Many families avoid discussing money. It’s not an easy topic to talk about. And I am certainly not a professional financial advisor, nor do I claim to be either one. No, I am an ordinary woman coming from the place as a family caregiver whose life was turned upside down due to losing a job, having to qualify my mother for Medicaid when she was running out of money, and initially having no legal authority to do so. (She had originally given someone else that authority.)
What I do know is if you are guiding your senior loved one who is still sound enough of mind to manage their finances, making financial decisions on their behalf, or responsible for any part of their financial or legal world, you will run into legal and financial red tape. You could also find yourself in a very difficult situation if you are not on top of it from the beginning.
There are enough surprises in eldercare without having to deal with money and legal issues. This matter is not something on which to ever scrimp. I would encourage you to not go online and print a generic document you think will suffice. Get professional guidance from someone who fully understands the laws of your state! PLEASE meet with an estate-planning attorney that also practices Elder Law.
It’s important up front to determine your loved one’s financial circumstance. In addition, it’s important for you to determine your legal level of authority. This includes handling your parent’s financial management, should they become incompetent or managing their health decisions, should they become incapacitated.
The attorney and/or financial expert can examine your parent’s financial picture, review their assets, and work with other care professionals. This will give you the full picture of your loved one’s financial and legal portfolio and their ability to fund their later life care. In addition, they should be able to inform you of your responsibilities as a whole.
There are several reasons why.
- Fully learn and understand what the legal and financial picture is for your aging parent. This must be an individualized evaluation. A lot depends upon their health, their care needs and their longevity, as best as can be predicted. Factors and decisions such as if they own a home, if they are staying there, etc. will affect how their assets are used, and ultimately protected for as long as possible.
- You need to understand fully what your legal responsibility is as a Power of Attorney or “Attorney in Fact.” If your parent is not competent to make financial decisions on their own, the documents you hold make you an “officer” of the courts of your state.
- If your parent outlives their money, (more likely than not) there will need to be steps taken to assure they can easily transition to Medicaid.
- There may be funding options available to them of which you may not be aware. Is your parent a veteran? Did they work for a railroad? There might be additional benefits available.
- Protecting and maximizing your parent’s assets for as long as possible is another important responsibility. Check with an estate-planning attorney to understand the types of investments that they may have in their portfolio, if they are still invested in appropriate ways, given their circumstance, and if needed, what the process is to liquidate them, in the case of an emergency. Sometimes accounts have not been reviewed in a very long time. This is also important because managing their assets also protects and manages your own.
Hope for the Best, but Plan for the Worst
It only takes a devastating accident like a fall and your loved ones’ assets can be completely depleted, or even worse, you could also go down with the ship if your name is attached to anything that they own.
Your greatest protection as a family is putting safeguards in place to ease the burden of their assets being attached if illness or accidents cause their lives to spin out of control. When an emergency happens, the last thing you want to do is be in the dark about their financial and legal matters.
Other Considerations:
Healthcare Supplemental Insurance
I cannot emphasize enough how important it is for your parent to invest in a supplemental health insurance policy to offset the high cost of medical care. It only takes one stay in a rehab facility and if they are not well enough to be discharged when their Medicare coverage stops paying (after 100 days), their assets will begin to dissipate, one day at a time, to the tune of thousands of dollars.
Long Term Care Insurance
If they have Long Term Care Insurance, make sure you check with a professional financial and/or legal advisor as to the extent of their coverage. If they purchased it years ago, there may need to be some revisions to their estate plan to compensate for this.
Life Insurance
Today there are numerous forms of Life Insurance policies that include a Long-Term Care benefit. Check with your carrier to see if your policy includes it.
Have Family Conversations about Money Up Front
Yes, money is a difficult topic, but it must be addressed. Having everyone on the same page is the goal, and also giving everyone a full understanding of the future care plan and options can help you all work together easier as key decisions need to be made.
