Tales from the Wallet: Eldercare and Finances

36 Comments

1. One thing I cannot stress enough is to have a conversation with your parents about who their executors and Powers of Attorney are.
   So many times people name their adult children, jointly, or two or more other joint executors and it is a NIGHTMARE.
   I have a family where the 3 adult children are POAs and they HATED each other, and suspected the worst of each other. It’s been a few years now and it is getting better (at first they thought the one child hand-picked me I guess), but it is also a total pain to get any paperwork signed since the 3 kids don’t live in the same city.
   I had another situation where the POAs were the adult daughter (flaky) and a friend (total control freak and not so nice person). Who disagreed with each other about EVERYTHING.
   The POAs/executors, if you are naming joint ones, need to a) get along and b) have similar attitudes about money managment etc.
   You don’t have to name all the kids “to be fair”. Being a POA for finances or an executor is a lot of work.

2. I have a disabled spouse, so a little different take, but I can chime in.

   – If you end up caregiving, and a huge percentage of people do, expect caregiving to be time-consuming, incredibly draining, incredibly expensive, and not often talked about. It may change your career path. It may drain finances. It will put huge strains on you. It will reveal huge interpersonal challenges even for the most prepared. It’s the toughest thing I’ve ever done.
   – Get LT disability insurance. You’re far more likely to need this for your family at an early age than life insurance. Pay for it yourself – if your company pays the premiums, the eventual income is taxed, which puts a huge dent in an already decreased amount. If you pay, it’s not taxed (I believe).
   – Meet with an eldercare attorney and make sure they’re competent. This can be a landmine, and from what’s I’ve seen from others in my situation, it’s very easy to get bad advice that can have huge costs.
   – Lobby for better alternatives. The state of elder/disabled care in the US is abominable. Much like healthcare, one emergency can bankrupt even a wealthy family. Get involved in protecting the programs that are out there and enhancing them. Also, let your employers know what’s going on. Many people try to muscle through privately – the more that caregiving work is brought into the light/open, the better things can get for everyone.

   1. Just for clarity (and to endorse the recommendation) on disability insurance premiums- if you pay them with after tax income (so, not a pre-tax deduction, but can still be a paycheck deduction, if you have that option) then the resulting pay out is not taxed as income.

   2. I cannot agree with everything here more. My mother passed a few months ago after an illness of several years. That my parents had long term care insurance was a life-saver – it paid for round the clock aides which took a huge burden off my father. (This type of care would cost nearly $200k/year out of pocket.) I’m young and healthy and I bought long term care insurance for myself when I saw how great it was.

      It’s also SO important for caregivers to take care of themselves. It’s exhausting physically, emotionally, and mentally. Find a support group. See a therapist. Make time to see friends, do things you enjoy.

      We also had a fantastic geriatric care manager who helped us to navigate a lot of the things we had to deal with.

      If parents want to age in place (stay in their homes) there are all sorts of contractors who will help to modify their home to make it safer and easier for them to stay there. Also, look for a “senior village” in their neighborhood – many neighborhoods are developing community groups that help seniors to stay at home, organize social activities, and provide volunteer visitors and help with home maintenance.

      1. I think there is something important in what you’ve said – do not wait until you are retired, or your senior years are just around the corner, before purchasing LT Care Insurance. My parents waited until they were retirement age, and it was no longer affordable. Now they are without coverage in the event they need long-term care.

         It is the first policy I’m buying once my school loans are paid off and I have some disposable income.

3. I would love to hear from anyone else who has dealt with ostrich-mentality parents or in-laws. My ILs are essentially one crisis away from being completely destitute. They stretch their SS checks as best they can, but from what I can tell they have no retirement savings. My FIL is in declining health and has already had two heart attacks. Their house is worth very little and has decades of deferred maintenance. When my husband tries to talk to them, they cut him off at the pass and just tell him not to worry.

   My family has always been open about money and transparent about planning for the worst-case scenario. I’m terrified that in this case, the worst case is my ILs becoming homeless or needing round-the-clock care that we are not in a position to provide. Any guidance?

   1. Mine are similar, except a little younger and not in such a risky situation. I’m having issues with them just constantly spending money, including on my failure to launch younger brother, instead of saving for retirement. They also just tell me not to worry, but I fear their lack of planning and preparation now will affect me and my finances down the road.

