Taking care of an elderly family member or relative has great cost to the caregiver…both emotionally and economically. Regardless of the particular situation, there is a great deal of time and stress that is thrust upon the caregiver when caring for an elderly loved one. And unless you or a member of your family has gone through it, it is hard to describe.
And depending on the type of illness or incapacity that accompanies the situation, there is significantly more time and energy involved in caring for an elderly loved one. Often time’s people focus on area or the other, either the emotional strain or the economic hardship it can place on an individual. But there are other issues that arise in addition to time, emotions, and economics. There is also the impact it can have on the caregiver’s family…which can also be significant. All of this together makes for an incredibly expensive “cost” to the caregiver and those around them.
The family member who becomes a primary caregiver for a loved one is doing a wonderful thing, says The Motley Fool in the article “The High Cost of being aan Elderly Relative’s Caregiver.” However, they should go into this relationship knowing what the cost will be in terms of time, energy, emotions and money. That includes a frank conversation with other family money, which is not an easy discussion to have.
Caregivers spend about $7,000 a year out of their own money on caregiving. This includes the basic costs of paying for rent, utilities, food, clothing or medical expenses…it all adds up. If you don’t live nearby, the cost of travelling creates additional costs as well as time.
And if you happen to be caring for someone with dementia you can easily double that amount.
Being able to access the financial resources of the person you are caring for can be fraught with problems. First, are you able to do access their funds to cover these expenses? Second, will there be any accusations of elder financial abuse from others in the family or friends? If there are siblings, who are not involved with the care, will they question those expenses? And how did you arrive at a certain number to figure what the expenses should be? Lots of questions arise when it comes to caring for an elderly loved one.
Most of the time there is one person in the family who steps up and takes control. If the loved ones have not done any planning, they need to designate who is going to be the power of attorney and who is going to manage the estate when they’re gone. It often times makes sense to have the person running everything be the one who is the power of attorney to allocate the appropriate funds. However, the financial burden should never fall on just one person. This is a much bigger issue than one person can usually handle so it is important to find ways in which everyone can help out in some way.
A critical first step is to find out if there are any benefits the person being cared for is currently receiving. For example, if they are a veteran, what will they be eligible for through Veteran Aid and Attendance benefits? Most people don’t know about those benefits yet they may be available.
Second, if the person you are caring for is still capable of making rational decisions, make sure they have the caregiver designated as a power of attorney. Contact the banks, utilities, and other institutions where bills are being paid to ensure that they understand that a family member has been given authorization to deal with their accounts. Sometimes a phone call will do but more often they will need documents to be prepared in advance of releasing any funds.
Third, find out what different sources of income are currently contributing funds to the person today. Make sure you are maximizing what the person has before the family starts pitching in.
Fourth, determine if they have a long-term care insurance policy and get the specific details of how it can be used since there is no one standard. Get all the information before you start spending and of the loved ones money so you can make sure you use OPM (other people’s money) before the money of the elderly loved one.
Finally, set up a meeting and speak with an estate planning attorney and start making plans for incapacity in advance. Do an audit of the person’s financial resources, the benefits that may be available, and any insurance policies they own. The estate planning attorney will be able to guide you through the process. They can give you a checklist and help you determine what is in place and what needs to be in place to effectively care for your loved one. With proper planning, at least some of the administrative and economic burden may be lessened…then you just need to deal with the emotional side of caregiving…which can often times be more stressful than all the other elements combined.