8 Strategies for Caring for Your Elderly Parents

Members of more than one quarter of all families in the United States today are involved in some way in the care of their elderly parents. Taking steps to prepare for your parents’ future needs is not only important for your parents. It is important for you. 

  1. Make sure they have signed a Health Care Proxy and a Durable Power of Attorney
  2. Have a family discussion about care long before it is necessary to act. Explore the role the family will play. Will they want to stay at home? Move in with family members? Enter a residential facility? Discuss who will be sharing in the care giving responsibilities.
  3. Assess your parent’s finances and their own ability to pay for care. Obtain a listing of their assets, liabilities, and income (including Social Security payments, other retirement income and the account name and numbers into which they are deposited).
  4. Evaluate your parent’s medical and personal needs.
  5. Know who the doctor is and how to contact him or her. Determine if a geriatric assessment is necessary. Find out what medications are currently being taken, dosage and side effects.
  6. Find competent medical and geriatric care givers.
  7. Review medical coverage, prescription plans, Medicare, Medigap, Medicaid options.
  8. Explore the purchase of long term care policies.

 It is very important to discuss estate planning with your parents while they are both mentally and physically healthy. If they wait to make arrangements until after one of them is incapacitated in some way, their options will be seriously limited.

Patricia Annino is a nationally recognized authority on women and estate planning.  She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about.  For more visit:  www.patriciaannino.com

Estate Planning Myth #1 – Can You Protect Yourself While Alive!

Avoid Scarlett O’Hara’s Bad Estate Plan: ‘I’ll think about it tomorrow’ Overcome The Myth and Find the Reason to Plan

Taking that first step to putting your affairs in order is a challenge. Why is that so many of us work our entire lives to make sure that we are secure and that our families are well provided for yet put so little thought into what would happen if we become disabled or die.

Even Houdini could not escape death.

It is normal to avoid dealing with disability or death; yet vital that we push forward and take the necessary steps to safeguard what we have accomplished during our lives. Many of us rely on common myth that “Estate Planning I Only People Who are Richer than We Are” to prevent us to do what it takes to take that first step towards planning. That is not true.

Putting an estate in place is important no matter what your net worth is.

MYTH 1: Estate Planning is only to Protect Your Family When You Die.

Reason to Plan: Estate Planning Will Also Protect You While You Are Alive.

Estate planning today is far more than a Will. It addresses what happens if you become disabled or incapacitated. For most couples, their most significant assets will be frozen if they become disabled or incapacitated.  If a husband and wife own their home jointly with a right of survivorship at the death of the first spouse the ownership of that home will pass to the surviving spouse.  If instead, one of them becomes disabled or incapacitated and is unable to handle their financial affairs then the house is frozen-both signatures are required to transfer, sell, mortgage or deed the home. At death a retirement planning asset is paid to the named beneficiary-normally the spouse.  If instead, the plan holder becomes disabled or incapacitated that retirement plan is frozen as only the plan holder has the ability during lifetime to make decisions concerning investments, hardship withdrawals and emergency loans.  If you are single all of the assets in your name alone are frozen.

With proper estate planning you can select who should be in charge of your assets if you are alive and lose the ability to handle your own financial affairs.

You can put appropriate legal documents, such as a durable power of attorney and living trust in place with necessary safeguards.

Check back next week for Myth #2 Begin When You’re Young!  Having a challenge with the ins and outs of estate planning?  Just ask by leaving a comment below.

Will I Have Enough Money to Retire?

In my previous post Financial Vulnerabilities I asked you important questions to help you understand the facts you gathered regarding your spouse. Here in part three I continue to help you analyze and understand the facts.

Understand the Facts, Part 3

How will your children be supported if something happens to you and your husband? Live insurance on your life or if you are married, on your life and your husband’s life, owned by a trust for the benefit of your children, is the best way to cover this need. Since the children will not need the money forever, just until they reach their early twenties, a much smaller investment amount is needed. In order to provide $5,000 a month for 15 years, using the same assumptions as above, you would need an investment of $698,690.

What happens to those child support payments if your divorced husband dies? A good divorce decree requires enough life insurance on your former husband to cover not only the alimony payments, but also the child support payments, should he die before his obligation is over. You should be the owner and beneficiary of this policy.

How can you make sure you will have enough to retire?

The best advice is: by starting EARLY! Let’s say you need the same $10,000 per month, adjusted for inflation, to age 95, we have been talking about. Let’s say you have zero saved for retirement and you are 40 years old and want to retire at 65. How much would you have to save for retirement each month between now and age 65? $5,619. Now let’s say you are 50. You need to save $10,685 per month to be able to retire! So, start early and be consistent.

Take the time now to start saving for retirement. If you have any challenges or need additional information please feel free to comment below.

