What is Elder Care Planning?

 What do you think of when you hear the term Elder Care?  For most, the term springs to mind thoughts of care for older adults who are in need of assistance…at home care or care in some type of assisted living or other care facility.  In reality, Elder Care encompasses a much broader spectrum of planning issues for older adults, including legal and financial planning in addition to traditional care and assistance.

Individuals work with their financial planners to plan for retirement.  To most, this means making sure that they have enough income and savings to maintain their lifestyles after their work lives are over.  This can mean traveling, pursuing hobbies and spending time with family that was not possible during working years.  What most people fail to plan for are later years of retirement that might involve health and or cognitive issues that can cause changes in lifestyle and expense. 

It is never too early to start planning for these later life issues.  It is never too early to think about the challenges you might have as you age and your preference for how to address those challenges, should they occur.  Many people, however, delay this type of planning not wishing to think about what might happen in later life.

How do you know if it is time for you to talk to your financial planner about Elder Care Planning?  Answering these few simple questions can help you decide if you need to start planning.  If you can answer YES to all of the questions on this checklist, congratulations…you’ve planned well.  If you answer NO or NOT SURE to any of the questions, it might be time to talk to your financial planner and start planning now.  

In my upcoming blogs I’ll walk you through some of the top Elder Care Planning mistakes.

Sandra Adams, CFP® is a Financial Planner at Center for Financial Planning, Inc. Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In 2012 and 2013, Sandy was named to the Five Star Wealth Managers list in Detroit Hour magazine. In addition to her frequent contributions to Money Centered, she is regularly quoted in national media publications such as The Wall Street Journal, Research Magazine and Journal of Financial Planning.

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Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.  You should discuss any legal matters with the appropriate professional.

November is National Caregivers Month

 November is a month of gratitude.  We celebrate Thanksgiving Day and express our appreciation for the good things in our life.  What better time to say an extra “thanks” to the caregivers in our lives?

According to the National Caregivers Association, over 65 million Americans – approximately 29% of the U.S. population – provide care for chronically ill, disabled or aged family members or friends during any given year.  Family caregivers provide an average of 20 hours of care per week.  Over 66% of these caregivers are women, and 37% also have children or grandchildren under the age of 18 living with them.  What, you might ask, does this have to do with financial planning?

The reality is that the value of the services provided by family caregivers in the U.S. is estimated to be upwards of $375 billion each year.  Most of these caregivers receive little to no compensation for the services they provide.  Providing caregiver services to friends and family can create a drain on family funds, as these caregivers must often leave their jobs or significantly reduce their hours.  This, in turn, drains savings and delays retirements.

Action steps can be taken to protect the financial well-being of these valuable caregivers:

• Have a family plan in place for providing care.  My recent blog on holding a family meeting is a good guide for starting this conversation. 
• Coordinate family resources.  This involves sharing responsibilities among family members (even those living at a distance) so that no one member is overburdened.
• Put financial resources in place to cover potential long term care expenses.  This includes purchasing long-term care insurance or alternative self-funding strategies so that care can be paid for (this includes providing possible compensation for family caregivers).

One of the best ways to say “thank you” to current or future caregivers in your life is to plan.  Contact your financial planner to provide assistance with family meetings, coordination of resources, or long-term care funding.

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The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.  Any opinions are those of Center for Financial Planning, Inc., and not necessarily of RJFS or Raymond James.

Year End Planning: Schedule a Family Meeting

 It’s hard to believe that in just a few short weeks, the holiday season will be upon us.  Family gatherings during the holidays are rare occasions when parents and siblings are in the same place at the same time.  While these gatherings are wonderful opportunities for casual conversations and reminiscing, why not use this time to have a productive family meeting?

