Every year, individuals across the country (and around the world for that matter) come to the sudden realization that not only do they need to get a plan in place for their own retirement and end-of-life care, they may also have to plan on how to care for their own aging parents. This can be a heavy burden to carry, and one that must be undertaken with a great love and sober thinking. If you are creating an estate plan that takes aging parents into consideration, a little careful preparation can go a long way.
Planning to care for another person as they age requires people to be very realistic about available assets and the anticipated costs that will be part of elder care. The very first step to take is to make a financial plan that accounts for all of these factors for both yourself and the elder you anticipate supporting. You will want to create a monthly budget that accounts for your income and expenses, to see what you really have and what you need, and where you may be able to trim some fat.
Once an operating budget is in place, you know exactly what you have to work with. You should then proceed to identify any major expenses that you anticipate arising in the next three to five years, and intentionally begin to save for those big-ticket items if they cannot be paid for out-of-pocket. Also make sure that you have a complete understanding of relevant insurances for yourself and your parent, and what is and is not covered in those policies.
Depending on the value of your parent’s estate, he or she may be eligible for various kinds of elder assistance. By doing some homework on what your parent may qualify to receive, you can find enormous savings. Eligibility varies based on many factors, like age, income, assets, health factors, and others.
These suggestions take a very complex issue and paint it with an extremely broad brush. There are numerous specifics that may affect your situation that will become illuminated as you begin to dig in and familiarize yourself with the territory. If you are feeling overwhelmed, or simply want to make sure you’re making the wisest use of your assets, the guidance of an experienced attorney can help ensure that you are taking the wisest steps for both yourself and your parent.
Source: PBS, “Caring for your parents,” accessed Nov. 03, 2016