Check back next week for my post, Educate Yourself.  This will help you further analyze your financial situation.

Financial Vulnerabilities

In my previous post, How Much Money Do I Need I asked you important questions to help you understand the facts you gathered. Here in part two I continue to help you analyze and understand the facts.

Understand the Facts, Part 2

What if your husband died today, you are 50 years old and you need $10,000 a month to live on until you reach 85. Let’s also forget any pension plan benefits you might get. Ditto for Social Security. Let’s assume that you can earn 7% on your investments (7% net after tax is a very high number by the way) and that you want your income to keep pace with an assumed inflation rate of 3%. You would need to invest $2,363,990 to accomplish this goal. If you wanted to have the income stream last to age 95, instead of age 85, you would need $2,815,139.Although most people think they will spend less if their spouse dies I have never seen that to be true-when crisis strikes expenses mount. Travel increases-spending the holidays at home that first year may be too painful. Counseling bills are important. The desire to work decreases. Onetime expenses of administering the estate occur. Understand where the financial vulnerabilities are and work to solve them.

Do you know what you would need if your husband became permanently disabled?

Sadly, you would need MORE than if he died, because in the addition to your normal expenses there would be his medical bills and other costs associated with his disability. Group disability insurance might be available from his employer. Individual coverage is also available,  and you should get three proposals from three unrelated agents before making a decision. Tell the agent you want to get quotes only from companies with a “Comdex” rating of a least 90.

If your business partner dies will you lose the business? Yes, unless you have the ability to purchase the dead partner’s share of the business from his or her estate. The bomb-proof answer to this problem is a properly drafted buy-sell agreement funded with insurance-unless both partners have sufficient assets.

Take the time now to analyze your Financial Vulnerabilities. If you have any challenges or need additional information please feel free to comment below.

Check back next week for my post, Will I Have Enough Money to Retire.  This will help you analyze additional facts you have gathered.

Understanding the Facts

In an earlier post, Do I Have Enough Money, I outlined the first step, gathering the facts. In this post, I will help you to analyze and understand the facts.

Understand the Facts

Analyze your Financial Information. When you have all of that information gathered really take a cold, hard look at it-are there any surprises? Should you anticipate any surprises? What if your husband died? Would your income be sufficient to cover your expenses and your lifestyle? Do you need to create wealth in the short term? On average one million dollars, when prudently invested will generate about $50,000 of income. You will need three million dollars of life insurance to replace a shortfall of $150,000 in annuals income. When you are in the wealth building phase life insurance can be purchased so that if something happened before your assets build up wealth is available for the family.

If you are older and insurance is not a good option are you spending too much money?

Will your investments hold their value and sustain you through the duration of your lifetime? Should you make adjustments? There are all kinds of models and computer simulations available today to provide an answer. With the help of computerized mathematical tools, for example, a financial planner can program in your current and projected financial needs, you investment portfolio, and hundreds or thousands of market-condition scenarios to determine whether your investments will last throughout your expected lifetime. In the Monte Carlo simulation-one of the most popular-if your portfolio is run through 10,000 projected retirement scenarios and it shows it is sufficient 8,000 times, that means there is an 80 percent probability that your current portfolio will not run out of money. Then you must decide what your tolerance for risk is-how low the probability of running out of money must be in order to make you feel comfortable.

Take the time now to analyze your Financial Information. If you have any challenges or need additional information please feel free to comment below.

Check back next week for my post Financial Vulnerabilities. This will help you analyze additional facts you have gathered.

Do I Have Enough Money?

Estate planning is designed to help you create enough wealth to keep you and your loved ones financially secure. In an effort to empower you to plan your estate wisely, let’s start with some steps you can take now. 

Gather the Facts 

To plan you must know what the facts are. Gather your financial information and compile it two different ways. First, put together a listing of your assets-list each asset, how it is titled (in your name, jointly, in your husband’s name, in a trust) and its approximate value. Include in your list:

  • Real estate
  • Investments
  • Retirement plan
  • Annuities
  • I.R.A.s
  • Business interests
  • Valuable artwork and personal effects
  • Life insurance

Now list any debt-such as:

  • Mortgage
  • home equity loan
  • installment loans

Second, put together a list of your income:

  • Your salary
  • Your spouse’s salary
  • Investment income (whether you use it in your lifestyle or your reinvest it)
  • Passive income (from rental real estate or other investments)

Next list your expenses:

  • Mortgage
  •  Rent
  • real estate taxes
  • utilities
  • insurance 

Your lifestyle expenses:

  • travel
  • entertainment
  • style
  • beauty

Your anticipated expenses, such as:

  • tuition
  • long term care needs

Take the time now to prepare a complete list. If you have any challenges or need additional information please feel free to comment below.

Check back next week for my post, Understand the Facts.  This will help you analyze the facts you have gathered.