Money is a taboo subject for many, but it’s one that’s necessary to discuss when you’re caring for an aging loved one. Understanding your parent’s current and future financial situation can play a major role in helping her age independently. While seniors often pay long-term care insurance premiums, or struggle to make ends meet every month, many fail to mention these things to their family members.
Having a full, clear view of your loved one’s finances not only allows you to make educated decisions and aids in making money last — it also helps ease your own financial strain. According to a national study conducted by Evercare and the National Alliance for Caregiving in 2007, the financial toll of caregiving is often as difficult to manage as the emotional toll. The study found that the average caregiver spent $5,531 out of his own pocket annually to pay for care for an aging loved one.
The Talk: What to Ask About Your Loved One’s Finances
Most lists of tips for caregivers include a discussion about an aging loved one’s long-term care desires, but discussions about finances are often overlooked. Among the questions you should be asking your aging loved one are:
- Does she have a durable power of attorney for her finances? A durable power of attorney (POA) is given access to financial accounts when a senior can no longer manage them herself. If another sibling or someone else has been named as her POA, it’s important to include this person in your conversations. If she has not named a POA, this is something that should be considered as soon as possible.
- How much income does he have? Knowing your loved one’s annual income can help you understand his budget better. Ask about Social Security, pensions, investment dividends, and other income sources.
- Where are her bank accounts, safety deposit boxes, and other assets? Who has the keys? Does she have a safe? Who knows the combination? If your loved one has a mortgage or investments, make sure to discuss these as well.
- Where are his financial records kept? Many seniors have filing systems in place, but others aren’t as organized. Knowing where you can find insurance policies, bank statements, and legal documents is critical. You may want to make a list of contacts for all relevant institutions, just in case you cannot find the information you need at a later date.
- How does she pay for her healthcare? Does she have Medicare or Medicaid? What about additional policies or supplements? Don’t forget to ask how other medical care is paid for when not covered under these policies.
- Does he have long-term care insurance? What’s covered? Having information about your loved one’s long-term care insurance policy is especially important, since there are dozens of companies who have sold this coverage over the years. It’s not uncommon to discover a senior had long-term care insurance coverage when sorting his belongings after his death. As a result of forgetting about their policies, some seniors pay for long-term care out of pocket for years, causing unnecessary financial strain.
Talking about your loved one’s financial situation is key in being prepared for what may come. Though this conversation can be difficult to initiate, it helps reduce both the financial strain and the emotional toll on everyone involved in the long run.