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Caring for Aging Parents Takes Patience – and Lots of Planning

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Here on the Blog, we write frequently about the joys and challenges of caring for an aging loved one. That’s because millions of us are already caught up in the work of caregiving, either as one who gives care or one who receives it. The odds are high that, if the trials of caregiving haven’t yet affected your immediate family, they will.

Given that fact, not to mention the inexorable realities of demographics, planning ahead for caregiving should be something more of us do. With that in mind we offer this highly relevant article from Kiplinger in which reporter Alvina Lo suggests that there are ways for families to lighten the burden of caregiving through careful preparation. Advance planning might not entirely soften the emotional blow of caring for aging parents, but it can certainly reduce some of the stress and make the tasks of caregiving easier to bear.

With our focus this week on caregiving, it seemed a good time to bring Lo’s article back for another look at a timely topic.

Sandwich Generation Faces Unique Struggles

As Lo’s Kiplinger article observes, our society now has an increasing number of professionals who are part of the “sandwich generation,” caring for both young children and aging parents at the same time. This inter-generational reality has brought new stresses to light.

Lo compares “senior caregiving” with child-rearing. “While many planning concepts may be similar,” she writes, “the dynamic and emotions involved when caring for aging parents are dramatically different.” Her article “[addresses] some of the common considerations as one enters into this stage in life.”

Having Proper Legal Documents and Plans in Place

Preparation starts with the basics. First of all, says Lo, having all of your loved one’s proper legal documents readily accessible is essential to make sure that everything goes as smoothly as possible. These documents generally include your parents’ will, powers of attorney, health care proxies, and burial arrangements.

Lo explains that there are two types of power of attorney: springing power of attorney, and durable power of attorney. “In a springing power of attorney,” Lo explains, “the document becomes effective at a future time, usually upon a certain event such as incapacity of a parent. That’s when it ‘springs’ into effect. In a durable power of attorney, the document is ‘durable,’ meaning it becomes effective immediately upon signature regardless of future events.”

It’s vital to talk with your parent or parents, and a legal adviser, to see which type is best for their unique circumstances. Do so early on before cognitive decline makes things difficult.

Be Cautious About Designating Multiple People as POA

Parents may struggle with the decision of who should serve as POA. “If there are siblings involved, it would be important to have an open and honest dialogue as to who should serve in this role as the attorney-in-fact,” Lo adds.

Lo writes that legal experts caution clients not to name all of their children in the role of power of attorney, with shared responsibilities. Doing so can lead to too many possible logistical issues, delays, and conflicts, especially when needing multiple signatures and group consent before an action can be taken on behalf of a parent.

“If it is indeed a parent’s wish to name multiple people in this role,” she writes, “then it would be important to clearly document how decisions are made — by any one of the attorneys-in-fact, by majority or by unanimous consent.” But a better course would be to choose the best person, regardless of birth order. It might not even be a family member.

Health Care Proxy and Living Will Serve Overlapping Purposes

When kids care for parents, the authority to make medical decisions is often critical, and that entails creating a health care proxy. The health care proxy “appoints an agent to make medical decisions on behalf of a parent in case of incapacity,” Lo explains. “A living will or an advanced directive provides a parent’s wishes on medical treatment when it comes to end-of-life decisions. In some instances, a living will and health care proxy can be the same document.”

It’s common for people to confuse the two documents, since they both deal with medical decisions. But Lo explains it this way: “Think of the living will or advanced directive as the written memorialization of a parent’s wish and the health care proxy as the person who is going to carry out those wishes.” In other words, the first is the “what” and the second is the “who.”

Wills and Trusts Don’t Cover All the Details

Finally, there’s the parent’s will. “A will provides for the disposition of probate assets upon death,” Lo writes. If your role as caregiver includes being the likely executor upon your loved one’s death, you’ll need to know the whereabouts of their will and any trust-related documents they may have in force.

But as the article explains, these legal documents may not answer all the relevant questions you’ll be facing. “Of special consideration,” Lo writes, “is understanding a parent’s wish as it relates to burial preferences. This may or may not be documented in the will. If there is any pre-determined or perhaps even paid-for burial arrangements, it would be advisable to have all those documents on hand.”

