This is the first of two-part series on Aging. In this first segment, we examine the realities that many adult children in their 50s may need to help their parents face as they age. The possibility of losing independence and control of their lives is a very real fear. Watching parents get older is a wakeup call for those in their 50s and 60s too. In our next article, our focus shifts to what you can do to better prepare yourself and your children for the years ahead. It’s never too early to plan for a life that is lived as you want at every stage.
If your parents have reached the age of 70, it’s time to have a conversation with them about what to do should their mental or physical condition begin to decline. Often, families delay this conversation until a triggering health event occurs. Adult children are left making difficult decisions about medical care, living arrangements and on-going care with little or no information about what their parents want, or if their financial situation can support them.
Having the conversation with your parents
Money talk with family members can be difficult particularly in families where the topic has never been discussed or was intentionally kept private. Parents may feel ill at ease talking about their finances, particularly if they think they are not prepared financially. In cases of significant wealth, we find some aging parents have not revealed the extent of their wealth to their children over the years for fear of them being less diligent about creating their own independent wealth.
Regardless of the reasons, if you find your parents are completely unwilling to share information, at a minimum, you should inquire whether anyone has reviewed their financial situation and potential care needs. You may even ask if there is anyone they have confided in that you should contact should a crisis arise.
When Kim Natovitz, an Associate of Tri-Bridge Partners and leading authority on aging and long-term care, works with her clients and their aging parents, she coaches them to consider some of the dynamics of aging. These often influence parents when they consider and discuss their plans with their adult children. Some of these common challenges of aging include:
“Recognizing that your parents may be grappling with how to handle these aspects of aging can help you structure a conversation that recognizes their concerns,” said Kim. “Stating your intentions in a gentle way such as ‘let’s talk about a backup plan in case we ever need one’ or ‘I want to make sure I understand your financial situation so I can make decisions correctly’ may make the conversation more comfortable for them.”
If you’re still meeting resistance, try asking whether they have a long-term care policy. If they do, have them provide the details of the policy and where you can find a copy in case you need to access the information.
If you want a more directed conversation or some help in structuring the topics to cover, a great book to give reluctant parents is The Other Talk by Tim Prosch. This is a fantastic resource because it describes why early planning is so important. The book suggests that parents can maintain control of their lives even in old age so long as they articulate their wishes in advance of a crisis.
Deciding what type of help they need
Another reason that early planning is important is that disability can occur at any age and diminished mental capacity can occur much sooner than age 70, especially in the case of early onset dementia or Alzheimer’s. Like any medical condition, these diagnoses have a wide range of implications and each patient’s experience will differ. The planning for care in the case of diminished capacity differs from planning for someone with physical limitations. If patients are substantially younger than the average age of patients in a nursing home, care options may be more limited.
Online resources, like the Alzheimer’s Association offer information about providing care for a loved one with dementia or Alzheimer’s. They have local chapters that can help you find care in your area through an Online Caregiver Center and their Caregiver Action Plan. You may also want to consider hiring an Aging Life Professional for more personalized assistance. These specialists understand the specific nature of the disease and what your loved one is experiencing. Like the Alzheimer’s Association, you can find local resources and care options specializing in these cases.
Sometimes these diseases progress quickly, making the need for care come sooner than expected. In other cases, the need for assistance and care may extend for a prolonged period of time and have significant financial implications for families. Once diminished capacity sets in, you may have difficulty knowing your loved one’s true desires. Having conversations with them early on will give them comfort that their wishes will be heard, and those who may be making decisions on their behalf will have their plan to guide them.
Another thing to consider is who will be responsible for managing the daily financial affairs of a parent if they become incapacitated either mentally or physically. A family member who is good with finances may take on this role. Families often utilize online bill paying or establish a specific process to ensure their parents’ financial needs are met in a timely fashion. Someone will also need to coordinate medical bills between providers and insurance companies. Since elder abuse is on the rise, we encourage you to establish some form of checks and balances regarding the handling of your parents’ money and to call in the help of an Elder Law Attorney if you believe misappropriation has occurred.
