The prospect of putting a parent in a nursing home is stressful enough without worrying about how to pay for it. But preparing well in advance can make the decision easier.
The first step in creating a care plan is to divide the tasks among family members. Each child should be given an assignment, such as:
—Interview nursing home staff for details on cost and services;
—Work with a financial planner to create a strategy for managing expenses and assets;
—Meet with an attorney to structure legal documents.
When shopping for nursing homes, each one should be carefully evaluated on costs and services. Each home has its own pricing plan and what is included, or not included, in that price. All nursing homes are not a “one price for all” service. Each home should provide pricing and services in writing. In addition, obtain a copy of the contract and have an elder law attorney review it first. Never sign a blank contract.
A financial planner can help a family anticipate financial needs and resources. Unfortunately, no one knows the number of years a parent will live, which makes planning difficult. But once the nursing home is chosen and the doctor has estimated medical or drug needs, the planner can use these costs to be more precise.
The planner should create an annual budget for the parent and detail how assets would be most efficiently withdrawn to meet expenses. A net worth statement should list any annuities, pensions, trusts or benefits the parent is entitled to receive. The planner should also be knowledgeable of Social Security benefits and Medicaid planning in case the parent runs out of money. A fee-only planner is a good choice to receive unbiased advice and avoid potential solicitation of product sales. All the children should attend the plan meeting so that all agree on the strategy.
The attorney has an important role in making sure legal documents give a child or children authority to act on the parent’s behalf. This is important to make medical decisions and prove to the bank or investment company that the child can make transactions for the parent, usually by power of attorney. If the parent is wealthy, the attorney could also offer strategies for avoiding estate taxes now and in the future.
Putting a parent in a home is not an overnight event. Getting organized — and getting all the siblings on the same page first —eases the process and prevents disputes.