      1. I could have written that – this is us with my ILs! Nice to know we’re not alone.

         1. Same boat. Inlaws are completely underwater in an extremely expensive home. Unemployed. Running through retirement that was small to begin with and is now nearly gone. House has been on the market for 4 years and hasn’t sold (and MIL is a realtor – albeit a terrible one – so that makes it hard to be able to give constructive advice such as yes, curb appeal matters). STILL have no concept of a budget, how much comes in vs how much goes out. Failure to launch child still living at home and living off same retirement.

            The sh*t is going to hit the fan, and soon.

            As a positive, however, my husband and I have had some serious money conversations and are more committed than ever to being smart and on the same page financially.

   2. If you think it’s likely that they will need financial help from you, can you go ahead and start setting aside some amount of money on a regular basis? You don’t have to tell them about it, but it may give you comfort that it will be there if needed (and you can use it if you need to later).

   3. You are describing my situation to a tee. I have learned that to not make decisions is actually making decisions. You can’t “make” adults have these conversations, although it really is in everyone’s best interest to do so. Understand that the sh*t WILL hit the fan, eventuality, and the mess will have to be sorted out at that time. It will be ugly. It will be expensive. It will possibly tear what remains of the family apart. But nothing you can do now can affect what will happen then because of this ostrich mentality. It is who they are (very selfish and stupid in my opinion), and they know what they are doing. You must learn to accept that this is out of your control and that worrying about it will not change them or their decision to not decide. The mess will happen and you’ll have to clean it up. The end.

   4. It sounds like your IL’s are retired, so it’s not clear to me how they can change their financial situation at this point? It may be that if they need round the clock care, they will have to rely upon Medicaid. There are some public sources of information (or you can consult with an elder care attorney) who can advise on Medicaid eligibility. Basically, you have to “spend down” your assets, although in some situations the one spouse can keep the house and a certain amount of money from SS, as well as create a burial fund. The remaining assets would have to go to pay for the long term care. That’s a gross simplification, and some of it is state specific, but you can find some resources on the Web if you are concerned.

   5. Yay! This is very topical for everyone who has parent’s who are elderley, or getting there. My situeation is a littel different. My dad made alot of money behind the iron curtain so he has made provision for him and mom to be taken care of by someone OTHER THEN Rosa and me. He also bought long term care insurance (from a reputeable carrier he says), that ensure’s that he will NEVER have to fund a hospital bill OR a nursing home — which he says are bad. He also investigated and is considering moving to Costa Rica once he is over 71 1/2, so that he does NOT have to start taking minimum distribution’s out of his IRA/401K or whatever, and he says can live like the King of Siam with housekeepers and maid’s and caretakers for his home, all for a fixed price of $4000 per month (which barley cover’s my coop fees and morgage!, here in NYC that is). FOOEY!

      So in my case, his challenge to ME is to do what he does in 35 years or so when I get to 70. I told him that I already have an IRA and a 401K, but NOT a Roth IRA b/c I make to much for that. I will consider buying health insurance (Obamacare) when I am over 65, and mabye if it work’s out for dad, buy into the Costa Rica deal –tho Im sure it will be MORE THEN $4000 / month in 35 years or so. FOOEY! But if I get MARRIED, I will NOT have to worry about any of this stuff. I will just leave it to my HUSBAND to figure out for BOTH of us! That is why I realy wish I was MARRIED now, like Rosa, b/c she does NOT have to even think about any of this stuff. Ed does all the thinking for BOTH of them — and their kid’s!!!! YAY!!!!!

   6. I was a later-in-life baby and have this fear about my mother – she is actively not doing anything to prepare for retirement, besides maybe what she got from my dad in the divorce. She barely makes it in the day-to-day – last year she asked for my Christmas bonus (yeah, I was a broke grad student working for a nonprofit at the time). And I am not/will not be in a place to financially support or provide for her for years as I hoof off my student loan debt. My younger brother is going to be heading to medical school next fall, more than likely on a Navy scholarship (!! so proud of him) so I can’t imagine he is any more poised to do this. I just don’t know what will come of it, and our relationship is tenuous at best as it is.

      My dad is good I think. Remarried, just bought a new house, DINK/kids out of the nest and adulting.

   7. I had an ostrich parent who had a stroke, followed by cardiac arrest 2.5 years later. Another worst-case scenario is a sudden early death.

