role reversal: your aging parents and you · position to make decisions later when your parents may...

F O R Y O U R R E T I R E M E N T

F O R Y O U R L I F E

F O R Y O U R B U S I N E S S

Role Reversal: Your Aging Parents and You

What’s inside

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What’s inside

Getting Started—Initiate a Dialogue . . . . . . . . . . . . . . . . . . . . . . . . . .2

Devising a Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

Legal Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

Housing Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

Paying for Health Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

Other Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11

Helpful Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12

What’s inside

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Role Reversal: Your Aging Parents and You

We all grow older, it’s inevitable. Today, many individuals

struggle to balance the needs of their growing family

and aging parents. Since more people are living longer, more adult

children find themselves assuming responsibility for aging parents.

Even if your parents plan to live at a facility for active seniors, they

may need help deciding when that will be and monitoring lifestyle

issues until that day comes. That is when you can be of assistance

in providing an objective perspective and youthful energy to

accomplish the tasks that must be completed.

F O R Y O U R R E T I R E M E N T

F O R Y O U R L I F E

F O R Y O U R B U S I N E S S

2 Role Reversal: Your Aging Parents and You Role Reversal: Your Aging Parents and You 3

Getting Started—Initiate a Dialogue

Talking with your mom or dad about their living situation and the possible need

for change is not always easy. A successful conversation depends upon the

relationship you have with your parents, as well as your parents’ mental,

emotional, and physical condition. Many people put off serious conversations

to avoid conflict or awkwardness.

Reasons to Do it Now

Many individuals wince at the prospect of getting involved in their parents’

money matters. However, consider the following benefits of doing so:

n It is better to talk while your parents can still have input.

n Your parents might be unexpectedly relieved at not having to

handle their affairs alone.

n A child who gets involved before a parent’s mental faculties deteriorate

can help avoid their guardianship battles.

Suggestions for Conversations With Your Parents

To the extent possible, talk with your parents gently and honestly about their

wishes, their abilities, and their options. These conversations put you in a better

position to make decisions later when your parents may not be able to do so.

n Share your own feelings and reassure your parents that you will support

and help them.

n Help your parents retain whatever control is possible when making his

or her own decisions. Respect and try to honor their wishes wherever feasible.

n Encourage the smallest change possible at each step so that your parents

are more able to adjust to the change.

n Educate yourself on legal, financial, and medical matters that pertain

to your parents as background for your conversations.

Respect your own needs and be honest with your parents about your time

and energy limits.

2 Role Reversal: Your Aging Parents and You Role Reversal: Your Aging Parents and You 3

Making the Conversation Non-Confrontational

Getting together won’t do any good unless a conversation takes place. The

following phrases are non-confrontational and can help you get the ball rolling:

n “I have started to formulate plans in the event something happens to me .

What about you?” Personalizing the situation and letting your parents know

that you are making plans for yourself allows them to see that you are thinking

about your own family.

n “What health care measures do you want performed and who should make

decisions when you can’t?” Asking this question allows a discussion to begin

without “money” being the primary topic.

n “Have you put your ‘final’ wishes in writing?” This simple question is one of

the best conversation starters. It’s not about “who” or “how much,” just what

your parents want to happen.

n “What steps would you like to take to make sure mom/dad is cared for after

you’re gone?” This question changes the conversation from “What am I gonna

get?” to “I’m concerned about mom/dad’s well-being.”

n “What would you like to have happen to the (insert illiquid asset here)?”

Talking about family heirlooms, rather than money, is a much better

conversation starter.

Devising a Plan

Taking Stock of Assets

Most parents avoid discussing money with their children. Even so, if they’re willing

to talk about it, the first step is finding out what your parents have and what they

need. Once you have established your parents’ net worth (asset minus liabilities,

including debt), you should calculate future monthly income and expenses—both

best-case and worst-case scenarios.

Naming Beneficiaries

It’s a good bet that your parents haven’t updated their wills in decades. Double-

checking wills and beneficiary designations, in regard to life insurance policies and

retirement accounts, can reveal how much their wishes may have changed over

the years.

Did You Know…You are not alone. Nearly 20 million

Americans—now known as the sandwich

generation—are raising kids or supporting

an adult child while providing financial

support to an aging parent.1

1. eArticles.com, “Sandwich Generation and Boomers, Same Thing?”, April 2011.

4 Role Reversal: Your Aging Parents and You

Working With a Financial Professional

Increasingly, adult children are turning to professionals for assistance with their

parents‘ care—especially if they live far away or if family members disagree on the

parents‘ condition and needs. Professional help can be costly, but mistakes can cost

much more financially and emotionally.

