Financial Issues for Caregivers
By Hilary Young
While caring for a loved one may seem like the better, cheaper alternative to assisted living, there are actually many financial issues to consider. Understanding these issues and knowing how to cope with them is vital because people are now living longer than ever before and many family members will eventually take on the role of caregiver.
According to a National Vital Statistics Report released in January 2014, Americans now have a life expectancy of 78.5 years. Whether that’s because of advancements in technology and research, better education, or just better genetics, a longer life can also mean a larger financial burden on families. To keep costs down, it is not uncommon for aging parents to expect their adult children to care for them.
In fact, it’s been estimated by the Caregiver Action Network that there are currently more than 65 million people in the U.S. who are caring for “a chronically ill, disabled, or aged family member or friend during any given year and spend an average of 20 hours per week providing care for their loved one.” They network estimates that the value of these free services totals over $375 billion a year.
Limit Your Liability
If you are tasked with handling finances and medical decisions for a loved one, it’s important to limit your liability by putting legal safeguards in place.
First, work on creating a living will with your loved one. A living will is an essential legal document that details your loved one’s wishes about his or her own healthcare, such as issuing a “Do Not Resuscitate” order, choosing a power of attorney who can make decisions for the patient should he or she be incapacitated, or simply a list of medical procedures the person does or does not want.
Consider applying for a court-appointed guardianship if your loved one is physically impaired, yet still capable, and requires the assistance of another person to care for daily needs and/or assets. According to the American Bar Association website, “a conservatorship may last for a definite or indefinite period of time and may be limited or unlimited. The appointment is voluntary, made upon the application of the individual, and preserves the individual’s legal competency.” A conservatorship usually is granted so that you can legally manage your loved one’s finances.
The association also recommends that you should consider applying for a guardianship should you feel as though your loved one is no longer capable of making decisions alone. A guardian has “the legal authority and duty to care for another’s person” and “may be limited or unlimited in scope and may cover the ward’s personal care, financial assets, or both.”
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