Handling the Cost of Caregiving

With the challenges and rewards of providing care for an aging parent or other adult often comes financial hardship.

Larger Expenses, Lower Income
Caregiving can involve the costs of food, board, medical care and prescription drugs, non-medical assistance and special accommodations for the care recipient. And for many families, increased expenses are met with lower incomes. Of caregivers surveyed, nearly one-fourth either gave up work entirely, took a leave of absence, cut their hours or took a less demanding job in order to meet the demands of caregiving.*

Be sure to consider the effect on your income-earning capacity when taking on the role of caregiver. Here are some other suggestions for managing the financial toll:

• Plan ahead. Start looking at alternatives before the individual needs care. Consider how much care the person will need, whether you can provide it at home and whether professional in-home or nursing home care is necessary.
  
  
• Review financial resources. Does the care recipient have adequate health insurance? Long-term care insurance? Is he or she eligible for Medicare or Medicaid? If you bear most of the financial burden, how do you plan to cover expenses? Will other family members contribute?
  
  
• Initiate financial strategies. If at all possible, look at long-term care insurance before the need arises. Review gifting strategies with the individual, but remember that assets cannot be given away simply to become eligible for Medicaid.
  
  
• Draft legal documents. The care recipient should have a durable power of attorney, living will, health care proxy and will.
  
  
• Review investments. Review the asset allocation of investments that will be used to cover expenses. Consider shifting most of the assets into income-producing investments and cash equivalents rather than stocks.
  
  
• Discuss tax strategy. You and your tax advisor should review tax breaks for long-term care premiums and benefits. You may also be able to claim the individual as a dependent on your income tax return if you provide more than half their support and satisfy other IRS requirements.
  
  
• Be mindful of your needs. Don't sacrifice the financial well being of yourself and your family. This is especially crucial if you, like 41% of caregivers, are caring for children under age 18 at the same time you are caring for an elderly individual.*

We Can Help
The use of estate planning strategies such as trusts can help protect assets and provide income for a loved one's care. One of our trust professionals will be happy to meet with you to discuss the options.

***Source: National Alliance for Caregiving Web site, www.caregiving.org.

For More Information
Contact these organizations to learn more about financial and other caregiving benefits and assistance:

• Social Security Administration, 1-800-772-1213, www.ssa.gov
• Medicare, 1-800-638-6833, www.medicare.gov
• American Association of Retired Persons, 1-800-424-3410, www.aarp.org
  
  

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