Caring for your aging parents is something you hope you can handle when the time comes, but this task can leave you overwhelmed, concerned and/or confused. Whether the time is now or sometime down the road, there are steps that you can take to make your life (and theirs) a little easier. [Please note that although this article regularly refers to the reader having two living parents, the concepts also apply should you have just one living parent.]
Mom? Dad? We need to talk
The first step you need to take is to speak with your parents. Find out what their needs and wishes are. In some cases, however, they may be unwilling or unable to talk about their future. This can happen for a number of reasons, including:
- Fear of becoming dependent
- Resentment toward you for interfering
- Reluctance to burden you with their problems
If such is the case with your parents, you may need to do as much planning as you can without them. If their safety or health is in danger, however, you may need to step in as caregiver. The bottom line is that there needs to be a plan.
Here are some key items that you should discuss with your parents:
- Long-term care insurance: Do they have it? If not, can/should they buy it?
- Living arrangements: Can they still live alone, or is it time to explore other options?
- Driving: Is it safe for them to continue to drive?
- Medical care decisions: What are their wishes, and who will carry them out?
- Financial planning: How are they managing their income and expenses?
- Estate planning: Do they have all of the necessary legal documents (e.g., wills, powers of attorney, trusts)? How can their assets be protected?
- Expectations: What do you expect from your parents, and what do they expect from you?
Preparing a personal data record
Once you’ve opened the lines of communication, your next step is to help your parents prepare a personal data record. This document lists information that will be needed in case your parents become incapacitated or upon their death. Here’s some information that should be included:
- Financial information: Assets, debts, income and expenses
- Important personal information: Social security numbers, passwords for on-line accounts
- Location of important records: Access to safe-deposit boxes and file cabinets
- Legal information: Wills, durable powers of attorney, health-care directives, trusts
- Insurance information: Company names, policy numbers, beneficiary designations
- Medical information: Health-care providers, medication, medical history
- Funeral and burial plans: Prepayment information, final wishes
- Advisor information: Names and phone numbers of professional service providers
The personal data record should include the location of documents and account numbers. It’s a good idea for you to make copies of all documents and keep them in a safe place. This is especially important if you live far away, because you’ll want the information readily available in the event of an emergency.
Evaluating your parents’ abilities
If you are uncertain about your parents’ mental or physical capabilities, ask their doctor(s) to recommend a facility for a geriatric assessment. These assessments can be done at hospitals or clinics. The evaluation determines your parents’ capabilities for day-to-day activities (e.g., cooking, housework, personal hygiene, taking medications, making phone calls). You and your parents will then receive advice regarding care options and references to organizations that provide support.
If you can’t be there to care for your parents, or if you just need some guidance to oversee your parents’ care, a geriatric care manager (GCM) can also help. Typically, GCMs are nurses or social workers with experience in geriatric care. They can assess your parents’ ability to live on their own, coordinate round-the-clock care if necessary, or recommend home health care and other agencies that can help your parents remain independent.
Where will your parents live?
Where your parents live will depend on how healthy they are. As they grow older, their health may deteriorate so much that they can no longer live on their own. At this point, you may need to find them in-home health care or health care within a retirement community or nursing home. Another option might be for them to move in with you, but you’ll want to give this decision serious thought because it will impact your entire family. Talk about it as a family first. Also important is how your parents’ living arrangements will be funded. Will they be using their own resources? Do they have long-term care insurance? Do they qualify for Medicaid? Will you and/or other family members be contributing towards the cost of their care?
Get support and advice
Many local and national caregiver support groups and community services are available to help you cope with caring for your aging parents. If you don’t know where to find help, contact your state’s department of eldercare services. (Rhode Island; Massachusetts; Connecticut). Also, it is important to work with a team of professional advisors. This team should include an attorney who concentrates in estate planning and elder law, a financial advisor/planner, a CPA or tax advisor, and a geriatric care manager. This team should work together to integrate your parents’ financial, estate, tax, and health care planning. Each advisor will be able to focus on his/her area of expertise, while maintaining an understanding of the “big picture.” It is important that these advisors communicate with you, your parents, and each other to ensure they all have the relevant information and are working towards the same goal.
Plan for yourself as well
Caring for your aging parents may become a financial burden for you, depending upon how well off your parents are and how much caring for them costs. Increasing numbers of adults are finding themselves in the “sandwich generation.” They face having to pay expenses of growing children (including college expenses), plan for their own retirement, and support their aging parents financially. Thus, it’s important to plan not only your parent’s finances, but your own as well.
Federal income tax law provides several tax benefits to you if you are supporting your parents financially. If you have a dependent care account at work, you can put pretax dollars into the account that can be used to pay for some costs associated with caring for your dependent parents. You may be able to claim an exemption for your parents as dependents, and you may be entitled to claim a dependent care credit. In addition, you may be able to file your taxes as head of household and deduct medical expenses you pay for your parents. For more information, consult your CPA or tax advisor.
How can we help?
We understand, both professionally and personally, the needs and concerns of an aging population and the family members who care for them. It can be hard discussing aging and “what if” scenarios, yet the benefits of planning ahead are compelling. We are here to provide advice and guidance; we work together with our clients to build a trusted relationship.
For more information, please contact Richard J. Petrucci, Jr., JD, CPA, CFP® (Rick) at 401-699-0251.