A financial professional may help to potentially increase income, cut taxes, reduce

risk, and simplify record keeping. When evaluating needs, a financial professional

working with the client’s other professionals, such as an attorney and tax advisor,

may also consider:

n Asset availability

n Income sources

n Expenses (present and future)

n Financial management

n Insurance coverage and limitations

n Real estate needs

n Legal concerns

n Lifestyle interests

n Directives for medical care

Avoiding Probate

Probate is the court process of transferring property upon a person’s death. One

way your parents may avoid the cost and exposure to probate could be by placing

their assets in a living trust. They give up no control over their assets, yet can be

certain that their estates are settled quickly and confidentially after they die. A

living trust can also ensure their affairs are managed as intended if they become

incapacitated. Other options may be available and you should consult with a legal,

tax, and/or financial professional who may help your parents decide which estate

planning option is best for them.

Knowing all of your parents’ needs and resources is important before making any

major financial changes. Financial decisions generally should be holistic in nature,

recognizing that everyone—parents and children—all have different needs and

resources, unique to their particular situation.

Role Reversal: Your Aging Parents and You 5

Legal Considerations

If a parent becomes mentally incapacitated, it may be necessary for you to step

in to take care of their affairs. Advanced planning by both you and your parents

will help facilitate this process. You and your parents should discuss naming

you as their representative through a power of attorney to conduct business—

banking, signing financial documents, buying and selling investments, real estate

management, and other duties—on their behalf.

Power of Attorney

A power of attorney is a legal instrument that is used to delegate legal authority.

The person who signs (executes) a power of attorney is called the principal.

The power of attorney gives legal authority to another person (called an agent) to

make property, financial, and other legal decisions for the principal. The power of

attorney may be general or limited, for a definite or indefinite period of time. As

long as the principal remains competent they may change or end the power of

attorney at any time.

Durable Power of Attorney

A durable power of attorney is important if the principal becomes incapacitated.

A durable power of attorney is designed to survive disability or incompetence and is

an important alternative to guardianship, conservatorship, or trusteeship. Laws vary

from state to state, so it is important that a durable power of attorney be drawn up

by an attorney licensed to practice in the state in which your parents reside.

Health Care Power of Attorney

Also called a medical power of attorney or health care proxy, this durable power

of attorney is for health care (as opposed to financial) issues. It authorizes you

or another family member to make health care decisions for your parents in the

event they are unable to make such decisions for themselves. Without such a

document, many health care providers and institutions will make critical decisions,

not necessarily based on what your parents would want.

Helpful Resource…The best route to getting a power of

attorney and other legal advice is to

consult an elder law attorney. Contact

the National Academy of Elder Law

Attorneys (naela.org) for a

qualified elder law attorney referral.


Advance Directive

An advance directive is a legal document, written in advance of an incapacitating

illness, that allows your parents to state their preferences about medical care.

Living Will

One type of advance directive is commony called a “living will.” A living will

instructs a doctor, hospital, or medical provider whether or not, and to what

extent, to administer life-sustaining procedures if your parents should become

incompetent or unable to communicate their wishes. If your parents do not want

extraordinary means taken for nutrition or hydration, many state laws require that

they say so in the document. Be certain to check state laws as each state has its

own limitations.

Last Will and Testament

Whereas the living will deals with health care issues, a Last Will and Testament

directs the disposition of your parents‘ financial and legal affairs after death. A

will protects assets and helps minimize the chances of your parents‘ estate being

contested. Without one, it is likely their estate will be distributed in accordance with

state law and not necessarily as your parents would choose.

Other Legal Considerations

n Estate planning . If your parents have established a relationship with an estate

lawyer, organize a three-way meeting. Such a meeting has benefits for both you

and your parents. If the family lacks an estate lawyer, you can search for legal

specialists by geographic area via the “lawyer locator” at martindale.com.

n Joint property or joint investment accounts . This may be the simplest way

to ensure that you or another family member will be able to handle your parents‘

affairs if they become unable to do so. There are, however, financial and tax

consequences to such an arrangement. No one should enter into such an arrange-

ment without checking all the implications with an attorney and tax advisor.

n Guardianship or conservatorship . The legal mechanism by which a court

declares a person incompetent and appoints a guardian. The court transfers

the responsibility for managing financial affairs, living arrangements, and medical

decisions to the guardian. This procedure can take some time, usually when

time is a critical factor.

Did you know…A health care power of attorney and

living will are not substitutes for each

other. With a health care power of attorney

(or health care proxy) your parent desig-

nates a trusted person to make vital

health-related decisions on their behalf,

while in a living will they are expressing

their wishes that life-prolonging measures

be discontinued when there is no hope of

ultimate recovery.


