ELITE ADVISOR BEST PRACTICES

Addressing Today’s Elder Care Issues - Part One

Ten key tactics for elite advisors and their clients and even their own parents

By Valentino Sabuco, CFP®, AEP®

Key Takeaways:

  • An aging population, combined with advancements in health care and technology, has brought elder care issues to the forefront of estate and financial planning.
  • When a client’s parents (or yours) need some form of assistance, be careful not to rush in and try to take total control of their lives.
  • Dealing with elder care matters is a growing specialty area that elite advisors may want to explore as a service line extension or by developing a support network with outside experts.


As we head full-steam into the Holiday season, there’s perhaps no time of year when family dynamics come into play more. More than 40 million Americans—13 percent of the U.S. population—are now over 65 years of age. This creates many new challenges, including how to deal with aging parents’ care. And this situation is becoming more prevalent as baby boomers advance in years and as technology helps us live longer. Here are some thoughts, insights and strategies to consider for clients in that situation and for you to consider with regard to your own parents.

1. Don’t rush in
When parents need assistance, the first instinct may be to come in and take total control. However, doing so may rob the parents of dignity and self-respect and create tension. Instead, you should try to understand the situation and what options are currently available today and for the near future—and most important, what the parents really want.

Besides inadvertently hurting feelings and possibly causing resentment, barging in may start a cycle leading to depression and other emotional and physical health problems. The objective here should be to help the parents of your clients keep as much control over their lives as possible.

2. Think things through
If your clients have children at home, make sure they’re careful about turning a two-generation home into a three-generation residence; this may be the wrong move for everyone involved.

Elderly people generally want to remain in their own homes. Besides living in comfortable, familiar surroundings, they want to be near friends and their usual everyday activities. If you are working and have children at school, elderly parents may find themselves alone in someone else’s house day after day.

Just as parents have their routines, so do your clients and their children. Having other people in the home, even though they are loved ones, may be difficult, and there will be less privacy for everyone.

Spouses may consider giving up a job or switching from full-time to part-time work to help take care of aging parents. Make sure clients don’t underestimate what this stress can do to a marriage. It may be better to hire outside help instead. Financially, cutting back on a job has a short-term effect on income and a long-term effect on retirement savings. Run the numbers for your clients, and don’t sugarcoat the truth.

3. Assess the medical situation
Usually, it’s a physical or mental impairment that creates the need for long-term care. As soon as possible, make sure your clients get advice on the care their parents need. A visit to the parents’ personal physician is the best place to start.

It’s usually a good idea to get a second medical opinion on surgeries or drug treatments. A geriatric specialist may be needed to help make this assessment. Many hospitals have geriatric screening programs to assess the medical needs of the elderly. Consider:

a. The current levels of monitoring required, including administering medication, supervising physical therapy, etc.

b. The timing and extent of expected changes in the parents’ mental and physical conditions over the next six months, one year, three years, and five to ten years. The changes expected in the coming months and years can greatly influence where parents might eventually live (their home, nursing home, assisted living facility or with a family member).

4. Assess personal preferences
Parents’ desire to retain control over their lives may be as important as the kind of care that’s affordable and available to them.

For many elderly people, the urge to keep their privacy and independence is so strong that they want only minimal assistance while staying in their homes. Others welcome as much assistance as possible and feel more secure in a controlled environment that is outside their home. No two situations are alike. But staying geographically close to friends can also be an important factor in an elderly person’s general well-being.

Transportation for parents is a vital link to health care as well as to day-to-day necessities such as grocery shopping. If your clients’ parents need assistance obtaining transportation services, have them contact the local agency on aging or consult the Elder Care Locator (online at http://www.eldercare.gov/Eldercare.NET/Public/Index.aspx or by phone at 800-677-1116).

5. Assess the financial situation
Make sure that you and your clients are aware of the parents’ financial and insurance situations. Ask clients and/or their parents for a current inventory of what they own and owe. If they don’t have an inventory, assist them in putting one together.

Ask clients and their parents where they keep their important documents. Find out if they have up-to-date estate planning documents—wills, possibly trusts, durable powers of attorney for property management or an advance health care directive. If they don’t, encourage them to get these documents in place; otherwise, financial matters can get quite messy.

Paperwork can be reduced by making sure parents arrange for direct deposit of Social Security, pension or other payments into their accounts and by arranging for certain bills to be paid automatically. If elderly parents can keep control of credit cards and checks, their checkbook and paid bills should be reviewed periodically to see if anything looks out of the ordinary (e.g., an individual’s name or a company that is not recognized and shows big or recurring payments, or if a bill has been paid more than once). It is also important to check parents’ mail to make sure bills are being paid on time and that parents aren’t receiving past-due notices.

Your clients may face another dilemma—handling the paperwork around medical bills. It takes time and expertise to keep track of what’s being billed, paid and allowed. Insurance policies also have lifetime limits and copayments.

Your clients may need to hire someone who specializes in handling health insurance claims. For information on hiring a claims assistance professional in your area, contact the Alliance of Claims Assistance Professionals online at www.claims.org.

Suggest to your clients that they videotape their parents’ possessions and prepare a written list. This can be used by the parents’ insurance company in case anything is stolen, and it’s also a great deterrent to misappropriation.

Conclusion

Whether it’s a matter of finance, health, independence or geography, eldercare is an increasingly important issue for record numbers of Americans. Be thankful for what you and your family have this Holiday season, but heed the advice we’ve shared here. Next time, we’ll share five more tactics that savvy advisors and their clients are using to manage complex eldercare issues.


About the Author

Valentino Sabuco, CFP®, AEP®, is the executive director and publisher of The Financial Awareness Foundation, a 501(c)(3) nonprofit located in Sonoma County California. Valentino has pioneered the financial planning profession for over 40 years. TFAF serves as a nonpolitical and neutral “financial awareness advocate” for the public, the professionals and their associations, educational institutions, and nonprofits. Our mission is to significantly help solve a major social problem by dealing with the lack of financial awareness and financial literacy. We believe teaching financial literacy is very important as it gives people the essential tools to address everyday financial decisions in a more informed manner. Valentino can be reached at V.Sabuco@TheFinancialAwarenessFoundation.org or (707) 586-8620.