5 Key Finance Tips for Caring for Aging Parents

Guest Post by Kaylynn Evans

According to a recent survey from the National Alliance for Caregiving and AARP, approximately 43.5 million adults in the United States serve as caregivers for elderly parents or children. Roughly 80 percent of that number are caregivers of people older than 50. One common denominator among all caregivers is that it can take a financial toll, but this can be lessened if you plan accordingly. Below are five key tips to help manage the financial aspect of caregiving for both you and your aging parents.

1. Make sure you have a Power of Attorney (POA)

Once your parent’s health starts to decline, it’s important that another trusted family member can make financial decisions for them. There are many types of POAs, but the one you want is a Durable Power of Attorney. This would assign you the responsibility to manage all aspects of your parents’ financial and health matters. Some states require you to notarize power of attorneys, so be certain to check your state laws or consult with an attorney on this.

2. Plan for your own financial future

You don’t want to neglect your own financial health while caring for your parents. Setting up your own retirement plan should be just as important as making sure your parents' financial needs are being met. Make sure you’ve set a budget and carefully monitor your expenditures, especially if you’ve had to give up a job to help take care of your parents. This is not the time or place to take on additional debt. You should have an IRA or 401k and consider long-term care coverage for yourself.

3. Have a clear understanding of their long-term care coverage

Long-term care coverage pays for expenses not covered by traditional insurance and Medicare. This would include costs like long-term stays in a nursing home or a skilled nursing facility. Before coverage kicks in on most of these policies, the insurance company wants to see a “triggering” event. This would be a time when the insured can no longer perform routine daily tasks and would trigger the insurance to kick in and become active. Make sure you’re clear on what qualifying events or symptoms need to be present, especially with cognitive impairment.

4. Make sure your siblings are on board

One of the most common causes of sibling resentment stems from caregiving for an elderly parent and managing their finances. It’s important to sit down and have a conversation with your siblings and be clear on who will do what. Some caregivers use a Caregiver Agreement that will stipulate who will care for the parents and what kind of monetary compensation they should receive.

Try to plan doctor visits and any visits with nursing homes or assisted living homes with your siblings. It’s always a good idea to have more than one person on these visits to cover questions and make sure you’re all on the same page with the information you’ve received.

Planning regular times to communicate with your siblings can help avoid any miscommunication frustrations and ensure that everyone is on the same page with your parents caregiving and financial management.

5. Plan for Medicaid

According to Medicaid.gov, “12 million people are 'dually eligible’ and enrolled in both Medicaid and Medicare, composing more than 15 percent of all Medicaid enrollees.”

Part of preparing for Medicaid coverage to kick-in means “spending down” what you already have. What is a Medicaid spend down? Geoff Williams, contributor to the US News Money website shares, “A Medicaid spend down is a financial strategy used when an individual's income is too high to qualify for Medicaid. To be accepted into the program, some of the individual's income must be spent down to ensure his or her income is low enough to qualify for Medicaid.”

Guidelines vary by state, but one consistent requirement is that you submit your bills that use up the spend down to Medicaid for verification that you have met their requirements. Besides medical expenses and costs, some states will allow you to payoff accrued debts such as mortgages, automobile, or credit card debt. To help you navigate this complex process, find a planner that specializes in Medicaid coverage.

Finances can be a source of frustration and stress, but if you plan accordingly by following these steps, you can ease a lot of those worries.

Kaylynn Evans is the executive director of Vineyard Bluffton, an assisted living community opening in coming months in Bluffton, South Carolina, specializing in care for those suffering with memory loss. Kaylynn has more than twelve years of experience in healthcare, with nearly ten years of specialized experience in dementia care.