Caring for an Aging Parent Checklist

Today we're welcoming Deborah M. Higgins, president of Higgins Capital Management Company. She will be writing a monthly blog post on the financial decisions now needed for older adults and particularly adult children now or planning to care for their parents and their own families.

With life expectancy rising, more and more of us are faced with elderly family members that need our help. I read recently that there are over 10 million adult children over 50 who are caring for aging parents. Many of us (if lucky) have just gotten our adult children out and on their own and are now faced with the caring of our parents or a combination of the two. Taking care of aging parents is one of life’s toughest responsibilities. Most of our parents are independent and fiercely fight to maintain that independence, even when it is no longer in their best interest. Dealing with aging parents is an adjustment for everyone involved and takes a toll emotionally, legally and financially.

I have worked as a financial advisor for close to 30 years. More and more of financial planning now includes not only retirement planning, but also the element of adult care planning. You have to look at the “big picture.” This can be daunting and leave you feeling overwhelmed.

In writing this monthly blog, I will address the financial planning aspects of caring for aging parents. The first thing you need to do is evaluate your parents’ needs and wishes. A great way to start is to talk with them and determine “what you’re dealing with.”

A checklist will give you an analysis of what you know and what you need to find out. I have included a checklist to get you started on the right path.

Options for Hiring an In-Home Caregiver

Yesterday we mentioned some of the risks of hiring an in-home caregiver, particularly if you opt to privately hire from public sources without doing a proper background check. Today we’re following up that post with one outlining options for the main types of caregivers. As with the last entry, the information is from a Health Care Reform Expo held last week in La Jolla and sponsored by local members of CAHSAH. This information comes from a presentation titled “A Pivotal Year for Health Care” given by Brittnei Salerno, president and CEO of La Jolla Nurses Homecare.


Option 1: Hiring a Caregiver Directly

This includes finding someone using online or newspaper ads or church and community bulletins. The cost to hire is low but risk is high.

• You are responsible for checking references and doing a complete background check. (By law in California, you can request one from the Department of Justice.)

• The patient, as the employer, is responsible for deducting payroll taxes and obtaining Workers’ Compensation Insurance.

• The patient does the hiring and the firing, which can be both awkward and difficult depending on circumstances.

• Be sure to tell the caregiver exactly what you expect of them and how they should be carried out.

Option 2: Hiring Through a Direct Referral Agency

The cost for using an agency is moderate and the risk is high.

• There typically is a fee to help the patient hire a caregiver

• The patient is the employer and responsible for supervision, payroll taxes and Workers’ Compensation Insurance

• If it doesn’t work out, the patient does the firing and must start the process to find a replacement

Option 3: Hiring Through a Full-Service Agency

The cost is moderate to high and the risk is low.

• The agency is the employer and takes care of the screening, hiring, firing and payroll

• The agency is liable for the caregivers’ actions while employed with them

• The agency finds a replacement if needed

• Caregivers may be eligible for employee benefits, such as health insurance and 401(k) retirement accounts

The Risks of Hiring a Caregiver

Last week in San Diego, a caregiver was charged with the murder of an 89-year-old Rancho Bernardo man who disappeared last fall. The case once again highlights how important it is to carefully screen and monitor in-home caregivers.

The percentage of seniors in need of ongoing assistance with daily living activities is expected to double by 2025, according to Brittnei Salerno, who spoke at a Health Care Reform Expo sponsored by local members of CAHSAH.

When a parent in particular requires more care than the family can manage on its own, a common course of action is to find an in-home caregiver so Mom and Dad can age in place. More than 50% find family members to help, while others privately hire someone through classified ads, church bulletins, word of mouth and other informal avenues. Still others use referral or employer-model agencies.

Most states, including California, have no licensing requirements for aide-level care.

The California Senate Office of Oversight and Outcomes examined private duty home care and found few Californians who hire caregivers on their own know they have a legal right to request a criminal background check through the Department of Justice.

During the state Senate committee examination they determined:

• More than 25% of caregivers from Craigslist and newspaper ads had previous criminal histories

• Crimes ranged from shoplifting and burglary to assaulting a patient and impersonating a registered nurse.

• Using 7 years’ worth of newspaper ads for caregivers, 64 had legal trouble from transgression on the job

• In 27% of those 64 cases, the caregiver had been previously convicted of a crime

• In 13 of those 17 cases, the old crimes mirrored the new crimes

Something else to consider is if the caregiving situation doesn’t work out. Hiring is easy; firing is not. Some are reluctant because they do not have a backup plan and others are fearful of retaliation.

Next Up: What to consider with various caregiver options

Alzheimer's Claims Another Icon

Today the world lost another icon when actor Peter Falk passed away. He'd had Alzheimer's disease for several years, according to his daughter.

Some of us who are old enough, welcomed Falk into our living rooms as we watched him solve murder mysteries in his own unique way on the long-running television series "Columbo." He also played a role in the iconic 1980s film The Princess Bride.

Some news reports mentioned a 2008 legal battle that began when Falk's daughter went to court seeking conservatorship once her father's dementia had progressed to a certain point. He apparently had named his wife legal guardian after he was first diagnosed with Alzheimer's disease.

The Falks' situation underscores the need for all families to decide on a course of action well before a parent or spouse is in need of a higher level of care. This includes legal preparations such as assigning power of attorney and preparing advanced health directives in the event they are needed. This is good advice for any family but especially so for those whose parents have begun to display signs of dementia.

How to Hold On To Your Property

The woman wanted to add her daughter to her bank accounts so she could pay her bills and have access to mom’s money in case of an emergency. So, against her attorney’s advice, she added the daughter to the accounts.

Then one day she discovered $67,000 was missing.

No, the daughter didn’t take it. The IRS did.

It turns out the daughter owed taxes to the federal government and once she became a co-signer, she also became a co-owner of those assets. The bank account was deemed community property and the elderly woman learned a valuable lesson on a common mistake senior citizens make as they advance in years and are reduced in health.

This was just one example La Jolla attorney Heidi Klippel told caregivers during last week’s Town Hall Forum. The topic was estate planning, and Klippel had plenty to say about the best ways to establish a legal decision maker and the documents needed for them to handle a parent’s finances once they can no longer do so.

“There’s a risk any time you put someone else on your asset,” she said.

That includes adding children to the title of your house.

The attorney related a client who put her daughter on the title to her house. The daughter was under insured when she was involved in a drunken driving crash and, as co-owner of the house by title, had the property seized to help pay a settlement, rendering both her and her mother homeless.

Instead of adding adult children to assets, Klippel suggests parents establish living trusts to “house” property and other assets as a way to avoid probate after they die. Trusts are established for specific reasons and provide the following benefits:

• Allow a designee (or “trustee”) to manage your assets should you become unable to do so yourself
• Avoid probate and transfer your assets immediately to your beneficiaries
• Reduce or at least provide for payment of estate taxes

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