      1. I hate to tell you this, but sudden early death is the opposite of the worst-case scenario…

      2. To the lots of very good advice here, I would just add (speaking from the trenches at the moment) that when and if parents/grandparents downsize, be sure they don’t downsize into a place that is too small for a caretaker. My parents bought a one-bedroom condo in a senior citizens’ complex, and while it was great for years while they were able to live independently, once they were no longer able to care for themselves without help they had to move because there was no room for a caretaker. The lesson: they should have bought at least a two-bedroom so they could have stayed in their own home longer.

         1. Damn that was supposed to be at the bottom of the thread…

   8. There’s not much that they can do now to get more money, but they can plan. Find an elder law attorney (preferably NAELA) who can walk you through the ways to protect assets if one spouse is healthy and the other becomes disabled. Take the time *now* to understand eligibility for food stamps, electric, housing, heat, etc. Money is fungible. The government won’t give them a new roof for their house, but can give them a few hundred a month for food stamps and help with their heating… which then frees up money to fix a roof.

      Once *you* understand the various things that can be done at this point – and what can’t – then you can both talk to your in-laws. And repeat what a poster above said: no decision IS a decision – and it’s usually the worst one.

4. We haven’t been through this entirely with our parents yet, but we have with Grandparents, Great Aunts and family friends, so it has sparked a lot of conversations (and a lot of lessons learned).

   Things we have learned:
   -Financial POA and Medical POA can be 2 different people – and in many cases it is best if they are, so no one can accuse the person making medical decisions of doing it for financial gain. You can also have various levels of POA, so it isn’t just “now I can make all the decisions for you and you have no say, elderly person” which is what my grandparents feared.
   -Get POAs put in place early, because it is much harder once the person no longer has the mental capacity to sign for him/herself. Not a lawyer, but I’m pretty sure they can be written so that they only take effect if X,Y or Z happen.
   -Discuss wishes beyond the best case scenario. Yes, ideally many of us would like to stay in our own homes until we die peacefully in bed. But the Plan A ideal isn’t always feasible, so talk about what Plans B, C and D look like. Is it more important to age at home, and have a visiting nurse? Would you rather move to a really nice nursing home with all the bells and whistles, but that is further from home? Or would you rather go to the one in the town you currently live it (or kids currently live in) so you can have visitors more often, even if it doesn’t have all the same extra ammenities.
   -At most of the facilities around us, the level of care does not change once a loved one runs out of money and switches over to full Medicare and Medicaid. So if your loved one is in a nursing home, don’t scrimp on buying them the things they need (comfortable chairs, clothing, bedding, etc) in order to make a few more months of payments to the nursing home.
   -The rules as to what consitutes Medicare/Medicaid eligibility have been changing, and will continue to change. Same with estate taxes. For instance, we had to put someone into a care facility at the end of one calendar year. At that time, he didn’t qualify for Medicaid because he had too many assets – but the rules were changing, and he qualified as of January 1 since his assets were below $Y (I believe in that case we then had a year to sell his house and run down his assets, as opposed to the previous year when he just had to be below $X in assets to qualify). So ask detailed questions, especially if you have a complicated situation like one spouse that needs care while the other will remain in the home.
   -FYI, one of the things you can do to spend down money (in order to qualify for Medicaid or just to do it while the money is still available) is pre-pay for a funeral and all the associated costs.

   Also, tour some nursing homes and assisted living facilities before ruling them out. Yes, some are not pleasant. But some of them are super luxe – I wouldn’t mind living somewhere where they do my laundry, vacuum my apartment, cook delicious meals for me, and have free swimming and exercise classes, etc etc. I joke with my husband that I’d go live in the senior community in our town right now if they’d have me!

   But all this has been much easier when we’ve been the support person for our parents, who are dealing with the day to day details with grandparents. We are now having to have the really tough conversations with our parents as situations come up, like “is it time to sell the family home and move to a one story house?” and “are you really sure you can afford to retire in X years, knowing that your mother and all her sisters lived to be 95+, do you have enough money for 30 years?”

5. This post has really hit home for me. I want to help people avoid the last few years of my life if at all possible (bear with me it might get a little lengthy).

   I had a pretty decent job track in DC, was just about to leap up into the higher salaries of my field when I came back to my hometown to visit my grandmother during Thanksgiving in 2011. Long story short, my granny has been saying she’s dying for most of my life, but this time I saw her and could see the drastic change in her appearance. She asked (again) if I would move back to help her out because she was told she only had another year or so left. I moved back, left my career, sold all my furninture, and moved in with her in January 2012. I had not lived in that city for 11 years.

