8.0 MIN READ
You may have heard of the “Sandwich Generation” (who are caring for both their kids and their parents), but those without kids are said to be part of an “open face sandwich” when caring for elderly family members. Childfree people are often expected to care for their parents and others as they don’t have children. It is not always fair, but it is something we need to plan for.
The first task is to set hard and fast boundaries for who you are willing to care for and what you are willing to do for them. Boundaries help to protect you and your life from being taken over. My wife and I have a hard boundary that no one comes to live with us. We are willing to help in other ways, but that is our boundary. Other people may be ok with family living with them, and that is fine. The key is to be clear from the start.
While setting boundaries, think about what skills you have and your capacity to care for others. Caregiver fatigue is real, and we are not all made for caregiving. You may need to plan to pay for professional caregivers (in your house or another location) or other support systems. If you are going to provide the care yourself, have a plan for how it will impact your career and income. It is not less caring to pay someone to care for your loved ones.
Get Their Paperwork Set
With boundaries set, you need to start collecting the necessary paperwork to provide support. The first step is to get copies of their will, living will, and powers of attorney. If they don’t have all of their paperwork done, then you may need to help them to make sure everything is set before they have any signs of cognitive decline. It is somewhat common for our elderly family members to keep all of this in a safe deposit box. The challenge is that when you need the paperwork, you may not have access to it. With their paperwork in hand, here are a few things to look at:
- Last Will and Testament – At this point, you should try to understand their wishes after they pass. This may include everything from who gets what to what funeral arrangements they may want. Look to see if anything in their will needs to be updated (such as changes in relationships, people who have passed, or other missing pieces). Also, note whom they appointed as the executor or executrix of their will.
- Living Will – There is a good chance you will need this documentation while caring for your loved one. A living will, or healthcare directive should outline what care they are looking for and who will make the medical decisions for them if they can’t. The person who is appointed as medical proxy should have a copy of the living will, and it should be on file with your family members’ physician. If you have siblings or other close family members, be sure to discuss who will be the medical proxy and making the final decisions. You don’t want to be arguing about medical decisions at your loved one’s bedside in the hospital.
- Power of Attorney – Depending on your State, this may be a springable and/or durable power of attorney. This document gives someone the power to make financial and/or business decisions for your family member. It is not always the same person who is the executor on the will or medical proxy. Make sure you understand who is the POA, what powers they (do or don’t have), and under what circumstances they can use that power.
People often think of the will, living will, and POA as covering most everything, but here are a few more documents to get in place:
- Beneficiaries – Work with your family member to check all of their beneficiaries on accounts and insurance policies. Accounts with a beneficiary (or transfer on death designee) pass outside the will, and there is no way to change them after they pass.
- Trusted Person – The person who is going to act as the financial POA should also be listed as a trusted person on all accounts. Most financial institutions have a process to list a trusted person whom they can contact if there are any questionable behaviors or actions on the account. Unfortunately, scams against elders are way too common, and the trusted person can be a bit of a speed bump to prevent scams.
- In Case I Die File (aka I Love You File) – This file needs to have all of the information that someone might need if your loved one is incapacitated or passes. It should include all accounts, locations of paperwork and funds, passwords, and everything needed to run the household. You may have to work on this file over time and dig deep. List important contacts, locations, and anything that might be forgotten over time.
This paperwork collection is just a start. The key is to collect as much as you can from your family member before any cognitive decline. For more about what to talk to them about, check out this article from Woman’s World.
Planning for Finances
With your own boundaries and your family member’s paperwork, you should be ready to create a financial plan for their elder years. This can be very difficult. You will need to have some hard conversations and determine if they will continue to manage their finances or hand them off to you. There are some big questions to answer:
- Where are they going to live?
- Who is going to pay for what?
- Can they afford long-term care?
- Can you afford to help them?
In practice, you will need to have two financial plans. One for your elderly family member and one for you. The challenge is that the goal of each of these plans is different. You may need to bring in an Advice-Only, Fee-Only, Fiduciary, CERTIFIED FINANCIAL PLANNER™ to help you through it all. I’m happy to help (and you can grab time on my calendar at https://calendly.com/coachdrjay/childfree ), but here are some steps to follow:
For Your Elderly Family Members’ Financial Plan:
- You need to understand the current state of their finances. What is their net worth? Do they have more debt than they owe? Do they have significant money that needs to be protected? Do you need to sell their house, business, or other properties?
