Planning for long-term care and end-of-life issues

In the best of all situations, helping an older relative or a parent plan for long-term care and other end-of-life issues happens when they’re healthy and various options can be considered with adequate time to do so. Unfortunately, events can sometimes intervene and make an elder’s need for assistance an emergency.

This is why it’s so important for adult children and younger relatives to gather up the courage and preparation to begin a series of important conversations when elders are healthy. Once stricken, older relatives may be unable to understand questions or express their wishes in proper detail. If there is no plan, family members grasp at responsibilities – or shirk them – without any idea of what the older relative would really want.

These talks actually should go far beyond money. There should be discussions about independence and basic preferences for the way individuals want to live or die. Demographers believe that with the rising number of single Americans – those divorced or never married — these conversations will become increasingly complicated as they fall to nieces and nephews, younger friends or designated representatives.

Want to avoid a worst-case scenario? Start the conversation now. Here are some ideas:

Start with the most important priorities:  Maybe this first conversation isn’t just about where the will or health care power of attorney is, though you’ll eventually have to get to that. Maybe this conversation is about you noticing that a parent or loved one is moving slower, is more forgetful, is clearly looking like their health has taken a turn for the worse – and maybe that’s why you want to know where the will is. Jumping into money issues first is usually a mistake. Deal with immediate health and lifestyle issues first.

Prepare your questions in advance: When a parent or relative is unconscious or unresponsive, the younger relative is immediately in the drivers’ seat. That’s why it’s critical to make a list of questions for the elderly relative to answer in detail while they have the capacity to address them. The basics: Where important papers are, how household expenses are paid, who doctors and specialists are, what medicines are being taken and whether there’s a will, an advanced directive and a funeral plan (and money or insurance proceeds to pay for it). There may be dozens more questions beyond these based on your family’s personal circumstances. But in creating this list, ask yourself: “What do I need to know if my family member suddenly becomes sick or dies?”

Turn the conversation to affording long-term care: One of the greatest continuing fallacies about long-term care is that Medicare pays for it – it pays for a significant amount of medical care associated with it, but not for the actual cost of home-based or nursing home-based care. In 2009, private room nursing home care averaged more than $60,000 a year. Long-term care insurance is something that should be purchased in one’s 50s for the best chance at affordability, but the conversation needs to be a mixture of preferences and finances. If an elder cannot afford top-quality care, families need to plan alternatives, especially if it means pitching in.

Be patient:  In some families, having a successful financial discussion means several attempts and some frustration. Don’t become angry or frustrated if this happens. Just keep starting the conversation until it catches on. It might make sense to say something like, “You’ve always been so independent, Mom. I just want you to give us the right instructions so we do exactly what you want.”

Offer to get some qualified advice: If you don’t fully understand your relative’s financial affairs, it might make sense for you both to talk to an attorney or a tax or financial advisor. A qualified advisor can help you straighten out whatever confusion exists and can help you put specific legal documents in place and set up ways to pay medical and household bills if they’re unable to do so. If you can, involve your elder in that conversation – an impartial third party can sometimes move things along. Above all, an elder should have a current will and health power of attorney documents in place – either making or reviewing those documents can be a good starting point for making sure other necessary plans are in place.

Plan a caregiving strategy together: You should discuss the relative’s preferences and trigger points for various stages of health care. An individual always wants to stay in his or her home, but you should have an honest discussion about how much you can do at home as a caregiver and whether various services (home health aide, geriatric care manager, assisted living) should be introduced at various stages. Talking through what a parent will be able to live with at various health stages, and putting that information in writing, will save plenty of doubt and bitterness later.

Discuss what should happen with the home: If an elderly relative becomes sick and irreversibly incapacitated, the equity in his or her home may come under consideration as a resource to pay uncovered medical or household maintenance. Since the home is both a major asset and an emotional focal point, it’s best to get good advice and spell out specifically what the elderly relative wants done with his property and under what conditions.

Make sure everyone knows the plan: Once you settle on a strategy, make sure all family and friends understand the plan and their assignments.

Gary Williams, a Certified Financial Planner practitioner and Chartered Retirement Planning Counselor with Williams Asset Management in Columbia, is a registered representative of Commonwealth Financial Network, a member firm of the NASD/SIPC. He can be reached at (410) 740-0220 or at [email protected].