Ouch – aging parents and finances. One of the most critical stages of taking care of your elderly parents is when it comes to their finances, as they are on a mission not to let anyone in their personal business.
They always try to keep their sense of independence when it comes to this aspect of their lives. Many of them believe that since they worked for their money, it is only fair they get to spend it how they wish.
What happens when they reach the stage they can’t keep a steady record of their spending, and the money keeps going down?
Aging Parents and Finances
Of course, it means their children or trusted caregivers have to step in and try to keep everything together before getting worse. But, one has to be mindful that it is a sensitive issue and should be addressed with lots of caution.
Who Is Financially Responsible For Elderly Parents?
When it comes to their aging parents, many children try to avoid taking on their parents’ full responsibilities in avoiding the troubles of tackling their duties with their family and put their parents on board.
What if we should tell you that there are select states that outline children to take on their parents’ responsibilities – especially if they can’t afford it themselves. We understand providing food, clothing, shelter, and the other necessities of life should be a priority, but what about other areas such as taking care of their medical bills?
These thirty states have a filial law that dictates that children basically “pay up” when the need arises for their parent’s basic living conditions to be fulfilled.
If the responsibility lies on you and you refuse to pay, there could be a lawsuit waiting for you to tackle in the court of law. Therefore, the best option is to set up a retirement plan for your parents to help them offset their living costs as they get older.
How Do I Get Control Over My Aging Parents Finances?
It is not the easiest task to get your aging parents to hand over the running of their finances to someone else as they feel that’s the main thing they have rights to. But, we have to admit that it is pretty risky when they are getting older to make them have full control as they might not fully keep track of all their spending.
As they age and their mental health deteriorates, it is hard to manage their day-to-day financial activities, and if not careful, identity theft could be a major issue. Here are a few ways you can approach to take control legally…
Talk About It
Many older folks fail to admit they are not as proactive as when they were younger, which is where the problem is. So, setting a suitable time to talk it over with them would go a long way. Also, it is best to talk things over with them before anything serious happens.
Let your aging parents know the rationale behind why you are doing what you’re doing and how much it will benefit them. You can also let them know the dangers if their financial information is exposed.
What is the Best Option To Take
If explaining to your parents the situation and deciding to let you handle things for them, you should try to go the legal way to have everything going right. You can either opt for…
Power of Attorney
A power of attorney allows you to make legal decisions on behalf of your loved ones related to their money and property. Your parents can revoke this decision once they can manage things on their own.
However, an attorney’s power does not give the right to handle everything but most select items outlined in the document. If a power of attorney is not revoked, it goes straight up until they die.
Guardian of Property
If the court understands your relative can no longer efficiently manage their finances and properties after medical assessment, they might appoint a property guardian on their behalf. Also, it could be you are appointed their guardian, who gives you the right to handle everything about their health and other personal decisions.
Living Trust Trustee
There is also the option to create a living trust which covers all assets to which the senior might permit you to make decisions on their behalf. However, you need to fully understand how a living trust works as it has some legal implications should anything go against the detailed instructions.
They can put limited assets under the trust, but outside of that bond cannot be controlled by the trustee.
Understand How Elderly Finances Work
Once you are legally bound to any of the options outlined above, you become a fiduciary. By this, you can only act accordingly in the senior’s best interest. Bear in mind, it is still their money and assets, and you are only managing it on their behalf.
Inform Them About Scams
Scams play on one’s emotions heavily, and even those who are mentally stable can fall victim sometimes. It is important to have a serious talk with your loved ones about this critical issue as if they are not careful, they could see all their funds being depleted at the hands of criminals.
You can offer to help them avoid scams but still be mindful not to invade their personal space and override their authority.
Honor Their Wishes
Once again, we have to stress that the money belongs to the seniors, and they have all rights to it. Therefore, to help them manage their finances, you have to be mindful of their wishes and interests.
Does Assisted Living Take All Your Money?
For a fact, some assisted living does cost a lot…sometimes up to $150 per day. However, it does not necessarily take away all your money unless you didn’t manage to save up enough to take care of yourself during your senior years.
Based on published records, many seniors have a drawback when it comes to assisted living, especially for the misconception that is in the air. Even though expensive at times, it does not take away all your savings as there are legal ways to protect your assets.
Having a secured plan and putting measures in place to protect your assets will save you a lot from the idea of these facilities getting into your finances.
How Can I Hide Money From a Nursing Home?
Many people believe that nursing homes will take away their assets and money once they move in. However, you can protect your own by taking a few steps to secure your assets before you move in. Some of these measures include…
1. Gift Your Loved Ones Monetary Gifts Before You Get Sick
To say you will have to move into a nursing home is far from your mind as you cannot know before it actually happens. If you are concerned about them digging into your finances, you can start by gifting some of your finances to your loved ones. This will help secure your finances as they would basically be holding on to it for you until you need it for other uses.
2. Let Your Attorney Draft A “Life Estate” For Your Real Estate
A life estate allows you to remain owner of your property until you die while entrusting it to your loved ones after. You can do this a few years before you get sick (even though you don’t know when it might happen), and you can be sure they are in good hands and away from nursing homes.
3. Transfer A Part Of Your Monthly Income To Your Spouse
Nursing homes generally watch your income, and they tend to use this as a way of trying to claim things from you. Reducing your salary by putting most of it to your spouse exempts these facilities from seizing your finances.
If by any chance, your spouse earns less than what the state usually exempts from tax, you could substitute the shortcoming with some from yours. This would be out of reach for these assisted living.
4. Put Your Assets In A “Pour-over” Trust
When you put your assets in a pour-over trust, it is safe from a seizure while you still have access to it. If you or your spouse should die first, you can be assured of your assets and finances being safe and protected in this trust. Also, you can assign another loved one to help you manage these trusts.
Here is a FREE printable checklist for you to help work over your parent’s finances – it works, I use it!
Does A Nursing Home Take Your Pension And Social Security?
Some nursing homes tend to take residents’ pension and social security checks to cover their living costs. However, some laws bar many of them from doing that. The request to have seniors’ pension payments and social security checks sent directly to the homes can be rejected by the seniors themselves and assign someone to control it for them.
How Much Money Can You Keep When Going Into A Nursing Home?
Interestingly, many people who go into nursing homes can retain a certain amount of money with them and assets. For most states, there is a minimum amount of at least $2000 in assets when registering to get assisted living that patients can hold on to.
How Can I Pay For Assisted Living With No Money?
There are ways of paying for assisted living without money as many nursing homes accept using Medicaid for payments. Even though many could not necessarily get Medicaid due to earning a certain amount, things have changed and allowed more persons to apply. There is also insurance you could seek out to use as payment instead of cash and assets.
Will Social Security Pay For Assisted Living?
For the most part, some states allow you to pay for assisted living through social security and special options. Once patients meet the agency’s requirements, they will be able to cover the cost on their behalf.