How to Handle Aging Parents and Finances

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.

How to Handle Aging Parents and Finances

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.

All about how phone scams hurt finances of our aging parents

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.

Financial Care For Elderly

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.  

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Are Nursing Homes A Safe Haven For The Elderly

Caring for elderly parents or grandparents in a private home setting requires patience, love, and a strong will. Unlike children, though some are like children, adults have a sense of independence, yet are dependent on the caregiver. Once healthy and self-sufficient, they are vulnerable and helpless, in need of care from family members. It causes not only the caregiver grief, but the one being cared for is often confused and can’t accept their condition. Nursing homes may be an option you are considering.

Are Nursing Homes A Safe Haven For The Elderly cover picture

In-home elderly care usually falls on the shoulders of one family member. In the beginning, other family members may assist and give the initial caregiver time off.

Are Nursing Homes A Safe Haven For The Elderly

Still, as time progresses from weeks to months and possibly years, other personal activities tend to override the importance of sharing in the task, often leaving no other choice but putting the loved one in a nursing home. Without family support, it is nearly impossible to spend twenty-four hours, seven days a week meeting the needs required for the elderly person.

Until the early 1900s, people managed to take full responsibility for elderly parents or grandparents. However, many of the caregivers were less fortunate, living in impoverished conditions. Thus, almshouses and poor farms were instituted. Many thought it best to place their loved ones in such a place to get the care they needed.

A Little History Lesson

The almshouses were supported strictly by charity donations and were for those who were no longer productive and needed a place to stay. On the other hand, the poor houses, or at times referred to as poor farms, were at the beginning established to house paupers who were caught stealing.

The poor house is not to be confused with the paupers prison. The farms were supported by taxpayers, similar to the modern-day welfare system. Amongst the residents of such institutions were thieves, the mentally ill, orphans, and the elderly.

Eventually, the government decided that housing those with an array of distinct needs together was inappropriate, and the farms soon became known as “old folks homes.”

When should a person go to a nursing home?

Not until 1935 were changes made in favor of the elderly when President Franklin D. Roosevelt signed the bill for Social Security benefits. Those who were already housed in one of the facilities, however, were not eligible for the benefits.

The benefits were only for retired individuals and did not include the poor. Soon after the signing of the bill, homes were opened for those who had income, such as Social Security, with the mindset that the home’s proprietors could benefit from the payments.

Government Regulations Taking Effect

In the mid-1950s, the government took a stand against those homes which were taking money from the residents, yet care was rated very poor. The government passed a bill that required all such facilities to be licensed through the government.

In that case, not only did the proprietors make a substantial income, the government would benefit from the cost of licensing a vast number of “old folks homes.”

During the 1960s, the government passed the Moss Amendment after a mass nursing home scandal broke out in New York State. The Moss Amendment was to prohibit below-level standards of care and stop fraudulent activities.

After several years of investigation, Medicare was initiated in 1969, a program established to assist those who were on Social Security, met the low-income standard and were either elderly or handicapped.

Again, in 1971, the government became involved with the nursing homes, which were no longer a welfare system but, due to the licensing process, considered to be part of the health care system, and modeled after a hospital setting.

The care received in nursing homes was supposed to be the same quality that a patient gets in a hospital. However, due to the many scandals that once again took place in the seventies, it seemed that government involvement had not improved the establishments’ bad habits but gave them an even greater opportunity to play a fraudulent game with the resident’s Medicare and Social Security benefits.

Why do elderly not like nursing homes?

Balancing Finances for Care

Today, in modern nursing home facilities, the government has cut Medicare payments to homes, allowing them only a percentage of the patient’s income. The homes are paid according to the Balanced Budget Act.

The patient, by no means, gets the greater part. The residents are permitted to have $1,500.00 in their personal accounts that are in the nursing home banks. Should that amount exceed that which is allowed, the patient’s family must do a “spend-down” to bring the account back to an allotted amount of that mentioned.

It is often difficult to spend a large amount of money on those who are confined to a nursing home. However, if the payment is not spent on the resident, with receipted proof, the state acquires the money at the time of the patient’s death.

7 Ways to Choose a Nursing Home

This can be a very difficult step for both you AND your aging parent. We have a checklist for you to help make the process a little easier.

Nursing home checklist

We have a FREE Printable here for you :

Make Sure You Oversee Things

Over the years, since the poor house syndrome, many things have changed as far as modern daycare, building appearance, and food. However, even though there have been stricter laws applied, the nursing staff does not give much better care in the days past. The rate of nursing home abuse and neglect is astronomical. Most modern-day facilities are understaffed, and lacking in heartfelt compassion.

To many who work as nurses and nurses aides, it is nothing more than an eight-hour job. Constant observation from family members is imperative. Notice any unusual behavior the patient may have. Check their skin for bruises.

It is our responsibility to report unexpected “falls” or bruises that happen too often. Reporting incidents to the nursing home is not always the best option. It may become necessary to report to a local Ombudsman organization if mistreatment is suspected.

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