   To make a VERY long story short, I had no idea what I was in for- a laundry list of health problems topped off with pretty severe dementia. The home (where she has always had Pomeranians for as long as I can remember) reeked of dog and was full of old people stuff (you know what I mean!) so my asthma and allergies nearly killed me. Not having a job, I worked part time at various places trying to a) not be a total bum and b) financially help around the house because as far as I knew she was broke. Netted $17K BEFORE taxes doing that. Her health got worse and the crazy incidents because of her dememtia made living there unbearable. Not to mention feeling down about not being able to socialize and date and be a “young profesh” like all of my friends were doing. Whenever she went to the hospital (which was often because she ate too much salt and refused to take her medicines) I would pull nurses and doctors to the side to explain what was happening at home and ask for help– they usually just said “oh that’s how old people are” or would act as if I was making up everything (example: the time I had to call the police to help me bring her in from the 30 degree weather where she was outside yelling for her long deceased brother in a silk nightgown).

   Eventually I had enough and based on some advice from the local agency on aging petitioned to get guardianship of her and her affairs (by then I had a ft job but was (and am) making 40% of what I was before and was paying for all of her bills because she could no longer write checks)That was a heart wrenching experience because I think she felt like I was trying to rob her. That’s when I also learned she had nearly $150K in various banks left in trust to me and that most likely I wouldn’t see any of it ever. Sure enough, she ended up in a nursing home the last year of her life (she kept falling and refused to let nurses into the home during the work day) That sucked up probably 90% of the money (and they are still trying to get more!), with the rest going to lawyers. The house is in her and her dead brother’s name so there are multiple layers of legal foolishness with that, so I may end up homeless if this does not work in my favor.

   It’s been a total mess the last 3.5 years, and while I’m slowly getting things together now that she recently passed (at age 92), I can’t help but feel I was punished for trying to do the right thing. Outside of the money (which would have paid off ALL of my student loans and the car I was eventually able to buy and then some!) and freedom late 20 somethings/early 30 somethings, I had to make a lot of stressful and difficult decisions ALL BECAUSE SHE DID NOT HAVE HER AFFAIRS IN ORDER! PLEASE get long term care insurance! PLEASE have your very elderly people learn how to protect their assets to make sure the intended recipients get them. and PLEASE avoid nursing homes if at all possible!

   1. I am so sorry you went through that, but I don’t understand why your final statement was to avoid nursing homes if at all possible. Are you saying that you wish you had that $150K for yourself now instead of paying for your grandmothers care at the end, when in home care wasn’t working? What would you have rather done? I think in your case it probably would have been better if you had been able to get her into a nursing home earlier so you could have found a full time job and a place to live and sold her house, and let someone else who was trained deal with the difficult stuff like the dementia so that you could have focused on just being her granddaughter, not her full-time caregiver and only person in her life making these decisions.

      I wish you had been able to get help sooner, and I’m so sorry for your situation.

      1. I’m saying to avoid nursing homes because my experience was completely terrible. She was admitted to the home after her last stint in the hospital because she wasn’t sick enough to stay there, but not well enough to go home, and after years of being in and out of the ER her doctors recommended she stay for a few months to regain her strength. Fine. Few months go by, and then we start getting letters that an application for welfare benefits had been submitted. Long story short, the home had my grandmother sign paperwork first to try and get welfare benefits (which even if we needed, she wouldn’t have qualified) and then sign a waiver rejecting additional financial services that are given to EVERY patient in our state regardless of income, thereby putting her at a private care rate. The problem with all of this? She was not legally competent to sign them, and the home had had the court documetns stating this for at least two months before having her sign. It caused a big brou ha ha that took several months to work out, all while they charged her account for the highest level of personalized care (which she was not recieveing- she didn’t need help bathing, feeding herself, going to the bathroom, etc) I tried several times to work with them to reverse the charges that only incurred because of their actions, but eventually had to hire an attorney. While the nursing staff was awesome and I liked that she was able to socialize and make new friends before she passed, the administration was (and still is!) a nightmare. She could have recieved the same level of care with an in home nurse (that I could have let into the home) for less money, or gone to pretty much any other nursing home in the city (I tried to move her but by the time another home had space she was close to the end anyway). Trying to check her out to take her home was a mess because they always managed to “lose” the paperwork releasing her, and I couldn’t just roll her out to my car becuase I was told I’d get the police called on me. When I say I’m still battling this place, it is not just me being bitter. I literally am still in litigation about the business practices of this home. As far as the money, while I don’t feel badly about spending it on her care, it also doesn’t make me a selfish or bad person to be at least a LITTLE disappointed to know that while she had worked to save up a inheritance for her only grandkid, poor planning in other areas undid that. Also, maybe the part about me still not being sure of what’s going to happen to me and the house i live in and have lived in for years slipped by you- another matter she never got in order. My whole point is that while yes, my situation is a bit extreme it isn’t unique, and if all it takes is to have your parent or grandparent get long term care insurance to avoid having to deal with all of this, I suggest you do it!

