Money is not a pleasant topic to talk about, nor am I an expert. What I do know is that if you are helping your senior loved one, making financial decisions on their behalf, or responsible for any part of their financial or legal world, this is not the time to skimp and not meet with legal counsel.
There are enough surprises in eldercare without having to deal with money and legal issues to bite you. Being educated by an attorney and/or financial expert to give you the full picture of your loved one’s financial and legal portfolio, and your responsibility as a whole is important.
There are several reasons why.
- You need to understand fully, what the legal and financial picture is for your aging parent. This is truly an individual evaluation. A lot depends upon their health, their care needs and the likely longevity of the rest of their life. If they own a home, if they are staying there, etc. ALL of these decisions can effect 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, there will need to be steps taken to assure they can easily transition to Medicaid
- There may be funding options available to them that you may not be aware of. Was your father a veteran? There might be benefits available that your parents can take advantage of.
- To protect your parent’s assets for as long as possible. Check with an Estate Planning attorney to understand the types of investments that they may have in their portfolio, and if needed, what the process is to liquidate them, in the case of an emergency.
When an emergency happens, the last thing you want to do is be in the dark about financial and legal matters.
Money Management
If you are a full time or even part time caregiver for your parent, there will be times that you will be spending money on their behalf. According to numerous studies, family caregivers spend over $5,000 per year, out of pocket, for direct caregiving expenses. This includes groceries, clothing, gas, parking, medications, entertainment and numerous day-to-day expenses that go on in the course of caring for a senior loved one.
As a family, I do not believe it’s fair that the caregiver should have to shoulder all these expenses, especially if the caregiver and the senior loved one lives somewhere else.
Let’s face it. Money issues can be the root of a lot of dissention between family members. It can tear them apart. It’s a very personal issue and if the financial responsibility falls on the shoulders of one sibling, it can build up a huge amount of resentment between family members.
When I was caregiving my mother after she ran out of money, I was responsible for all of her incidentals. Every trip to the grocery store, likely I spent $30-$40 in items for her: Denture Cream, Tylenol, Candy Bars, Incontinence Supplies, Band Aids, Mints, socks, clothes, shoes, groceries, etc. It all adds up! That doesn’t even address the expenses that happen in parking, gas, and for those who are working, in many cases, loss of pay to take a loved one to doctor appointments.
The Caregiver Account:
I fully believe one key step needs to take place. A separate checking account should be opened that serves the purpose of caregiving costs. I also believe that ALL family members should contribute into the account, so that the family caregiver doesn’t have to bear these expenses alone. Even if you contribute $50 a month to it, it is a lot better for everyone to take the edge off of the caregiver when his/her bank statement arrives and shows hundreds of dollars being gone shouldering the expense of caring for their loved one.
The beauty of a Caregiver Account is three fold:
- You can give access to all family members paying into the account. It’s easy to deposit money from anywhere by anyone
- It gives complete transparency of financial transactions that are involved in caring for a loved one
- It provides a smoother transition, if your parent needs to qualify for Medicaid. Money isn’t intermingled with yours, and as such, the records are clean between all of you.
There is nothing that builds up resentment more than money. Families can ease the stress immensely by working together and sharing the financial load of caring for a senior loved one.
Even if your senior parent’s assets are plentiful, it’s still important to keep caregiving expenses separate from their own bank accounts.
Cutting Corners can be Costly:
It is always in our best interest to save money when we can, and it’s natural to think of creative ways to do so. In the case of eldercare however, it’s not so easy.
Mary put an ad in Craigslist to help her mom out a couple days per week at home. Mom was “ok” but she still needed help in her daily living activities, like bathing, dressing, and light housekeeping, shopping, etc. After all, why pay high hourly rates for a professional home care provider when you can find someone directly?
After numerous people applied for the job, “Angela” was hired! Mom really liked her, and she was half the price of those “expensive” home care companies. Angela took mom to doctor appointments. She took her shopping, and would help her with her morning rituals like bathing, dressing, etc.
It all seemed to be going fine until one day Mary got a call from Angela. “I can’t come into work today and likely for awhile. While I was getting your mom into the shower she slipped and I protected her from falling, but it threw my back out. I am in severe pain and will have to have back surgery!”
Now Mary was desperate to find someone new to help, but what was ahead was even worse. About two weeks later, her doorbell rang. It was a process server suing both her mother AND her for medical expenses!
Lawsuits, whether you win or lose are costly. Even though there wasn’t a “formal” agreement between them, there was enough of a paper trail that Mary paid Angela, that held her liable for the injury that resulted.
Did Mary check to see if Angela was “license, bonded or insured”? Obviously she didn’t. She didn’t think about the ramifications that would result if she hired someone who wasn’t.
Sally also used Craigslist to help her father with some daily errands and cooking meals three days per week. She hired Diane, and her father, who had a little bit of dementia built up an attraction to her. After awhile Dad treated Diane like his “girlfriend.” Of course, the family just shrugged it off, and as long as it made Dad happy, it was “harmless” or so they thought.
One day Sally noted that numerous card transactions had been purchased that she has no idea about. Over several weeks she noticed that close to $9,400 had been charged, which included jewelry, cash withdrawals, department stores, etc. She also saw that there were charges made in the neighborhood that Diane lives in on days that Diane was not with her dad! She realized that Dad had just simply given over the card to Diane.
Had Mary used an agency, these things would have been closely monitored, and rest assured, her father wouldn’t be in a situation like this.
In the world today, there are a lot of ways to find people to do work for you. There is social media- where now even Facebook has job postings. We are likely familiar with Craigslist, and of course, there is LinkedIn, the Internet, and many other types of job boards.
The risk you take in saving a few bucks, in my opinion, is not worth it by any means. Your parents’ physical, financial, and emotional protection is not worth it. Don’t cut corners like this. ALWAYS go with a professional agency that is licensed, bonded and insured.
In closing, we know that the challenge on how to fund long term care is a daunting one but please be mindful! Seek out the right eldercare professionals who can help you. Don’t try to go it alone. It will often be one of your greatest regrets.
