The financial challenges of caring for elderly parents are many.
The sheer weight of it all often leads to feelings of inadequacy and hasty decisions can cause financial distress. It begins with communication and getting past the “financial discussions are private matters” many of us heard while growing up.
Valerie McLaughlin, of Qual-i-Tax, Inc. in Annapolis, MD provides some tips on handling the increasingly common scenario of caring for aging parents.
Valerie: What you need to realize is that this process is not something that you can keep separated in your life.
You’ll do your family a great service by viewing it as an experience to be shared with everyone in the family, often some members of the outside community, and ultimately a financial or tax advisor who specializes in eldercare and family estate issues.
Here are 3 practical tips I can offer:
1. Get the Actual Facts
You may have avoided talking with your parents about finances in the past. Whether you were taught that those things are private or “it just never came up,” now is not the time for surprises. You need to know how your parents are doing financially and whether they’ve made any provisions in case they become ill or suffer a long-term disability.
2. Ensure the Estate is Set Up Right
At this stage of your parent’s life it’s important to make sure that your parent’s legal house is in order. This can be a tricky conversation to have, but your parents absolutely need to have a financial power of attorney, advance health care directive (a healthcare power of attorney plus a living will), and a simple will.
It may not be the fullest estate plan for your parents. It might not be proper Medicaid planning. However, it is the bare minimum you will need to help care for your elderly parents.
3. Insure Against the Future
Now is the time to examine long-term-care insurance or assess whether savings will cover an extended nursing home stay, assisted-living facility costs or extended home-care services.
You may be tempted to begin to liquidate your holdings or stop saving for your own benefit to help pay for the cost of your parent’s care. Big mistake.
Remember that there are many more programs available for supporting an aging parent – through government and financial institutions – than there are to fund your own retirement. It’s vital that you continue to save for your own retirement.
By taking care of yourself first, you’ll be in a better position to care for others.
Valerie McLaughlin, Enrolled Agent
Qual-i-Tax, Inc. is located in Annapolis, MD
For more information or to contact Valerie McLaughlin, visit: www.qualitax.net
Thanks to Valerie for her insight and contribution.
Are you dealing with a similar situation? We welcome comments or real life situations that speak to the financial caring for elderly parents. The more informed we all are, the better choices can be made for ourselves and our families.
Article information should not be used exclusively to make legal, financial or tax decisions. Because laws and rules can change frequently, topics may not always be updated to reflect these changes or may not apply to your unique situation. It’s prudent to seek out the advice of a professional for your specific needs.
Category: Personal Finance