Getting parents' money, medical house in order

Eileen Ambrose -- Personal Finance

April 04, 2010|By Eileen Ambrose Personal finance

As a financial planner, Christopher Brown's job is helping clients prepare to pay for retirement, college for their kids and the unexpected. But even he was caught off-guard earlier this year when his 75-year-old father was hospitalized.

The elder Brown has been the caregiver for his 80-year-old wife, who has osteoporosis. Suddenly, the son was dealing with his parents' financial and health care issues, while raising his own family and running his Rockville business.

"When this happened to me, my aunt said, 'Welcome to the sandwich generation. You just took a big bite out of it,' " the 47-year-old says.

Millions of others have found themselves playing a similar role. An AARP survey a few years ago estimated that 44.4 million Americans are taking care of another adult, often an elderly parent or other relative. That number isn't likely to drop, given today's longer life expectancy. Baby boomers and GenXers - the oldest now in their 40s - are going to have to confront how to care for aging parents who might live well into their 80s, 90s and beyond.

Money issues often are difficult for family members to talk about. Throw in illness, long-term care and death, and it's a discussion that parents and their adult children often try to avoid.

"There is never going to be a good time to do this, but there is going to be a bad time," Brown says. "The bad time is when there is a crisis in the family."

Indeed, parents are more likely to be threatened if children wait until a medical emergency to broach the subject of finances and long-term care, says Howard Gleckman, author of "Caring for Our Parents." When parents fall ill, "they become terrified of losing their independence," says Gleckman, who has cared for his father and father-in-law.

Instead, children can raise the subject by inviting parents on a trip to a lawyer's office so all of them can have the necessary health care and financial papers drawn up at the same time, suggests Gleckman.

Or, he says, a child can appeal to one parent to get the finances and documents in order to help the other. "You can say, 'Let's do it for Mom. What if you die?' " Gleckman says.

Brown's situation offers some insights. He had discussed financial matters with his parents before, so it wasn't uncomfortable raising the subject recently. Still, there were things he didn't know.

He wasn't sure of the details of their long-term care policies. And though he was listed as someone who can access their safe-deposit box, the financial planner didn't know the location of the key and the bank branch that held the box.

Nor was he fully aware of all the medications his parents took. And he needed his parents to fill out privacy authorization forms with all the physicians so that he could get their test results or other medical information.

Brown's father has recovered and is expected home this week, but the financial work isn't done.

"I feel like in some ways I've been give a second chance to dot the i's and cross the t's," the planner says. "And a lot of people don't get that chance."

On the list of things to do: update estate planning documents.

Like many married couples, Brown's parents named each other - 15 years ago - to handle the medical and financial affairs when necessary. But now, with their health failing, those documents need updating so he can take on that responsibility, Brown says.

And while Brown knows where his parents want to be buried, he needs to find out whether the plots have been paid for.

To help aging parents in Maryland, you need at least two documents: an advance directive and a power of attorney for financial matters.

The Maryland advance directive has two parts. First, it allows parents to name an agent to make health care decisions for them if they are incapacitated. The other part is often referred to as a living will, in which parents can spell out their medical wishes if they are ever in a persistent vegetative state or terminally ill.

Medical records are private under federal law. The advance directive also can include language that will give the health care agent access to a patient's medical information, says Victoria Sulerzyski, a Baltimore estate and trust lawyer.

Maryland's attorney general posts advance directive forms online at oag.state.md.us that you can fill out and sign before the appropriate witnesses.

With the power of attorney, parents can choose a trusted individual to make financial decisions for them if they are incapacitated, such as paying bills or selling property.

One problem is that banks often don't accept the power of attorney if it's not drawn up on their forms, advocates for seniors complain. Sulerzyski says she has had to write to banks or contact their lawyers to get the institutions to honor the power of attorney.

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