- If they have a negative net worth (owe more than they own), then you will most likely need to have a plan to support them and will need to see what programs your State has for support. Medicaid is designed for people who do not have an income or net worth to pay for their long-term care and other medical expenses. Many states also have a department of aging or elder services with social workers and others who may be able to connect you to support (both caregivers and financial).
- If they have a positive net worth, you need a plan to protect that money and provide care for your family member. Work with a CFP® professional and an elder attorney to look at what options are available. Making smart decisions now may both allow the money to be used
- Be sure to do a deep dive into their insurances. Health insurance (which will most likely be Medicare) can be confusing, but you want to ensure they have the right coverage (and supplemental coverage). See if they have long-term care plans, life insurance, and any other insurance plans. It may be a bit of a challenge to get ahold of all of the policies, but you need them now before they can be used.
For Your Financial Plan:
- Determine what you can spend. You will most likely need to both spend cash out of pocket and commit a considerable amount of time to their care. Keep your boundaries strong. While you may want to give everything to your loved one, you need to protect yourself at the same time. You will need to make compromises, but as Jacy shares in her Portrait of Compromise, it can be a difficult balancing act.
- Look at alternatives to provide support. Depending on the health and age of your parents, you may want to look at paying for a long-term care insurance plan for them. You may also want to talk to your siblings about how they might be able to provide support.
- Determine if you need to change your housing. Are you going to move in with your loved one, or are they going to move in with you? Do you need to move closer to where they are? Do you need to make changes for accessibility to your house?
- How is caring for your elderly family member going to impact your goals? You will have to make some sacrifices, but it may still be possible to make progress towards your own goals. It is a challenge to find a balance, but with a good plan, you might be able to make progress.
To care for elderly family members, you need to build a support team. You need to be able to put your time and energy into caring for them, so everything you can offload to someone else allows you to reallocate your time.
Start by talking to your State or County’s office of aging or senior services. Often they will have a social worker or similar person who can help you with what resources are available. These resources may range from Meals on Wheels to nursing care and financial support. Apply for everything that they qualify for, and hopefully, it will take some weight off.
Here Are a Few Other Support People You May Need:
- Aging Care Manager (or Geriatric Care Manager) – While it can be difficult to find a good care manager, they are nearly worth their weight in gold. This is someone who can help with all of the medical coordination needed, including things like arranging appointments, caregivers, fighting with insurance, and more. If you have a long-term care insurance policy, they may provide a care manager. If not, check out the Aging Life Care Association at https://www.aginglifecare.org/
- Household help – It is time to get some help around the house to keep it clean and take care of the yard. Any time you can save is time you can put towards caring for your family member.
- Caregivers – There are a wide range of caregivers who can help. In some cases, you may need a licensed professional (such as a Registered Nurse), while other tasks could be handled by anyone. Network within your community to find caregivers or check out sites like Care.com https://www.care.com/.
- Elder Care Attorney – Elder law is complex and is its own specialty. You will most likely need an attorney to protect both you and your loved one at some point.
- CERTIFIED FINANCIAL PLANNER™ – At some point, you will also want to work with an Advice-Only, Fee-Only, Fiduciary, CFP® professional. This is someone who can help you with the financial plan and can work with the rest of your team to protect you and your loved one.
People tend to avoid getting help until it is almost too late. Caregiver fatigue is real, and you need to have a plan to protect yourself. It is just like they say in every airplane safety video; you must put your oxygen mask on first before helping others. Creating a plan and finding a team to help you is the same as putting your mask on first.
About the Author
Dr. Jay Zigmont, CFP®, and his wife are Childfree and live in Water Valley, MS. He has a PhD in Adult Learning from the University of Connecticut and is a CERTIFIED FINANCIAL PLANNER™. He is the founder of Childfree Wealth, a life and financial planning firm specializing in helping Childfree Individuals. https://childfreewealth.com
Did you know XYPN advisors provide virtual services? They can work with clients in any state! Find an Advisor.