With the holidays and families getting together, it is a great time to introduce some untouchable and difficult subjects, one of these being long-term care. It is a hard topic to bring up, but coming up with answers and a plan can bring a wave of relief to everyone involved. Good planning involves a mix of legal, financial, medical, and personal aspects. With so much involved, there are many questions that will have to be answered, but the ones below are a start.
Who is going to take care of Mom and Dad?
While mom and dad can be involved in this conversation, start the conversation between siblings. All families differ; many times there is an obvious choice for who is going to bear the brunt of caring for parents. When there is not an obvious choice, this needs to be decided. Mom and dad also want to have a say in this, they possibly trust one child more than the others or one child lives closer.
Maybe one sibling is retired and can help mom and dad with the small everyday tasks. Maybe one sibling is really good with finances and paying bills. Maybe no one is available to do any of this. Involve who you believe is important in this conversation, siblings, parents, and in-laws. If you can’t get a straight answer, at least getting everyone in your family thinking about this will be a good start. Make sure to bring it up consistently, as you do not want it to be forgotten about until a crisis hits.
How are Mom and Dad going to pay for long-term care?
The first part of this question requires that mom and dad come to terms that they might not be able to care for themselves at some point. This can be difficult; many people may not be ready or willing to admit this. According to the U.S Department of Health and Human Services, someone turning age 65 today has an almost 70% chance of needing some type of long-term care. This is a huge number, and the statistics alone show that mom and dad will probably need care at some point.
It can be easier to talk about long-term care in terms of someone else’s situation. Did a friend or family member already go through this? Talking about what was good and bad about their situation can get mom and dad talking about how they would like it to go for them.
If that doesn’t convince them to start talking about long-term care, try to come at it from another angle. Gaining an idea of their finances makes it possible to figure out how they will pay for this care. There are a few options to pay for it (you can read about those options here), but they are all expensive. If you can figure out where the money will come from, that’s a good start. Do they have an IRA? Is it a traditional or Roth IRA? Do they have significant credit card or mortgage payments that still need to be paid? How much do they have in savings?
Getting a good financial picture of mom and dad allows you to take steps now making it easier to pay for long-term care in the future. Consolidating accounts, making sure IRA beneficiaries are correct and up-to-date, getting a list of insurance policies, and getting account passwords can make a world of difference when payments need to start for long-term care.
What is their preference for receiving long-term care?
There are options when it comes to receiving long-term care. Would they ever move into an assisted living facility? Would they prefer to stay at home? If they are at home, would they need someone to come in once a week or more frequently? Would they want a family member to come help them or would they prefer hiring a professional? For some, staying at home is just not a reality and they must go to a nursing home. Do they have a preference of what nursing homes they like around the community? If their children do not live close, would they want to be moved to a nursing home closer to their children or would they rather stay where they are? Make sure to ask your parents what their preferences are.
Do they have the four documents prepared?
There are four documents that are important to have in place for mom and dad, especially as they get older: Financial Power of Attorney, Health Care Power of Attorney, HIPAA Release of Medical Information, and a Last Will and Testament. These documents will help the designated child and/or spouse make medical and financial decisions for the parent when they cannot do it for themselves. The Last Will and Testament lays out what they want to happen with their assets after passing. Make sure mom and dad both have all these documents in place, and if they already do, make sure they are updated. If they do not have all four of these, it would be a good time to start completing them.
When talking about long-term care with your parents, make sure that you are also looking at financial planning for yourself. The younger you are, the easier and more affordable it is to get these documents in place and purchase insurance policies for long-term care. Doing this together with mom and dad could become a great bonding experience for the whole family.
Long-term care is an important topic but many people are wary of talking about it. Unless you specifically have a plan for long-term care, it can be a huge challenge for the whole family. Plans will need to be reviewed and revised periodically, making sure mom and dad’s wishes have remained the same and all documents are up-to-date. Sometimes the best gift you can get is peace of mind.
Hans Scheil is the author of “The Complete Cardinal Guide to Planning for and Living in Retirement” and the accompanying workbook. He can be reached at Hans@CardinalGuide.com.
