For many adult children, there will come a day when you need to help an aging loved one or family member with a disability manage their finances. It may be on a short-term basis while they are recovering from an illness or surgery, but it is just as likely that it will be on a more permanent basis. What do you need to know and do to be successful with this new responsibility?
Have the legal documents in place
In order to manage their finances, you will need to make sure they have the legal documents in place that give you the right to make decisions and take actions on their behalf. At a minimum, you need a copy of their living will,their health care power of attorney, and a power of attorney for financial decisions. These documents will allow you to pay their bills if needed and to make decisions on their behalf. If they don’t have these documents in place, it is important to have them done while they are still of sound mind to do so.
Create a family caregiving plan before you need it
Family members often find it difficult to discuss these issues with their loved one. Then a crisis happens and families are forced to second guess what their wishes might be. Talk with your loved one about what they want. Would they prefer to move to assisted living if they aren’t able to stay at home safely or would they want around the clock in-home care? Should you take out a reverse mortgage if they can’t afford care at home? These are just a few of the questions families should discuss. A care manager can help educate your family on what your options are and how much they typically cost.
Organize paperwork and permanent records
In addition to having a medical file for your loved one, make sure you help them organize other important, permanent documents. They typically include birth certificates, marriage license, death certificate of a spouse, power of attorney for health care and for finances, deed to their home, title to their car, deed for a cemetery plot, veteran’s discharge papers, insurance policies, investment statements, bank statements, and pension benefits.
Explore potential financial assistance programs
An aging parent who needs medical help or loved one with a disability might qualify for additional state or federal funds. Be sure to look in to programs like Social Security disability, Supplemental Security Income (SSI) disability programs, the Veteran’s Aid & Attendance benefit, Medicaid and more. The National Council on Aging has a free online tool called Benefits Checkup that is helpful in exploring options based on where your loved one resides.
Look for tax breaks for caregiving and health expenses
Make a point of keeping all of your receipts for the year for health and caregiving expenses, including mileage. Your tax preparer can help you figure out what you or your loved one might be able to deduct. Family caregivers often forget to claim expenses such as assisted living or modifications made to a home on behalf of a loved one with a disability.