Forming the Financial Team

Parents, grandparents, relatives...30 million American households provide unpaid care to an adult over the age of 50. Over the next 25 years, that number will double! As the population ages, the need for elder care will likely become equal to the need for child care.

Consider these facts:

• Four in ten adults are currently caregivers for a family member with health issues.
• Half of in-home caregivers perform medical or nursing procedures.
• The value of these “free” services is estimated at almost $400 billion a year.
• 46% of caregivers spend more than $5,000 a year of their own savings.

Even families that plan for eventual caregiving can be shocked by the cost of providing care. Andy Cohen, founder of, says “All across the country, adult children are paying for this just at the time when they should be saving for their own retirement.”

For people who face a sudden crisis with a parent or relative, finances become an urgent issue. Learning about skilled care, rehabilitation, in-home agencies, as well as establishing a strategy that covers payment for upcoming care, suddenly become necessary. Lives can get put on hold as families scramble to figure out the best way to care for their loved one.

If your family wasn’t previously able to discuss what to do in the event of a long-term care situation, there are several things that must be done as soon as possible:

1. Gather financial documents and health directives to determine assets. Use this checklist to assemble as much information as possible:

• Health Care Power of Attorney
• Durable Power of Attorney
• Health Insurance Policies
• If Medicare, any Supplemental Policies
• Veteran Benefits
• Long-term Care Policies
• Financial Assets: Checking, Savings, Investments
• Other Documents as advised

2. Determine bills and costs that need to be currently continued:

• Mortgage or Rent
• Utility Bills
• Insurance Premiums
• Auto Loans
• Medical Deductibles and Co-Pays
• Other Debts

3. Schedule a meeting with appropriate family members to discuss the financial aspect of caregiving:

• Agree that the best interest of the person is the priority.
• Review the assets and liabilities.
• Unless stipulated by Power of Attorney, determine who will maintain the financial records.
• Investigate long-term care options, including if assets need to be reduced before qualifying for coverage.
• If the person is going to receive in-home care, estimate the expense of any adaptations or renovations.
• Examine ways to cover the cost of long-term care, and eliminate any unnecessary costs, so family members do not assume the burden.
• If one person is going to be the primary caregiver, establish a method of reimbursement, especially if the caregiver is leaving a job or going part-time.
• Meet regularly, so each family member is aware of ongoing costs and finances.
• Consider getting legal advice from an attorney who specializes in Elder Law.

When a parent or relative needs long-term care, what was “normal” is irrevocably changed; past discretionary spending obviously ends at the time of hospitalization. Finances must be carefully preserved to ensure care for an undetermined length of time. Families should come together to make caregiving a priority. Forming a Financial Team is a solid tactic that can eliminate unnecessary confusion and conflict for everyone.