We would all like our parents to live long, healthy, independent lives. However, the reality is that although many of our parents will live long lives, most will not be able to stay healthy and independent forever. In fact, 70% of people over age 65 will need long term care during their lifetimes. Unfortunately, we cannot turn the clock back for our parents, but we can help them plan for the future. And the truth of the matter is that although planning is important for our parents, it is even more essential for us, the children, who are often left with an ailing parent and no game plan. Here is a brief overview of how to get started:
- Gather basic information:
- Ask for a list of all doctors, estate planning lawyers, accountants, and financial planners that your parents have used with contact information.
- Gather copies of financial records, insurance policies and any legal documents that have been prepared for your parents including wills, trusts, and powers of attorney.
- Start asking important questions like:
- In the event your parents’ health declines, would any children or relatives be willing and available to help? How many days and hours a week. Would a child or relative consider moving in with the parents or having the parents move in with him/her?
- What financial resources do your parents have to pay for care? What income will they be taking in each month through pensions, annuities, social security, etc. and what savings will be available?
- Make sure your parents have essential up-to-date estate planning documents like a Last Will and Testament, Financial Power of Attorney and Health Care Power of Attorney.
- If your parents would need nursing home care, would they have the financial resources to pay or would it quickly deplete their savings? The average annual cost of a nursing home room in the Cleveland Metropolitan area is $73,912.50.
Medicaid provides free long-term care as long as certain income and resource requirements are met. However, because Medicaid’s resource limit is so low (currently $1,500) without proper planning, your parents will have to deplete all their resources before they can qualify. There are many planning opportunities available in order to not only preserve as much of your parents’ savings as possible but also to improve the financial situation of your parents’ spouse, should they need long term care.