Some families are very open and honest about finances while others are “funny about money” and are reticent, or even refuse to discuss their finances with their adult children.
Money itself isn’t funny, but people’s attitudes towards money often are. In home care, we see it all…from those who need minimal care but request live-in assistance because they can afford it and are worth it…to those who need constant supervision and assistance with the activities daily living, have the resources, yet refuse to spend money on themselves.
Obviously money is a very sensitive subject that affects people’s decisions about fiscal planning. Money is a hot-button issue, especially for older people because it symbolizes their life’s work, financial independence, and the threat of the loss of their role as head of the household. When an adult child becomes involved with an aging parent regarding financial planning, attitudes can diverge.
I recently heard a quote from a Baby Boomer that struck me as both amusing and true. He said, “I’m not going to fly Coach so my kids can fly First Class.”
This is a far cry from the Depression-era mentality of an earlier generation and only time will tell how the Boomers handle the aging process and the deft financial balance it requires. Generally speaking, it seems the Boomers fall into two categories. They either encourage their parents to spend money on themselves, or if the Boomers are strapped financially or have “counted” on an inheritance to improve their own quality of life, often discourage the spending of assets.
If there is an opportunity for early planning and a frank and forthright conversation can occur with all parties, there are ways to achieve both financial independence for health care needs in later years AND leave a legacy for one’s family.
At Freedom Home Healthcare, we provide complimentary social work services to help families develop a plan which involves safety for the client, fiscal responsibility, and as much independence and control for the older adult as possible.
If assets are available, there are multiple options. One possible asset protection plan involves the purchasing of a term care insurance policy. Many of the adult children of our clients at Freedom currently have or will purchase a plan for themselves. After experiencing the emotional and financial costs of caring for their aging parents, they wish to eliminate this burden for their own children, while retaining responsibility for their own health care needs in later life.
I know of a son-in-law who purchased a long-term care policy for his mother-in-law to protect his own assets. He believes that his mother-in-law will need care someday, won’t be able to afford it, and he would rather pay the insurance premiums than run the risk of huge out-of-pocket expenses depleting his resources.
Another asset protection strategy is the creation of a life insurance trust. In this scenario, an eldercare attorney prepares a trust, which has a life insurance policy for the benefit of the heirs. This allows for the transfer of wealth outside the estate, but also permits the spending of savings on home care or other medical needs, knowing that there is a guaranteed inheritance for one’s heirs.
There is no better time to have “the conversation” about eldercare planning than NOW!
–Candy Blau, MA
Senior Client Relations Director, Freedom Home Healthcare