Taking over as the caregiver for a loved one can be stressful for many different reasons, and it comes with a lot of unanswered questions. When should you take over? What needs to be taken care of? What would make them happy? However, as you begin planning to take over medical or life decisions for your loved one, have you also considered what to do with their finances?
While this can be a difficult topic to broach, it’s important. You have to be open and honest with family members and tackle it head on. At some point, many of us will be in charge of our parents’ or elderly relatives’ caregiving and finances. We should be preparing our strategies now so we are ready when it happens.
1. When is it time to help?
Have you been considering taking over as a caregiver for a loved one, but you’re not sure if they are ready? There are a few simple things you can do to determine if it’s time. When you visit, check for unopened mail or undeposited checks lying around. Either one could be a sign that they are no longer able to go to the bank or may not understand why they should. Are everyday activities becoming difficult for them?
If they start mentioning that they don’t have any money or are asking for money, this might be a good time to start these conversations.
2. How to get the conversation started.
No matter when these discussions happen, they’re going to be difficult. But avoiding them altogether can lead to major problems down the road for you and your loved one. Start by coming up with a strategy — don’t go into this conversation without a plan. You don’t want to upset your loved one or make them uncomfortable.
For many of us, discussing money is a very private issue. Reassure your loved one that this isn’t about taking over their finances, it’s to help set them up for future success.
Think about who you want to include in this conversation. Other family members? Any friends? It might be beneficial to have an outside perspective to help ease any tension or offer professional advice. If you can get help from a financial professional or an attorney who can lead you in the right direction, that is a great start.
3. Where to begin?
After you have these conversations, it's then time to take a closer look at your aging loved one’s financial situation. This includes annual income, credit card debt and how much they receive in Social Security.
Make sure you have an understanding of their monthly expenses, how much money is coming in and how much is going out. How are they paying their bills? Are they automatic? Being paid online? Or are they using paper checks?
They might have a life insurance policy that you don’t know about, and you don’t want them to lose those benefits because it stops being funded. Gathering all of these documents and putting them somewhere secure is key.
4. Important questions to ask.
Does your loved one have an estate plan? If not, they should. Many people think you have to be wealthy to have one, but that's not the case. Whether they are a multimillionaire or they have only a few bucks in the bank, they need an estate plan. Consider finding a good elder law attorney. They can collect the correct documents for you and your loved one, ensuring that you, not the state, are making the decisions, should they pass away.
You also want to choose a health care power of attorney. This is something you would ideally want to do before it’s too late so your loved one can pick that person on their own. This will ensure that you, or another family member, is legally empowered to view their medical records and decide where and how they are treated.
This is a critical part of an overall financial plan. You don't want something to happen to a loved one and be unable to legally decide for them even though you know their wishes.
Assessing the financial needs of a loved one is easier with a good plan. Working with a financial professional can help identify what needs to be done for your loved one and help reduce your out-of-pocket costs as a caregiver.
