Set the Right Tone—Anticipate that it could be an emotionally charged conversation, so keep the focus on the care recipient’s needs (“quality of life” instead of dollar amounts). Emphasize your concern for his or her well-being. As caregiver, you want to make sure he or she has enough resources to provide adequate care and cover unforeseen circumstances.
Explain Why Proper Planning Will Help your loved one, as well as the family. For instance, without a will, some assets could be taxed in unexpected ways, tied up in probate court, or taken from the family. His or her wishes may not be able to be carried out without legal documentation.
Keep Things Nonconfrontational—It should never seem like the purpose of the discussion is to find out if you will get your share! Avoid statements such as “You should…” Let him or her maintain control—the goal is to protect what your loved one has accumulated and use it wisely—not to take over.
Look for Appropriate Openings if you’re having trouble getting the conversation started. Appropriate occasions might be tax time (if you’re helping to file a loved one’s taxes or working on your own), when paying bills, or after an annual meeting with a financial advisor, for instance.
Arrange a Family Meeting to Discuss the Situation if other siblings are involved, but do not gang up on a parent. Designate one person to initiate the conversation.
Involve a Financial Advisor to be a liaison between parties if necessary.
Use Other People’s Experiences as a Conversation Starter—E.g., “Did you hear about …? His kids were left with a huge financial/legal mess. We should try to avoid that situation.”
Do Some One-Stop Shopping—If you’ve consulted an attorney about discussing end-of-life/medical wishes, it may also be the time to create a will or living trust and appoint a financial power of attorney to handle day-to-day finances. This is often a family member, but it could be an attorney or bank officer.
Contact the Area Office on Aging if you are finding it impossible to initiate these discussions (typically found in every state, by county). These agencies have social workers on staff, as well as volunteers, who can help facilitate discussions and provide advice on when to establish financial control.
It’s important to not only do a financial assessment (current assets, income, expenses), but also estimate the costs of long-term care, including home care or assisted living facilities. This can be tricky because it involves making guesses about how long someone might live and what type of disabilities he or she might develop. While it’s impossible to predict the future, you can make educated projections by doing some research on the costs of care options and assessing current health conditions, as well as family history.
As with legal documents, financial information should be kept in a binder or electronic file for easy access, and all parties involved should have copies.
Similar to legal issues, when asked the majority of folks (75 percent) agree that it’s important to talk about retirement expenses, eldercare, and estate planning, but only 44 percent have had detailed discussions, according to a recent study by Fidelity Investments. In addition, nearly two-thirds of families disagree about the right time for such conversations. The National Endowment for Financial Education found that 70 percent of adults have difficulty talking to their families about who will make financial decisions on behalf of aging family members who have become unable to handle their money.
When to Step In
Sometimes it’s difficult for caregivers to determine when the care recipient needs help managing money. A loved one might be physically impaired but mentally sharp and, as mentioned, highly protective of his or her finances. There are some signs, however, that caregivers can watch for that may indicate it’s time to step in:
When in doubt, caregivers can begin small by offering to help pay bills and balance the checkbook, which may be welcomed by someone who has not been responsible for finances. The next step might be assisting a loved one with creating a budget, which can alleviate some financial stress. However, it’s important to keep the care recipient informed and involved with financial decisions whenever possible. For instance, you may review monthly bank statements together or have him or her sit with you while you pay the bills. Obviously, for those caring for a loved one with dementia, Alzheimer’s, or other cognitive disorders, handling the finances is a must.
Seeking Guardianship
Perhaps the most difficult caregiver situation results when a loved one loses the ability to think clearly and make decisions on his or her own, whether from dementia, Alzheimer’s, or other illness/trauma. When the person for whom you are caring is no longer able to make rational decisions about health care, safety, finances, or other aspects of life, it may be necessary to seek guardianship. Guardianship is an option when the person does not already have a power of attorney in place (yet another reason to prepare these documents before a crisis). It may also become necessary when there is disagreement among family members about how to care for a person.
When it comes to both financial and healthcare planning, the most important thing to remember is that a person must be “of sound mind” when preparing legal documents. Once a person becomes incapacitated, it is too late to specify wishes. Therefore, the best time to have these conversations and create the necessary documentation is before a health crisis occurs. When these documents are not in place, a caregiver may have to seek legal guardianship (see “Seeking Guardianship”).
To become someone’s legal guardian, you must have the care recipient declared incompetent in a court of law, usually based on expert testimony and evidence that the person is no longer able to make rational decisions. If the person is found mentally incompetent, the court transfers the responsibility for managing living arrangements, medical decisions, and finances to a legally appointed guardian. In some cases, more than one guardian may be appointed. For example, one person may handle finances, while another takes care of medical decisions.
The process can be