For someone suddenly thrust into the role of caregiver, it’s easy to feel overwhelmed and at a loss. Many people have never had to help someone line up in-home care, find a nursing home, activate long-term care insurance, sign up for Medicaid or manage a host of other tasks.
“Caregivers don’t know what they don’t know,” says Amy O’Rourke, president of the Aging Life Care Association (previously known as National Association of Professional Geriatric Care Managers). But turning to a team of professionals for support, such as elder care lawyers, financial advisors and life care managers, can give a new caregiver an edge. “If you know what’s coming, then you can handle it,” O’Rourke says.
“It’s an overwhelming system to try to navigate to get some assistance for their loved one and themselves,” adds Liz Barlowe, a member of the Aging Life Care Association’s board of directors.
Not knowing what kind of assistance is available or making the wrong choice can cost the caregiver and their loved one both time and money, Barlowe says. For instance, the caregiver might be unfamiliar with the ins and outs of maximizing their loved one’s retirement and government benefits before paying any out-of-pocket expenses for services, which could create avoidable financial burdens.
While there are organizations and directories that can be efficient resources for caregivers looking for help regarding specific needs, one perhaps surprising starting point is a financial advisor, says Frank McAleer, vice president of financial planning and retirement solutions at Raymond James.
“Planning for or managing care for aging clients or their parents is a common need that our advisors help their clients address,” McAleer says. “While an individual might tend to wait to talk to their advisor about specific financial needs related to care, advisors are increasingly a hub for resources. They’ve been through this before and can often connect clients with specialists such as care managers and elder care attorneys, while also understanding how the costs fit in.”
Managing It All
Another valuable resource at any caregiver’s disposal — regardless of their circumstances — is a life care manager. These professionals can be seen as a “one-stop shop” to help a caregiver size-up a situation, Barlowe says, as they are able to either direct the caregiver to the services they might need, or perform the actual legwork for them.
Life care managers may have different specialties that make them well-suited to certain circumstances, O’Rourke says. For example, a caregiver may choose a life care manager who is a nurse if their loved one has complex medical needs, while someone with expertise in entitlements might be the best choice to help determine the public benefits for which their loved one is entitled.
Preparing for Anything
It’s also important to have the proper legal documents in place, such as a medical directive or living will, as it’s also known, even if someone is in good health, says Amanda Singleton, an attorney who specializes in elder law and caregiving in St. Petersburg, Florida. “It’s never too soon. Plan as if something could happen tomorrow.”
She also recommends designating someone as a financial power of attorney for if and when “something happens to you and you need to keep the lights on.”
Family Leave Laws
The Family and Medical Leave Act (FMLA) was enacted in 1993 to provide employees with up to 12 weeks of unpaid leave per year. To be eligible for FMLA, however, an employee must have logged at least 1,250 hours with their employer in the past year, and work at a location where 50 or more employees are employed within a 75-mile radius.
Despite the number of caregivers who are eligible for FMLA, many still feel the need to quit their jobs or reduce the number of hours they work. Singleton and others hope to combat this trend by helping companies understand it often “costs way less for an employer to accommodate an employee than to cut them loose and rehire and retrain” someone.
Even though some states have paid family leave laws in place, in reality, caregiving can have significant financial repercussions.
AARP studies found caregivers spend nearly $7,000 per year in out-of-pocket care for loved ones. Moreover, if a caregiver has to take leave from work to provide care, they’re liable to lose an average of $300,000 in lifetime wages and benefits.
Claiming Dependents
A caregiver may be able to claim their elderly parent as a dependent, says McAleer. “If they’re really footing the bill, they can have the person become a dependent on their tax return, though it’s important to consult a tax professional.”
For this to apply, the caregiver must pay for more than half of the parent’s support, and the parent can’t have earned more than $4,050 for the 2016 tax year (Social Security income isn’t counted). Caregivers also can include parent’s medical expenses when calculating their own medical deductions, and may be able to claim the dependent care credit if their parent needs help when the caregiver is at work.
To assist caregivers with navigating more complex Medicare matters, Raymond James has launched a partnership with HPOne, through which clients can obtain recommendations on which Medicare plans best fit their needs. The financial services firm is also in the process of establishing partnerships with caregiving and critical care experts to provide assistance to clients, McAleer says.
With caregiving often comes the need for detailed planning — both for a loved one’s care, as well as the potential financial impacts to those on both sides of the caregiving equation. Increasingly, answers can be found via financial advisors at firms such as Raymond James, who are developing partnerships with organizations to help their clients prepare financially and, just as important, access experienced and vetted resources to help navigate the complexities of managing it all.
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