When family members disagree
It is all too common for adult children to disagree about the medical and financial care of their aging parents. For example, if your parents do not have Powers of Attorney, who in the family will make financial and medical decisions for an incapacitated parent? If there is disagreement, who will be responsible for making those decisions and how will they be made? What should happen if financial resources are not sufficient to meet the needs of your parents?
Two options for deciding these difficult family matters include hiring a mediator or a care manager. These professionals are experienced at helping families work through care decisions and the emotional struggles and individual agendas that can surface. Elder care attorneys may also be needed depending on the situation.
Often, a family member will step in to provide care. This leads to a host of different questions to be answered. For example, will the family member be compensated for their time and any expenses that come up as they care for their mom or dad? How do you balance the needs of the parent with the needs for the adult child to work or care for other family members such as their own children?
Kim Natovitz recommends that in these cases families consider creating a care agreement that spells out the exact nature of what care will be provided and what, if any, compensation will be provided. It should also address how to provide relief for the family caregiver when they need to take some time off.
Gray Divorce and aging
One trend to keep in mind when considering family caregiving is the rise in grey divorce. When parents divorce later in life they won’t have their spouse to take care of them as they get older. In many of these cases, their children are needed to provide care or make decisions on behalf of their single parent.
Aging in place
Most parents will say their plan is to live at home. While many consider aging in place the ideal solution, it comes with tradeoffs in safety and costs to refit their home. Adding services to do yard work, clean and maintain their home and provide transportation are also additional expenses to consider.
If physical limitations progress, you’ll likely be considering care options that include home care, assisted living, or nursing homes. If transitioning out of the family home is necessary, remember that someone will need to decide what, if any, personal items will accompany the parent as they move to a new residence. Companies that offer downsizing and home clearing services can come in handy when families are helping parents move into assisted living facilities.
We cannot overemphasize the importance of having conversations with your parents about their care plans as they age. Consider both their financial situation and their range of desirable care options if assistance becomes necessary. There are many professionals well-suited to support you in working out plans in advance or in times of crisis. Elder attorneys, insurance professionals, financial advisors, care managers, and specific non-profit organizations such as the Alzheimer’s Association have information and resources to assist aging parents in planning ahead and lending a hand when adult children are called in to execute those plans.
Shawn: Now you hear all kinds of deals about leasing cars, how can you negotiate a better deal if you want to lease?
Nina: Okay, well many people don't realize that they can actually negotiate the sticker price on a leased car in the same way that you would do that if you're buying a car. And since when you lease -- when you're, you know, your lease payments basically cover the depreciation, the difference between the sales price and the residual value. So it's definitely in your best interest to try to reduce that sales price as much as possible because then you'll pay you know, smaller dollars over the life of the lease. Make sure you pay attention to the down payment at the lease signing. And so here's an example, you might see an ad that says you know, lease payment is only 1.99 a month and that sounds like a great deal for thirty six months. The catch is, is that it might require a $3,600 down payment. So, if you amortize the down payment, then actually that 1.99 special, becomes 2.99. So, you really have to kind of look at total costs.
And then lastly, dealerships use the term, money or lease factor, when they're calculating your financing costs and a lease factor is not the same as an interest rate. So, you have to make sure the dealer converts that lease factor into a comparable interest rate so you know what your financing charges are.
Shawn: At the end of the day, does one method wind up being more expensive more often than the other, or can we tell that?
Nina: You know what, it really depends on how long, if you're going to hold the car for a long time, you're better off buying. But if you know, and if you're not, if you just really enjoy driving and you want to have a new car, then go ahead and lease. I mean, there's pros and cons to both, to be honest with you, it's not one size fits all.
Shawn: Alright Nina, great. Happy Thanksgiving to you. Alright, Nina Mitchell is with The Colony Group, for more go to wtop.com and search Her Wealth.
Consider this your training manual to get and stay financially fit for life!