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Financial preparedness for your parent’s long term care

Estate planning

Many families today are torn apart and stressed over a multitude of questions when it comes to caring for a senior parent. When care is needed for an elderly or disabled loved one, we are faced with difficult decisions. Should we provide that care ourselves, or do we hire someone to do it? Maybe it’s a combination of both.

Given today’s economical times, family and financial demands and overwhelming responsibilities that families face today, one of the most important is finances. If you hire someone, do your senior parents being cared for have a benefit such as long-term care insurance or is he or she eligible for some form of government benefit?

Families need to come together and understand that there are many factors in caring for a senior parent. If one sibling or family member becomes the caregiver, families need to understand that there are personal sacrifices and costs involved in them providing the care for their parent. Even if Mom or Dad go to a care facility, there are still costs associated with loss of work in times of caring for your parent over a multitude of situations. There are also personal sacrifices that will be made. The caregiver will be faced with life changing decisions and in finding their voice, they will become the primary advocate for their parent.

Families must face difficult decisions, but for the most part, the majority of them will have to be made by the caregiver. Recent statistics show that the number of American adults who have become caregivers for an older family member has increased from 30 percent in 2010 to close to 40 percent today.

What is the cost of caregiving?

Two of the most common effects are poor health from the stress of being a caregiver and poor financial health. These include overwhelming statistics that show that caregivers experience high blood pressure, heart disease, depression, chemical dependency and obesity at more than twice the national average. Their health issues are probably a given when you consider the physical and emotional challenges of providing services that even professional caregivers find stressful.

But the financial effects can have an even longer-lasting effect. While there are some laws that are designed to protect caregivers who are trying to assist a family member such as the Family and Medical Leave Act, they don’t necessarily apply to all employers. Most of these Acts require the employer to have a certain number of employees so a smaller business may not offer that benefit to its workers. And, an employee will usually have to work for the employer for a minimum period of time before taking advantage of the benefits provided by the Acts, and may only take a limited number of days each year.

Statistics show that these issues apply mostly to women. But even more surprising is that the women who are in the role of caregiver also have a job, even while spending an average of 20 hours a week forgive years as a caregiver. If the caregiver eventually leaves her job, statistics from a 2011 study show that she will lose about $325,000 over that period, as well as benefits from her employer. And with the average age of these women being 49 years old, the chances of reentering the workforce at the same level may be slim. In addition to losing income, the caregiver’s family may end up footing the bill for many of the expenses required to care for the loved one.

There are things that can be done with previous planning that can help. Prevention is key. Have you sought out whether your parent has access to veteran’s benefits, long-term care insurance an arrangement through a special needs trust? There may be other remedies that may be proposed by an estate planning or elder care attorney. Also, Mom and Dad’s financial resources are gone because they have to be spent before being eligible for help like Medicaid, if there is a spouse of the loved one, that leaves little for him or her to have for living expenses going forward.

When considering options like Medicare, Medicaid and long-term care insurance, it is important to be aware of what these options cover and, more importantly, what they don’t. For example, Medicare generally does not cover in-home care. Medicaid does, but only in limited circumstances involving very low income or other financial resources. Most long-term care policies do cover in-hone care, but choosing that option can be more expensive than policies that do not.

It is critical to seek out what the long-term care plan is for your senior parent. Yes, it is an important part of our culture to care for them, and it should be, but planning is key to eliminate many of the issues that face the caregiver.

Consulting an Elder Law attorney with experience in estate planning or Medicaid planning may be beneficial in helping identify possible solutions, preferably before they are needed. Even if you haven’t done so and the need arises, there are solutions.

No matter what your role is in taking care of your parent, strive to work together as a family. Don’t leave the caregiver alone to bear the burden on her own. Take the time to do your part, and see that the financial plan is in place, not only for your parent, but for your family caregiver as well.


By Stephen M. Waltar, PS. We are an estate and elder law planning law firm in Seattle & Bellevue, WA, whose mission is to provide families with quality estate and Medicaid planning resources. When you visit or call our office, we want you to feel comfortable discussing such an important issue concerning both you and your family. We want to arm you with the information you need to make informed decisions about your family’s future. Email him at info@waltar.com.