They have what look like some interesting white papers - primarily related to money management / investment analysis ...


Some that may be of interest include:

• Family Investment Partnerships
  Many wealthy families are familiar with family limited partnerships used to discount the value of intra-family gifts. But limited partnerships can also be used as investment vehicles, and this strategy offers many advantages. This white paper discusses family investment partnerships, which represent a kind of private, family “mutual fund” for family members and other family units such as trusts or foundations.
  
• Taming Your Trust
  When families consider the prospect of having to establish appropriate provisions in trust instruments for spouses, children or future generations, they naturally approach the matter with trepidation. There is, first of all, the problem of attempting today to design provisions that must work well many years, perhaps many decades, into the future. There is the further problem of dealing with intra-family emotions and stresses that tend to interfere with otherwise good judgment. Finally, there is a natural tendency to be intimidated by the legal and tax complexity that appears to surround the arcane world of trusts.
  
• Philanthropy in Estate Planning: Balancing Charity against Personal Spending Needs
  Many wealthy clients have philanthropic goals, but few receive sufficient guidance regarding how best to balance these goals against personal spending needs. Deciding how to distribute wealth can be a complicated and often emotional process. As a result, investment advisors need to understand their clients’ wealth-distribution preferences and must help quantify potential investment risks associated with different levels and forms of gifting. By helping identify who bears residual investment risk under varying gifting regimes, investment advisors can ensure that their clients’ wealth is distributed in a way that fits their client’s individual, family, and philanthropic ambitions.
  
• Establishing a Family Office: A Few Basics
  Many families who have experienced a significant liquidity event will consider setting up a family office. The purpose of this white paper is to discuss the reasons families consider establishing an office, to describe the typical duties of such offices and to suggest a basic framework for designing and setting up a successful family office.
  

Laird Norton Tyee - Wealth Management for Family Business

At Laird Norton Tyee, we are fascinated by family businesses. We were founded more than 40 years ago to serve members of the Laird and Norton families, owners of the Laird Norton Company, a family business now in its seventh generation. We understand family business because our history is family business. To this day, the majority of our clients remain tied to family businesses of their own. We admire the tenacity and ingenuity of these business leaders and families and the commitment they have made to create their own futures.


Laird Norton Tyee authored and present a very interesting resource called Northwest Family Business Survey 2008.