If you are facing a loved one receiving care other than that provided by a family member, get ready for sticker shock. The average nursing home giving what is called critical care is in excess of $35,000 per year depending on where the care is given. Alzheimer's care can cost even more. It may also come as a shock that the government does not pay for this even if the loved one is on Medicare. If the family can prove the loved one has almost no money then they may qualify for Medicaid, but that is not an easy thing to do and many facilities do not take Medicaid patients. Care is expensive. That brings up several points that need discussing.
When money is involved, the only way to avoid misunderstanding is to have a clear understanding. Far too often the family blithely assumes "When the time comes, I am sure everyone will do their part." But no one defines what is involved in the general term "part." Most often families do not even check to see what kind of costs are involved. Quite often the children have no idea what the parents are able to pay. Asking them about such things is far too intimate and embarrassing. Not asking well in advance can mean the family misses the opportunity to purchase long-term care insurance until the parents are too old for that to be economically feasible.
Someone in each family has to be the bold one who will take the long look and insist that the family discuss these issues as far ahead of need as possible. Calling the family together for this discussion will not be easy. The parents may be reluctant and even resistant to the idea. They may not want to divulge information about their financial situation and may well feel like they are not old enough to even consider such a thing. Often the children will find it hard to broach the subject to their parents, and will feel like the parents finances are none of their business. There may even be a fear that some of the family might think they are just wanting to know what they will inherit. Even with all of these barriers and difficulties, nothing could possibly be smarter than for a family to take a hard look at the future long before the future takes a bite out of them.
The financial issues can best be explored with the consultation of an elder care attorney or a financial adviser who specializes in planning for aging needs. An attorney who is well trained in aging issues can help a family walk through all of the financial mazes and often save the family more than the cost of their services. A financial adviser can lay the ground work for sensible expenditure of funds and help avoid unnecessary taxation. Getting the financial house in order and avoiding later conflicts is certainly worth the cost if the family can afford it at all.
Too often families do not stop and look at the total financial picture they face. They just figure out how to pay for what is right in front of them and figure they will cross the rest of the bridges when they come to them. This can lead to not only some financial disasters but some major family conflicts.
The night before my mother-in-law had by-pass surgery, we had a notary public in her hospital room transferring everything she owned into my wife's name. We had not had any family meetings in advance of need, and the need for surgery caught us by surprise. We did the only thing we knew to do at the time. This type of action is an open invitation for a family squabble. It did not happen in our case because my wife's brother and sister were kept informed and they are wonderful people. All it would have taken was for one of them to begin wondering where all the money was going and how much of it my wife might be using for her own needs or pleasures and the fight would have started.
We did not have any struggle with the family but it took five years to get the IRS to understand our bookkeeping and not hold us responsible for taxes we did not owe. We became convinced there must be a better way to handle the finances than what we did.
I not only think a family should develop a financial agreement for the care, I think they need to sign it. That sounds drastic, but you have not heard the horror stories I have heard nor been caught in the middle of the family squabbles I have been called to referee. These fights did not all come from weird or dysfunctional families. I have watched some wonderful families be torn apart over these issues. I know siblings that never spoke to each other again over disagreements involving very small amounts of money. When money is involved, the only way to avoid misunderstanding is to have an understanding.
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