Financial Planning: Strategies for Caregivers and Their Parents

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Gail was surprised, but also relieved, when her father, then age 64, told her that as part of his legal and financial planning, he had put in place a durable power of attorney and advance care directives. Now at 78, her father suffers from the early stages of Alzheimer's disease. Having the foresight to make arrangements years ago is saving the family both emotional and financial distress.

It's a scenario that Certified Financial Planner Larry Botzman, CRPC and board member of the Financial Planners of America, sees often. Sadly, many families are not as prepared as Gail's.

"What's at risk is the adult children's inheritance," Botzman says. "If the parents' life savings goes toward paying for a nursing home, there is nothing left to leave the children – which can be heartbreaking for the parents."

The lesson here for caregivers is to start planning now for your own future care. Research by the University of Kentucky's College of Human Environmental Services found that only 40 percent of people thought a lot about retirement. A full 77 percent said they felt they were saving too little and poorly prepared for their own retirement.

The study also suggests the caregiving experience brings heightened awareness about the need of one's own retirement and is a time in which many caregivers need exposure to and guidance toward retirement planning activities and information.

 
 

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Westy2100

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Apr 1, 2008

One of the things that I disagree with is that so many people are concerned about leaving an inheritance for their children and do not want to pay for a nursing home. I think this is very wrong. The money that they earned and saved was for their older age and to being taken for care. Many people then end up on medicare (welfare if you will) and we end up paying more in for their care. I am very frustrated because my brother's children have taken over almost all of his $500,000 estate. He will need to go into a nursing home as they will not want to care for him much longer. Two of his children went to an attorney and told them what they wanted and the attorney wrote up everything and did not talk to my brother. He already had Alzheimers and had lost his wife a few months prior in an accident when they came to him asking for things. He had NO ONE to talk to him and did not fully understand what was happening. He signed the papers when asked if he understood and he said yes. Any one, particularly the attorney should have known that he did not understand. Not much I can do about it at this point as he will be going to a veterans home that is 50 miles away and I won't be able to visit him muchand they only go back one year to take things. SO they made sure they got things done as soon as they could.think what makes it harder for me is that I am a retired social and familiar with the things that happen. Thanks for a chance to unload my frustration.

 
 

BryanWisda

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Apr 3, 2008

Westy2100,

Did your brother's children utilize the attorney to "spend down" his net worth to qualify your brother for Medicaid? Was their intent to get the money NOW or was it the children's intent to avoid having to waste the $500,000 on a nursing home?

Bryan Wisda

 
 

195Austin

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Sep 15, 2008

Isn't there a look back period so when a person is placed a 5-7 yr. time period is checked to prevent this from happening- would it not be great if they had to return the money they tricked him out of having for his needs.

 
 

Cat

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Sep 15, 2008

Its funny how we allow these "Trust Advisors" to market to the seniors who are so gullible and do move all of their assest into a trust to qualify for Medi-caid - - They learn the sad truth after the fact. I am sick to death of hearing people complain about "wasting" inheritance on care - - the truth is that it is not YOUR money - it is the senior who earned it. On a professional level I have seen people drive up in new mercedes - very excited that their parents Medi-caid pending status was approved. That is why there is now an elder abuse task force that focuses on financial and fiduciary abuse. And why look back periods and regulations are being changed.

On a personal level I have seen how ugly people can become when money enters the mix - you never know, people can surprise you. The whole concept invented by created "trust attorneys' is ripe for abuse by family members and others who do not have the seniors best interests at heart. "Spending down" net worth was designed for a different purpose than is being used today.

All of those who are truly caring for a relative - Kudos to you. All of those who can't wait to get their hands on the money - Boo to you. All of us taxpayers foot the bill for Medi-caid programs and will probably not have the same access to programs that were designed for the truly needy.

 
 

Rosie03

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Oct 9, 2008

A lot of us don't want to lose the place where we were raised and there's nothing wrong with that. What amazes me, is the government can issue a social security check for around 900.00 and say LIVE ON IT. But if you need a nursing home, all of a sudden, it's 4,000-8.000 a month. Yes, medi care pays for long term care and yes they should be paid. But why don't you ask our government why they will pay for illegal aliens health care and not expect a THING in return???? I do believe Americans should come first and if our government weren't giving all our money away to other entities, then maybe it'd be different. I want my inheritance, such as it is and feel I'm as entitled to it as an illegal alien is to what they get. And even legal aliens, people sponsored by our government to get education, furnished homes, cars. The money SPENT DOWN is to be spent down on the elderly person who needs the care. Everyone isn't out to cheat Medicaid, but it seems our government cheats us, as we've just seen with Wall Street. That's my take on it.

 
 

yvaldo

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Apr 29, 2009

How can I protect my parents from a sibiling who wants to put all of my parents assets in her childrens name? She is the one that lives in the same city my parents live and goes over their house and takes them to doctor's appointments. I am grateful she does this but I feel it is wrong that she is trying to put my parents assets in her children's name. I live out of town and it is hard to go and visit my parents. Who can I talk to or what can I do so that this will not happen? I know my parents do not want to do this but they fear that if they disagree with her that she would not be there to help them anymore. Need advice.

 
 

NAUSEATED

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Apr 29, 2009

Dear raerod, you should get an attorney. Also, if your sibling decides to put your parent's assets in their children's name, that could be considered stealing, or Elder Financial Abuse, only if your parents do not agree, or sign anything. It cannot be done without their consent. An attorney is needed for the legal advice. Good luck to you.

 
 

BryanWisda

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Apr 30, 2009

Raerod,

Yes, it would be wise to get an attorney. The attorney (in the same state as your parents) can help them establish a trust to help protect the assets. Additionally, the attorney can help you establish the proper powers-of-attorney such that there are reasonable courses of action for the utilization of your parents money.

A potential list of problems could come up by your sibling putting the money into their child's account. First, if the child is a minor good luck getting the money out of the child's account -- who's going to pay their bills when this happens. Second, depending on how much money we are talking about it would be necessary for your parents to file a gift tax return to avoid the IRS requiring that your parents pay gift tax on moving the money to the child -- if we are talking about a decent amount of money your parents would be using up their lifetime exemption for gifts.

Finally, Raerod, the best suggestion might be to setup a family meeting with you, your parents and your sibling(s) to discuss what is going on and determine what the best course of action is for everybody involved. Your sibling may have the best intention at heart.

Good Luck!

Bryan Craig Wisda, CFP(r)

 
 

Rosie03 has a great insight and message regarding the government spending on illegals and then putting the burden on the public for them! First and foremost "we" do owe our elderly. Not one of us would be here if not for our parents. We no longer honor them not do we in general want the burden of personally taking care of them. This is not a very pretty picture. My mother took care of her grandmother when she was a child. Everyone in the family from the youngest to the other elderly took care of each other. Birth to death was a family matter. What has become of modern society? If you are here legally and contribute or contributed to society you should be cared for by the government if you don"t have other means or money to care for yourself> if illegal then get legal> if infirm get help> Give thanks for the government, but contribute, Vote and keep up the good work.

 
 

NAUSEATED

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May 1, 2009

Bryan, that is a great suggestion. Most people just assume without asking, that they know other's intentions. A family meeting would be the best place to start. You never know, maybe the other family member has good intentions you do not know about. One hates to see family members split up because of assumptions. But if that does not work out, seek legal guidance. Good luck to you all!

 
  •  Comments 1 to 10 of 23 

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