Financial Tips For The New Caregivers

Baby Boomers are becoming the new caregivers. In fact, 25% of adult Americans fall in this category. Transitioning from child to caregiver can be an emotional and stressful time, especially if the responsibility is sudden. Not only is managing your elder parent’s health difficult but managing their finances can be especially trying.

Caring.com’s yearly Usage and Attitudes Survey, released in September, reveals how family caregivers of older adults living in the U.S. hold up financially as they care for elder loved ones. And according to the website’s CEO Andy Cohen, most people aren’t financially prepared for the role of caregiving.

John MacGregor of MacGregor Financial, and author of What to Do Before Your Loved One Passes, offers these tips as you prepare for the role of caregiver:

Get Organized

People have accumulated a lot of stuff throughout their life, and getting it organized will streamline this process and give you and your aging parent(s) confidence. Use a resource book or tool to help you get organized.

Get These Documents Prepared

There are legal documents that can assist older adults in a medical or financial emergency and can ease stress and optimize outcomes for the family.

  • An Estate Plan or a simple will (which in most cases is sufficient) is the anticipation and arrangement for the disposal of an estate during a person’s life. An Estate Plan typically attempts to eliminate uncertainties over the administration of a probate and maximize the value of the estate by reducing taxes and other expenses.
  • A Living Trust is a written legal document through which your assets are placed in a trust for your benefit during your lifetime and then transferred to designated beneficiaries at your death by a chosen representative, called a “successor trustee”.
  • A Durable Power of Attorney, an important estate-planning tool, that designates a person or persons to make decisions for the parent. There are two that everyone should have; one for medical purposes and the other for financial purposes.

Avoid Financial Scams

Unfortunately financial elder abuse can be difficult to identify. It often takes a caring family member, friend or caregiver to recognize that fraud has occurred. These are some signs to look for:

  • Belongings or property is missing
  • Unusual bank account activity
  • Complaints from seniors that they can suddenly not afford normal purchases
  • Suspicious stories about people that normally wouldn’t be involved in personal affairs now being involved
  • Unnecessary purchases (often big-ticket items)
  • Sudden changes to Power of Attorney or will
  • Sudden interest in an investment or business opportunity
  • Claims they have won a prize, lottery or vacation
  • Numerous unpaid bills or bounced checks

"The ultimate goal is to make sure you have all the decision-making rights you need to manage your loved one's affairs," advises Charles Sabatino, director of the American Bar Association's Commission on Law and Aging. Contact the Bar Association in your state to help you find an estate planning attorney in your area.

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