Obtaining Needed Information in Advance

Lo warns that, beyond the emotional burden, often the most difficult aspect of caring for aging parents is not having all the right information, and not having it in the right place.

“Knowing a parent’s full financial picture, including assets, liabilities and cash flow needs ahead of time is an important foundation you will need should you have to step in, which unfortunately for many people, happens unexpectedly when a parent suddenly falls ill or becomes incapable of handling his or her finances,” she writes.

But, she acknowledges, many parents won’t want to share financial details.  “Transparency to this level can admittedly be a challenge,” Lo says, “and so at a minimum, I would advise that you know where and who to go to for this information if and when the times comes. Make a list of a parent’s financial adviser, accountant, attorney and other trusted adviser, so you know who to call if needed. Know where all the important legal and financial documents are so you know where to look if needed.”

Accounting for the Costs of Caring for Parents

Similar to planning for childcare costs and eventual retirement planning, Lo says that it’s essential for you to understand the costs associated with your parent’s care, along with the various funding options available to them. “What resources do your parents have that are available for their care?” she writes. “Are there liquid or easily accessible investment assets, retirement accounts and/or a long-term care insurance policy in place?”

Moreover, since not all assets are created equal when it comes to timing and eligibility for government benefits, it’s important for you to know the landscape of where your parents stand. “For example,” Lo explains, “qualified retirement accounts are unique because they get a degree of creditor protection, and they may impact Medicaid eligibility benefits. So it may be advisable to look to non-qualified accounts as the primary and first funding source to the extent that required minimum distributions (RMDs) are not sufficient to cover the costs of care or are not yet being taken.”  This is where qualified financial advice is essential.

The Big Question: Are You Willing to Pay for Care Costs?

Underlying all that data for many families is the “elephant in the room” question: To what degree are you willing and able to be a funding source for your parents’ care?

“How much of the parental care will you be shouldering, and how would that fit into your own budget and plan? Have you had the conversation with your spouse or significant other on what that amount may be? If you have siblings, how will each contribute?” Lo asks. All of these questions are best asked well before anything happens to avoid disaster and undue stress later.

Medicaid and Elder Law Planning

As many of our readers know, Medicaid is the federally funded health insurance program administered by each state for low-income people. Many Americans have household income and assets that are well above the threshold to qualify for benefits under Medicaid, but it’s important to do some planning if you think you may want to avail yourself of those benefits in the future. (This also applies to VA benefits.)

“At a very high level, to be eligible for Medicaid benefits, one must meet both a resource and income test,” Lo writes. “The threshold varies state by state. Depending on where your parent lives, certain assets may be exempt from the calculation, such as qualified retirement accounts in payout status, primary residence up to a certain amount, irrevocable funeral/burial arrangements and certain qualified trusts.”

In the end, Lo admits that it’s best to consult a qualified elder law attorney local to your parents’ residence to make sure you take advantage of every opportunity available to you. For example, many of Rajiv’s clients have taken advantage of what’s called a Safe Harbor Trust as a tool to set aside assets for future long-term care, free from Medicare’s “look-back” concerns. We urge you to contact a qualified attorney for advice particular to your family’s situation.

Preparing for the Emotions of Planning and Caregiving

Finally, Lo recognizes that much of the difficulty of caring for aging parents is emotional, especially the transition of roles as you take on the mantle of “caregiver.”

“It takes an incredible emotional toll not only because it can be financially significant, but also because it can be time-consuming in terms of the energy needed to pay bills, gather information, help with medical care and appointments and handle various day-to-day matters,” Lo writes.

She cautions, “Even the best-laid plans will require time and energy to implement. Preparing oneself for this mentally and setting expectations up front with other interested parties, whether it be siblings, spouse, significant others or other caregivers, would be helpful.”

Understandably, your parents will experience emotional difficulties with this change, too. Aging and admitting to new limitations can be very daunting.

“The best situation is when you have a willing party on both sides where the planning can be a collaborative process in which parents are openly sharing their wishes and information, and the children are prepared to step in and able to honor those wishes,” Lo concludes. “It’s a long journey, just as life, and the more planning you do, the more prepared you’ll be.”

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(originally reported at www.kiplinger.com)

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