Housing Options

Staying Put. Your parents are probably accustomed to living on their own and

would like to live in their own home for as long as possible. If they do stay in their

own home, they may require certain services such as:

n Home care services are available in many communities and provide appropriate,

supervised personnel to help older persons with either health care (giving

medications, changing dressings, etc.) or personal care (bathing, dressing,

and grooming).

n Meals and transportation may be available to help retain independence.

Group or home-delivered meal programs help ensure an adequate diet.

n Adult day care is similar to child day care. The person goes to a community

facility daily for two or three days per week. Activities include exercise programs,

singing, guest lectures, and current events discussions.

n Respite care brings a trained person into the home to give the full-time caregiver

time off to get a haircut, visit the dentist, or take a vacation.

If your parents remain in their own home, there are several safety features to

consider. The following is a safety-tip checklist when conducting a home safety

walk-through:

❏ Check electrical and telephone cords and safely tuck the cords

out of walkways.

❏ Ensure rugs, runners, and mats are secured by non-slip backing

or adhesive tape.

❏ Test smoke detectors.

❏ Install handrails on both sides of stairways and in the bath or shower.

❏ Make sure porches, hallways, and stairwells are well illuminated.

❏ Clear stairs, landings, and floors of clutter.

❏ Write an emergency exit plan and review it with your parents.

Did You Know…Meals-On-Wheels programs are available

in most parts of the United States. A number

of communities offer door-to-door trans-

portation services to help people get to

and from medical facilities, community

facilities, and other services. For more

information, visit the Meals-On-Wheels

Association at mowaa.org.


Nursing Home Facilities

If your parents are not capable of independent living, a nursing home may be an

option. Nursing homes offer two levels of care—skilled nursing and intermediate

care—depending on your parents’ needs. Some nursing homes offer both levels of

care at a single site.

n Skilled nursing facilities provide 24-hour nursing services for people who have

serious health care needs but do not require the intense level of care provided in

a hospital. Rehabilitation services may also be provided.

n Intermediate care facilities provide less extensive health care than skilled nursing

facilities. Nursing and rehabilitation services are provided, but not on a 24-hour basis.

These facilities are for people who cannot live alone, but need minimum medical

assistance and help with personal and/or social care.

Other Housing Options

There are several types of retirement communities that provide living arrangements

and services to meet the needs of both independent seniors and those who need

assistance. They range from full-service communities to pay-as-you-go facilities.

n Life care or continuing care communities typically provide a continuum of care

from independent living to nursing home care on the premises. The individual must

be independent when they enter the community. These communities generally

require an entrance fee and monthly service fee. Residents usually get one meal

a day in a dining room, maid service, linen service, maintenance, and transportation

to shopping and cultural events, travel planning, and a pull cord to an emergency

nurse. If nursing care is needed, it may be provided at no extra cost.

n Assisted living communities are rental retirement communities for independent

seniors who need some assistance. Generally, they provide a homelike atmosphere,

three meals a day, maid, linen, and laundry service, availability of a registered nurse,

and many personal care services in an all-inclusive rent.

n Adult congregate communities are designed for persons age 55 and older.

Residents buy co-ops or condominiums and typically pay a monthly fee for

grass mowing, leaf raking, and snow shoveling. A pay-as-you-go medical center

is generally on site and a nurse is typically on duty 24-hours a day to make home

visits in emergencies.


n Rental retirement communities with fee-for-service nursing units may charge

residents an entrance fee plus monthly rent. When the need for nursing care

arises, residents may pay an extra daily fee and stay in a nursing unit.

n Veterans Administration (VA) nursing home care provides care to eligible

veterans. Veterans with chronic conditions, including dementia, requiring

rehabilitation or short-term specialized services, or those who need comfort and

care at the end of life are served in VA nursing home care units. Most VA nursing

home care units provide short-term, restorative, and rehabilitative care. Longer-

term care is available for veterans who meet eligibility criteria and/or require

end-of-life care. Prolonged care for those who are unable to sustain placement

in a community nursing home, or who lack a clinically appropriate community

alternative is also available for those who qualify. The majority of VA nursing

home care units are located on the campus of VA Medical Centers throughout the

United States. More information is available on the U.S. Department of Veterans

Affairs website at va.gov.

Paying for Health Care

Health care costs are a major expense for most seniors. What cost $100 for

medical care in 2000, cost $148 in 2010. A parent’s need for daily care can create

financial hardship for families. The average annual cost for an assisted-living facility

is $39,516.2 The national average price of a private room at a nursing home is

$79,935.3 In larger cities, nursing home costs can exceed $100,000.3

2. 2010 MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services, and Home Care Costs, October 2010.