It is important for families, no matter the ages of the family members, to have serious conversations about the legal and financial planning in place; or the planning that is not in place that needs to be.  Important points for discussion may be:

• Legal Documents – Do all family members over the age of 18 have their own Durable Powers of Attorney (POAs for Health Care and General Financial are needed)?  Do those assigned as POAs understand their potential responsibilities in their roles?  Are wills or trusts in place or needed?
• Financial Savings – Particularly for elder family members, are there financial resources and structures in place to fund potential long-term care needs in the future?  For younger family members, is there an opportunity to use year-end gifting to help fund education or retirement savings (i.e. ROTH IRAs)?
• Elder Care Planning – For family members who are aging, this meeting may be an opportunity to start conversations about future care.   Discussions regarding future housing and care needs, as well as a review of the older relative’s future challenges, alternatives and resources are important.  In particular, beginning to lay out future roles of family members is critical to the future success of this kind of planning.  For a list of questions that might be helpful in starting these conversations, click here.

As you look forward to the holiday season, plan for good food and family stories.  But also plan for important conversations that can affect your family’s legal and financial success.  By planning ahead for these conversations, family members can be prepared to contribute to the planning in a meaningful way.  For additional tips on holding these all-important family meetings, talk to your financial planner.

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Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.

The Holidays – A Great Time for a Family Board Meeting

If your family is like most, the holidays are one of the few times during the year that the entire family gets together in the same place at the same time.  If you happen to be an adult child serving as a caregiver for an elderly parent (or parents), now is the perfect time to take charge as CEO of your “family care corporation” and schedule your annual board meeting.

Typically, if children are caring for aging parents, one of the children shoulders the burden more than the others.  If you are in this position, do what any corporate CEO would do…schedule a board meeting and do some strategic planning.  Manage the business of family caregiving by working with other members of the board (your siblings and your parents, if they are able) to make sure all parts of the business are being managed efficiently and that all parties are contributing to its success. 

Make sure the following job duties are covered by members of the board:

• Managing the finances.  Making sure that someone is overseeing the finances and making sure that bills are being paid.  With online bill pay and access to bank accounts from remote locations, this may be the perfect job for the out-of-town sibling that is demographically unable to handle other duties. 
• Managing the care.  If you are working with a Geriatric Care Manager or in-home care company, someone needs to be the primary contact for these services and communicate any developments to the rest of the family.
• Managing the day-to-day operations.  This is likely the job for the sibling that lives nearest. It includes running errands and accompanying elderly parents to medical appointments and getting groceries, amongst other things.

Once duties have been delegated, be sure that each sibling has the tools he or she needs to do their job.  Make sure necessary authorizations are in place, which may include legal documents including Durable Powers of Attorney for General/Financial and Durable Powers of Attorney for Health Care.  Schedule frequent reporting sessions so everyone can stay on the same page.  And make it a point to schedule family meetings with your parents’ professional advisors – financial planner, CPA, estate planning attorney, etc.  This group of professionals can serve as a crucial advisory board for you and your family.

A business cannot be successful if one person is trying to fill every position.  As the sibling who has chosen to take charge, make sure you empower your siblings to contribute to the success of your family care corporation.

The Best Gift You Can Give Your Family

What is the best gift you can give to your family?  Is it college education for a grandchild?  Is it a paid family vacation for your children and their families?

Gifting to family members may be an important piece of your financial legacy plan.   You may desire to gift to family members during your lifetime – when the financial support is needed or when you can observe the enjoyment of the gift. 

The BEST gift, as it turns out, is for you to plan ahead for yourself.  Your ability to ensure that you can fund your own financial independence and any future long-term care needs can provide more of an economic (an emotional) benefit to your family than a gift now.

• According to a recent MetLife study, Americans who take time off work to care for their aging parents are losing an estimated $3 trillion dollars in wages, pensions and Social Security benefits.
• A 2010 study by Fidelity Investment Research found that a 65 year-old couple that plans to live into their 90’s spends $250,000 to cover health care expenses, including Medicare premiums, co-pays, coinsurance and some home care costs.  Note:  This does NOT include chronic conditions or long term care costs.  

Before significant gifting is done, it is important to do a realistic assessment of your ability to fund your own retirement and long-term care needs.   Make sure that the proper documents and financial tools are in place to fund your needs now and later. Take the first step now and schedule a time to meet with your financial planner to discuss long term care planning.