As an elder law attorney, nearly all the work I do with my clients is facilitated by members of their family. Family members are often the people who call me about their elderly loved ones. Family members bring their loved ones to meetings. Family members are the ones who provide care. The family is the elder care shock absorber. They’re the ones deciding what to do, and they’re the ones carrying it out. Family members are the ones named to carry out responsibilities when a person falls ill. Family members will serve as agents, Trustees, executors, and more.
Even if you don’t have actual blood relatives, there will be people filling the roles that family members typically play. It could be anyone—a friend, a neighbor, an attorney, a professional fiduciary, or someone else. These people become your family.
You can’t talk about aging without talking about family.
Why, then, are so few families talking honestly about the realities of aging? Why is it so hard for retirees to talk with their families about the health , housing , financial, and legal implications of growing older?
Few Plan for Family Support during Retirement
In our sickness-phobic and death-averse culture, no one wants to talk about the unpleasant parts of growing old.
Most people just assume that family members will be there for them when the time comes. That’s what family does, right? We make these assumptions, yet most of us don’t talk about what we want for ourselves or what we want family members to do when they have to step in on our behalf.
Can you see the problem? When you create a plan for retirement, most of that plan will be implemented by someone other than you if you become incapacitated. This person is usually a spouse, a son or a daughter, a friend, an extended family member, or some other person.
Every part of aging involves support from family members or a professional support system. When you’re no longer able to manage your affairs, others step in. Traditional Power of Attorney documents don’t give your agents—usually family members—any directions about what to do with the powers those documents give them. Your housing choices determine the involvement your family will need to have. Your lifestyle choices can create the health crisis that sets the elder care machine in motion.
Family members are a factor in every aspect of your life in retirement, including where you live, the care you receive, how your affairs are managed, and the quality of life you will live. That’s what Susie learned after her stroke.
Family members are the project managers of your life when you’re incapacitated.
Yet, we don’t talk about it. We simply assume.
If you have talked about it, maybe your conversation was limited to something like this:
“Promise me you won’t put me in a nursing home.”
“If I’m in a coma, promise me you’ll pull the plug.”
Most conversations don’t go beyond that. There’s little discussion of the “what,” and even less discussion of the “how.”
If you assume that your kids are your “Plan A” for your old age, but you never talk to them about it, you’re almost guaranteeing that your life will turn out in a way you don’t want it to. If you assume that they will take you in, be the agent for your Powers of Attorney, or be your caretakers, you’re headed for trouble.
That’s a big reason why so many of us land in nursing homes. Our families just don’t know what to do when we get sick.
They just aren’t prepared, so they do what the “system” tells them to do.
That’s how you end up broke, a burden, and stuck in a nursing home.
When Assumptions about Family Support during Retirement Cause Problems
I had a case involving a single mom with four daughters. They were a loving family who cared about each other.
One of the daughters (let’s call her Emily) had lived with Mom for years. Emily looked after Mom. She got groceries, cooked, managed her mom’s health care, and took her to doctor appointments. The sisters all trusted Emily. They were grateful for her willingness to provide such loving care.
When the family showed up at my office, Mom’s mental capacity had diminished to the point where the family was ready to place her in a nursing home. They wanted Medicaid to help pay for this long-term care while protecting Mom’s assets to the greatest degree possible.
In cases like this, the state always has the right to look at financial transactions over the previous five years. Before we submit the application, we always go over at least one year of bank statements so we can answer questions if needed.
We started the application, the family signed the fee agreement, and everyone went back home. As my staff reviewed the bank statements, they noticed dozens and dozens of electronic withdrawals that weren’t noted on the mother’s check register.
I called Emily and asked for an explanation. She promised to send me all the details.
I called her again. “Can you get me this information? I asked. “I need it to finish the Medicaid application.”
Again, Emily agreed to send me the details, but she didn’t follow through.
I kept calling. She stopped responding.
I needed to get this resolved, so I called the mom. In her diminished state, she was unable to help, so I started calling the sisters. “I need this information and Emily is not cooperating,” I told each one.
They all promised to get back to me.
I pushed back. “No, I just want to see all of you together in my office so we can go over these bank accounts and figure out what’s going on with these withdrawals,” I said.
What I didn’t mention was that my staff had continued to dig into the bank records and had discovered hundreds more withdrawals over the first few years alone. The withdrawals weren’t large—under $100, in most cases—but they were happening every day, often from more than one ATM per day. If the withdrawals continued at this pace during the entire five-year period, the total could be more than $400,000.
This could put Mom’s Medicaid application in jeopardy.
Finally, all the sisters came in and we went through the records. Emily was extremely uncomfortable answering questions about the withdrawals.
Where did the money go?
Eventually, the truth came out. Emily had a gambling problem. No one else in the family knew about it.
Now, we had a real problem. Emily’s actions had thrown a major monkey wrench in Mom’s Medicaid application. You’ve already heard me talk about the five-year lookback period. In Mom’s case, we can’t say that Mom has gifted any money, because she hasn’t, yet we must account for the money that Emily took.
We had two options, and both were bad. If we told the state that Emily had been using her mom’s Power of Attorney to steal money, the case would have been referred to the Attorney General’s office, and Emily might end up in jail.
If we declared these withdrawals as a gift, Mom wouldn’t get any Medicaid benefits for the next five years.
It was a difficult situation.
The sisters were angry when they discovered what Emily had done, but they ultimately decided against sending Emily to jail.
This case points to two problems with the way our society handles family involvement during the retirement years.
The first involves a mindset. Emily had been serving as her mother’s unpaid caregiver for years. The family members were all fine with this, and it’s no surprise. In the U.S., many of us are quite comfortable relying on the unpaid labor of others to provide care for elderly loved ones. It’s expected. It’s what you do for family. The underlying mindset is this: Shame on you if you pay for a service you could do yourself.
Where I grew up, it’s different. There is no shame in paying people to perform tasks you could do for yourself. When I was a youngster living in India, I saw my family pay for outside help with all sorts of household and caregiving tasks.
Second, Emily had been able to steal money because there had been no transparency in her actions. The sisters had no idea that they could demand an accounting from Emily. There was no mechanism in place.
Traditional retirement planning assumes that your family always be there for you. As you can see, that’s not always what happens.
If you want your family to help you achieve the outcomes you care about most in retirement, traditional retirement planning doesn’t deliver . Traditional retirement planning isn’t focused on helping you avoid institutional care, avoid going broke paying for care, and avoid becoming a burden on your family. However, if you want to give your family a roadmap to follow to help you accomplish these goals without creating unnecessary burdens for them, a LifePlan is what you need.
Learn how to create your own LifePlan at AgingOptions.com .
From Your Retirement: Dream or Disaster? by Rajiv Nagaich, published by Hasmark Publishing. Copyright© by Rajiv Nagaich 2023.