6. Sort of related, and sorry if someone has addressed this already: my grandmother is suffering from some dementia and my dad, her sole caretaker, is having a difficult time dealing with it, both in the emotional well-being sense as well as the “I don’t know what to do” sense. She refuses medical attention and so she doesn’t even have a diagnosis, but clearly, something is off. Does anyone have recommended resources for adults caring for their aging parents who have dementia? Thanks in advance.

   1. Look at this website. This is the best resource.

      http://www.alz.org/

      Find the local chapter in your Dad’s town. Find out if there is a support group, and your Dad should go… explain the situation… and the advice should come.

      There are advocates you can call at the Alzheimer’s association Helpline who can also direct him.

      Does she have a primary care doctor that she likes, and listens to? If so, now is time for Dad to give this doctor a call and giver him/her a head’s up regarding his concerns. Then he should try to accompany her to the doctor’s appointment.

      1. Thank you. I will scour the site and direct my dad to the Helpline. Hopefully we can find a support group for him.

         I am sure my grandmother has a primary care physician, but it is a matter of coaxing her to go. I’m honestly not sure of the last time she’s seen a doctor as a preventative or yearly check-in measure, but I like your idea. I will follow up with my dad on this.

         Thanks again.

7. I need this advice too, except that it is my father caring for my mother and things are just spinning out of control.

8. Nolo Press has a good series of books for non- lawyers. Get It Together is a good starting place, explaining the basic planning tools and providing some practical suggestions as well.

9. Have the caretaker take notes on the symptoms, gather information on all current medications, and take the symptomatic person to a specialist who can assess the cause. In SF, the UCSF Memory and Aging Center did a detailed evaluation and diagnosis, assessing and ruling out side effects from other medications and undiagnosed depression (not uncommon in the aging). With a diagnosis, the caretaker will learn a lot about what to expect and then can plan.

10. Lot’s of good advice here. A couple of more thoughts.

    Look at a range of facilities, if they are available to you, to understand the types of care available and what they mean (e.g., assisted living, continuing care retirement community, etc) and whether they include benevolence care.

    People talk a lot about how you have to set boundaries with your kids. No one ever tells you that you might have to set boundaries with your parents or other relatives when you are involved in their elder care decisions.

    1. And by the way, it’s harder to set boundaries with aging parents – an adult is assumed to be competent to make their own decisions, while you ultimately get to make decisions for kids and they have to abide by them.

11. As President of the National Academy of Elder Law Attorneys (NAELA), which has 4500 members nationwide, I applaud Kat for addressing this very important topic and thank Bridget for suggesting that readers and their families consult an elder law attorney through NAELA. You can find an elder law attorney in your community by going to http://www.naela.org. While it is always preferable to plan for long term care before a crisis hits, elder law attorneys often engage in crisis planning and can advise on various options to finance long term care, including Medicaid, veterans benefits and long term care insurance.

12. I’m gonna chime in with the probably unpopular opinion that taking care of your aging parents is a choice you have and can make. My parents and I don’t have a good relationship and never have, they aren’t saving for retirement, they’re spending beyond their means, and they refuse to talk to me about any of these things or set themselves straight. I am sure that when the time comes that they need (both financial and emotional) help, they’ll come to me, but my plan is to do as little as I can get away with. They’ve dug themselves this hole, they don’t even like me very much, and I’m not going to bail them out of it.

    So there’s always that option. Just wanted to toss it out there that taking care of aging parents is a choice you make, not a requirement.

13. Though it’s not specifically on the topic of finances, Atul Gawande’s Being Mortal should be required reading for anyone dealing with aging parents or grandparents, or getting older ourselves.

14. Here’s a good guide (with lots of resources) on avoiding elder financial exploitation: http://files.consumerfinance.gov/f/201306_cfpb_msoa-participant-guide.pdf

15. Oh! And once you have the conversation with your parents, True Link https://www.truelinkfinancial.com/true-link-card is a pre-paid debit card where you can have a more active role than just monitoring finances. Haven’t used, but very interesting.

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