As the Baby Boomer generation ages, a growing number of them face decisions around long-term care needs for themselves or their parents. This presents an opportunity for CPAs to have important family wealth-planning conversations. By proactively discussing potential home caregiver requirements, you can position your firm as a trusted advisor while identifying clients who may need support transferring assets or updating estate plans.
The Caregiving Conversation Helps Uncover Wealth Transfer Needs
According to a study by the National Alliance for Caregiving, around 34.2 million Americans have provided unpaid care to an adult over age 50 in the last 12 months. For many Baby Boomers, either serving as a caregiver themselves or requiring assistance from paid in-home care is on the horizon.
Opening a dialogue around this sensitive topic shows you understand the comprehensive financial and family impacts of caregiving decisions. Discussion points may include: Whether aging parents have long-term care insurance or plan for paid home care; whether siblings or other family can provide unpaid personal care assistance; modifying the family home or seniors' residence for mobility and accessibility; costs of home health aides, companions, skilled nursing visits; care management and coordination across multiple providers, and more.
Having this conversation accomplishes two things. First, you demonstrate a sincere interest in your client's overall well-being beyond just investment management and tax advice. Secondly, you can identify clients who may soon need to transfer assets, update powers of attorney, or engage in Medicaid planning to cover eldercare costs.
Suggest Professional Home Caregiver Support
For Boomer clients unable to be their own caregiver or lacking nearby family assistance, suggest investigating professional home care options. Reputable agencies can provide varied levels of in-home support, from companionship and transportation to skilled nursing and live-in care. A growing trend for many families is to directly hire caregivers for loved ones through registries that meet their needs, saving money in the process.
However, be aware that directly hiring an individual nanny, home health aide or other caregiver creates "'nanny tax"' compliance obligations. As a household employer, your clients would have to comply with household employment laws, meet the FICA tax and federal and state unemployment tax obligations, potentially provide workers' compensation insurance, and meet wage, hour, and employment regulation requirements. This is where you as their CPA can guide clients through complicated household employee tax rules.
No matter how you advise on the caregiving process, initiating this conversation strengthens your relationship as a knowledgeable advisor on important transitional life events. It provides insights into clients' potential future estate, tax, and financial planning needs.
Be Prepared With Resources and Referrals
To make the most of these care discussions, assemble some helpful resources ahead of time. These may include:
• Local home care agency referrals and guidelines for vetting providers
• Contact information for aging life care managers or care coordinators
• Overview of tax requirements for directly hired caregivers
• Medicare expert to explain coverage limits
• Household payroll and tax compliance firm recommendations
Having these types of resources demonstrates your level of preparedness and commitment to holistic financial care for clients. It also elevates your role as a central source of information.
The aging Baby Boomer population represents both a challenge and an opportunity for CPAs to define their value. By discussing long-term care realities like in-home assistance upfront, you strengthen client relationships and position your firm for future wealth transfer and tax planning engagements.
HomeWork Solutions is here to help. We have a library of household employment resources that you can leverage and stand ready to help your clients. Talk to us about how we can help with your client conversations.