One of the main challenges faced by adult children in planning for the parent’s future is getting the parent to take action, including overcoming feelings of a loss of independence and other misconceptions. The second challenge is in organizing and managing finances. The third challenge is determining how to pay for care when the parent’s income does not cover it.
Step 1: The Adult Child Needs to Have Some Degree of Control, or Ability to Control in the Future
In most situations, it’s very easy to talk to a parent about getting a power of attorney or a trust done so that upon the parents’ incapacity or diminishing capacity; upon request by parent, the child can take over all the financial management with minimal fuss using a durable power of attorney, designation of healthcare surrogate, and maybe even a revocable trust. Simple statements like, “You know you need to get this done, let’s do it!” Or “Remember that disaster that ‘So and so’s’ family experienced whether their mom died, do you want us to go through that?” Or “if you do not take care of your legal documents, you could end up in a guardianship and I heard the legal fees can exceed $20,000 or more!”GOT QUESTIONS… JUST CLICK HERE!
When dealing with private or stubborn parents, it can be difficult to set up a framework that gives a caregiver control of the ability to pay bills, managed investments, and make financial and medical decisions. It may take time, multiple family members and advisors to consistent educate the elderly parent about the problems that occur without prior planning. Now, if a parent is unreasonably stubborn and does not have capacity or control over their finances, then the caregiver may need to seek guardianship as a final option to gain authority to act on behalf of the mentally incapacitated parent.
Step 2: The Adult Child Needs to Understand the Financial Picture and Establish a System
When it comes to organizing and managing finances, some parents only have a house or a savings account, which simplifies things for the children who are in charge. However, some parents may have their financials arranged through multiple investments, annuities, life insurance policies, and retirement accounts, and the child or children may not have the time or financial knowledge necessary to handle everything. Sometimes caregivers are left in a fog as to how things are being managed, either because the finances were disorganized or because there was a lack of full disclosure. Getting your parent to walk you through all their financials (assets and investment decisions, debts, income, and monthly expenses) saves the caregiver a massive amount of time and stress.
Step 3: The Adult Child Needs to Learn How to Make the Money Last When Getting Care for the Aging Parent
If a parent’s assets or income are insufficient to fully cover the costs of their needs, then the caregiver will need to identify other sources of benefits, such as VA benefits, Medicaid and long or short-term care insurance. In many cases, the aging parent’s assets may be insufficient to immediately qualify for these programs or these programs are to time-consuming and difficult to navigate, and you’ll need to enlist the aid of an elder law attorney.