Q: What if my parent or spouse doesn’t have long-term-care insurance?
A: “Taking an inventory of your loved one’s assets may help you find sources of money to help cover caregiving costs,” suggests Ross. Could they afford to move into an assisted living facility? What other assets or resources might they be able to draw upon to cover such ongoing expenses as a home health aide or a large one-time expense like a stair lift? Try to avoid tapping your own retirement funds. “If you shortchange your financial future, you could inadvertently become a financial burden to your own family,” adds Ross.
Q: Is Medicaid an answer?
A: Eligibility for coverage under Medicaid, the largest public payer of long-term care in the U.S., is determined by a combination of state and federal rules. In general, assets must be reduced to a set limit in order to qualify, with federal “spousal impoverishment” rules protecting the healthy spouse from having to spend down all of the couple’s assets to pay for nursing home care. “An elder-law attorney could help you and your spouse or parents navigate these extremely complicated rules,” says Hutchins.
“People who aren’t familiar with Medicare and Medicaid regulations may be surprised to discover what is and isn’t covered—especially what isn’t. So it’s worth spending some time researching what these programs actually pay for,” adds Ross.
Q: What if my parents live far away?
A: Merrill clients can take advantage of a program provided through Broadspire Care Management, notes Ross. “It can help with the selection of a nursing home and coordinating benefits. It also offers caregiver training, and it will even monitor a relative’s care in a nursing home or other facility.” Check the Eldercare Locator, managed by the U.S. Administration on Aging, for local caregiving services, suggests Hutchins.
Q: What if I need to transfer management of a relative’s finances to myself or a trustee?
A: Taking responsibility for a parent's or spouse’s legal, medical and financial affairs will be easier if you're able to have this conversation while your loved one still has the cognitive ability to understand the situation. Make sure to review and update relevant legal documents, Hutchins advises, including a will, an advance medical directive (describing end-of-life treatment preferences), a durable power of attorney (which designates someone to make legal and financial decisions) and a health-care proxy (transferring legal authority for medical decisions).
You might also ask your advisor whether a trusteed individual retirement account (IRA) makes sense in your situation. With it, the financial institution you name as trustee can continue to provide professional investment management services, which include investing IRA assets, ensuring that required minimum distributions are made and paying bills, among other services. “It’s a valuable tool that can provide security in the event of incapacity,” says Ross.
Another important part of becoming a caregiver is making sure you take care of yourself. “Understand that you cannot bring your best self to your caregiving journey unless you are maintaining yourself,” Hutchins says. One last tip, she adds: Don’t be afraid to ask for help. “Caregivers go through a lot of stress. Taking advantage of community services such as adult day care or respite care can make a huge difference.”