“You can’t put a price on filial affection, but the cost of being responsible for a parent or grandparent may run a lot higher than you’d expect.”
The family member who becomes a primary caregiver for a loved one is doing a wonderful thing, says The Motley Fool in the article “The High Cost of being an Elderly Relative’s Caregiver.” However, they should go into this relationship knowing what the cost will be in terms of time, energy, emotions and money. That includes a frank conversation with other family money, which is not an easy discussion to have.
Caregivers spend about $7,000 a year out of their own money on caregiving. Paying for rent, utilities, food, clothing or medical expenses all adds up. If you don’t live nearby, the cost of travelling creates additional costs.
Caring for someone with dementia? Double that amount.
Being able to access the financial resources of the person you are caring for, is fraught with problems. First, are you able to do that? Second, will there be any accusations of elder financial abuse? If there are siblings who are not involved with the care, will they question those expenses?
Most of the time, there’s one person in the family who takes control. If the loved ones have not done any planning, they need to designate who is going to be the power of attorney and who is going to manage the estate, when they’re gone. It should ideally be one person who is running things. However, the financial burden should never fall on any one person. Find ways in which everyone can pitch in.
You’ll need to know about any benefits the person is receiving. If they are a veteran, what will they be eligible for through Veteran Aid and Attendance benefits? Most people don’t know about those benefits, but they may be available.
If the person you are caring for is still able to do so, make sure to have the caregiver designated as a power of attorney. Contact the banks, utilities, and others where bills are being paid to ensure that they understand that a family member has been given authorization to deal with their accounts. Sometimes a phone call will do, but sometimes documents need to be prepared.
Find the different sources of income to make sure you are maximizing what the person has before the family starts pitching in. What if they have a long-term care insurance policy but the kids don’t know about it? Get all the information before you start spending.
Speak with an estate planning attorney and plan for incapacity in advance. Do an audit of the person’s financial resources, the benefits that may be available and any insurance policies they own. The estate planning attorney will be able to guide you through the process.
Reference: The Motley Fool (Sep. 13, 2018) “The High Cost of being an Elderly Relative’s Caregiver”
Suggested Key Terms: Estate Plan, Incapacity, Caregiving, Power of Attorney, Long-Term Care Insurance, Veterans Benefits