3. New York Life Insurance Company, 2009.

4. Bureau of Labor Statistics, January 2000 to August 2010.

$100

$110

$120

$130

$140

$150

2009 20102000 2001 2002 2003 2004 2005 2006 2007 2008

Consumer Price Index Medical Care

$148

$126

2009 2010000 2001 2002 2003 2004 2005 2006 2007 20080 2009 2010000 2001 2002 2003 2004 2005 2006 2007 2008

DO

LLA

RS

Health Care Expenses Rise Faster Than Inflation4

Did you know…Similar to assited living communities,

assisted living facilities provide residents

with assistance with basic ADLs (activities

of daily living) such as bathing, grooming,

dressing, and more. Some states also allow

assisted living facilities to offer medication

assistance and/or reminders. Assisted living

facilities differ from nursing homes in that

they don’t offer complex medical services.

For more information on assisted living, visit:

n assistedlivinginfo.com,

n assistedlivingsource.com,

n or the National Center for Assisted Living

(NCAL) at ncal.org.


Medicare

Medicare is a federal health insurance program, which helps defray many of the

medical expenses of most Americans over the age of 65. Medicare has four parts:

n (Part A) Hospital Insurance helps pay the cost of inpatient hospital care. The

number of hospital days Medicare pays is governed by a system based upon

patient diagnosis and medical necessity for hospital care. Medicare does not pay

for custodial care or nursing home care. It will, however, cover up to 60 days in

a nursing home as part of convalescence after hospitalization.

n (Part B) Medical Insurance pays for many medically necessary doctors’

services, outpatient services, and some other medical services. Participants

pay a monthly premium.

n (Part C) Medicare Advantage pays for services of Medicare managed care plans

(MMO, PPO, or PFFS).

n (Part D) Prescription Drug Program provides prescription coverage to everyone

with Medicare, regardless of income, health status, or how an individual pays for

prescription drugs today.

Medicaid

The Medicaid program provides medical benefits for people with low income,

few or no resources, or no or inadequate medical insurance. Although the federal

government establishes general guidelines for the program, the Medicaid program

requirements are actually established by each state. Whether or not a person is

eligible for Medicaid will depend on the state where he or she lives.


Other Insurance

Employer Insurance

Some companies provide health care insurance to retirees. If your parents are

retired, check with their prior employer’s human resources department to see

what is available.

Medigap

Medigap is privately purchased supplemental health insurance. It is designed to help

cover some of the gaps in Medicare coverage, but does not cover long-term care

services. Purchasing additional insurance allows the policyholder access to a greater

choice of facilities without dipping into personal financial resources.

Supplemental Health Insurance

Supplemental health insurance pays a cash benefit to the insured. The amount of

cash and how it is paid out depends on the supplemental health insurance plan or

policy. Some popular supplemental health insurance policies are specific disease

insurance, such as for cancer, accidental death and dismemberment insurance or

accident health insurance, and hospital indemnity insurance.

Veterans Insurance

The Department of Veterans Affairs, state, and local government agencies offer

veterans and their families health care services. To find out if your parent is

eligible, log on to the U.S. Department of Veterans Affairs web site at va.gov.

Helpful Hint…Study Medigap policies carefully to be

sure they provide the protection needed

and do not duplicate other health insurance.


Helpful Resources5

n aplaceformom .com—This free eldercare referral service’s web site has tips on

what to look for when visiting facilities.

n ec-online .net—An internet community for those providing eldercare.

n elderlifeplanning .com—Offers support and resources for caregivers, including

information about long-term care, home health care, and insurance. The site also

contains a discussion forum and a database of eldercare professionals.

n familycaregiversonline .com—Features a thorough section on home safety,

including fall prevention.

n homeinstead .com—Offers a database of in-home care and assistance providers

located throughout North America. Providers are bonded and insured, covered by

workers’ compensation insurance, and have passed a criminal background check.

n National Association of Geriatric Care Managers—The goal of this nonprofit

professional association of practitioners is the advancement of dignified care for

the elderly and their families.

Additional Reading5

n The Complete Eldercare Planner: Where to Start, Which Questions to Ask, and

How to Find Help, by Joy Loverde, Times Books, 2000.

n The Fearless Caregiver: How to Get the Best Care for Your Loved One and Still

Have a Life of Your Own, by Gary Barg, Capital Books Inc., 2001.

n How Did I Become My Parent’s Parent?, by Harriet Sarnoff Schiff, Penguin USA, 1997.

n You and Your Aging Parent: A Family Guide to Emotional, Physical, & Financial

Problems, by Barbara Silverstone and Helen Kandel Hyman, Pantheon Books, 1990.

5. Neither New York Life Insurance Company, nor its affliates, control these web sites or books. New York Life Insurance Company is not responsible for the content of the materials or operation of the web sites. By accessing these materials, you agree to use them at your own risk and according to their terms and conditions.

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role reversal: your aging parents and you · position to make decisions later when your parents may...

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