When Caregivers Need Care: Planning for Aging Parents
They may not admit it, and you may not like to think about it, but your parents could one day need help to care for themselves. Many people approaching that age resist the idea of relying on others. In a 2016 report by Fidelity Investments, 93% of surveyed parents did not want to be financially dependent on their offspring. Yet it’s important to help mom and dad understand that being proactive will help them maintain control of their assets, lifestyle, and what happens if they are ever unable to speak for themselves.
Parents are not the only ones who may benefit from foresight. The financial strain of caring for your parents may derail your budget, affect lifetime earnings, and possibly undermine your own retirement plans. According to the U.S. Department of Health and Human Services, nursing homes cost an average of $7,698 a month nationally for a private room. If you take time off to care for them yourself, you not only lose out on wages in the present but face unpredictable market conditions when you return to the workforce. If it is not too late for your parents to qualify, consider looking into long-term care insurance. The additional monthly expense may be worth the relief of knowing senior care will not bankrupt you down the line.
Whether your parents have significant assets to pass on, consider retaining an estate lawyer who can help with more than just a will. In fact, they may suggest establishing a living trust, which precludes the need for a grueling (and public) probate period after death. The trust can also be written to account for events of mental incapacitation and designate someone to manage your parents’ finances while they are still alive.
If your folks are incapable of making sound financial decisions now, it may be time to discuss handing over power of attorney to children or a trusted advisor. This can be the most difficult conversation of all. Parents who are used to their autonomy may resist attempts to wrest control of assets they have worked their entire lives to build. Remind them there are people in the world who prey on the elderly, whose judgment may be impaired by prescription drugs, age, or other factors. Relinquishing control may actually help protect their assets for use while your parents are alive, or to pass onto family after they pass.
The first step to putting together a comprehensive blueprint for your parents’ future is analyzing their and your financial situations. This fact-finding mission should include gathering information about all their accounts, including assets, investments, benefits, and bills. You should also review current insurance policies, and explore other options for benefits such as Medicare.
If you have siblings, it is vital to coordinate with them about sharing responsibility. Besides living arrangements, you should discuss financial burden, management of their estate, and how decisions will be made going forward. Your parents may want to designate separate power of attorney for health care and financial decisions to different children.
It’s easy to procrastinate planning, especially when the topic is unpleasant to think about. Yet, things can change in a heartbeat. If your parents’ situation takes an unexpected turn, you will be glad to know their future is accounted for. It’s especially important to plan ahead if your parents are at risk for, or have, any neurodegenerative diseases such as dementia, Alzheimer’s or Lou Gehrig’s. If their medical or financial position is prohibitively complicated, consider engaging the services of a geriatric care manager. Having an experienced professional to help determine the best course of care for your parents can ease stress on both you and your kin.
While financial decisions may take priority, it’s equally important to figure out not just how your parents will leave this world, but how they continue to live in it. Ask your parents how they want to spend their retirement years. They may harbor dreams of travel, spending more time with grandchildren, or even starting a business. They may also prefer to remain independent as long as possible. In that case, you should mutually decide on a point when intervention is needed. Rather than fighting them on what you think is appropriate, help your parents put together a plan that allows them to achieve their goals while giving you peace of mind.