Whoa, Managing Mom’s Finances: Passwords? Anyone?

Presuming that you’ve seen the caregiving commercials and are even more worried about caring for your parents – you’re not alone – over 53 million Americans are currently caring for an elderly relative or friend who needs help just navigating daily life. Yep, that many – 1 in 5 – spend an average 24 hours a week caring for an aging parent, or a spouse or other family member with compromised health. And 48 million do it without any financial help.

It’s safe to say that as you learn more about what caregiving requires it becomes more stressful. Not only are you, the caregiver, watching someone close to you experience a likely decline in health and losing physical and mental strength but wondering what’s next. You’ll likely become the go-between with their doctors, valiantly striving to figure out what the medical experts are telling you and even taught how to take on various medical tasks you would never have imagined. Yes. Seriously.

More unnerving is realizing that the finances need to be managed –. This may start out with making sure the senior is paying their monthly bills.  If so it would be helpful to learn that the banking is set up to pay at the click of a button. Yet, while even people in their 90s still pay bills and monitor investment accounts online, it’s optimal to learn that the elder needing care has created a digital estate plan, authorizing the caregiver to access all the accounts. It’s vital that the caregiver has permission to speak with the elder’s bank personnel and perhaps a financial advisor as necessary.

But as time passes there’s the likelihood that the caregiver has to assume more financial responsibility and that there is no financial plan. Even an adult child who tries to help but is living a 1,000 miles away from a parent can feel stress: Did Mom get taken in by a scammer, but hasn’t yet authorized anyone to represent her at the bank. Or how about the homeowners’ insurance that was not renewed because no one knew there was an online bill.  The Medicare Part B premium started in January 2022 but can Mom still afford that even with the increase in her Social Security check?

A full two-thirds of caregivers regret not having been educated about the financial aspects of caregiving. Fortunately, there are resources to help all caregivers carry out these financial duties and manage their loved one’s money responsibly. What’s more, there is all-important guidance on how parents and siblings can ensure that the designated caregiver who takes on the burden for the family does not take a financial hit —by paying for their caregiving work. When aging parents are agreeable to receive help, ideally all the adult children in the family – not just the acting caregiver – are on board with granting the financial authority through a power of attorney. — so that no one feels left out in the dark and says, “Wait, you have all Mom’s financial passwords?!”

Steps to Take: First, a caregiver should find out what financial resources are available; including bank accounts, investment accounts, Social Security benefits, pensions or retirement plans and/or life insurance or annuities. There is even a way to check if someone cannot find or has forgotten about a pension or a survivor benefit. If there’s an IRA, then there’s the Required Minimum Distribution – is that set up automatically or require a process.

Next, the caregiver needs to access those resources to also monitor all those accounts, renew or amend insurance coverage as needed, file taxes, and perhaps deal with Medicare/Medicaid benefits. Ideally, there are legal documents, signed by the one receiving care, that give the caregiver — or someone else in the family – permission to handle their affairs the way they want them to be handled: These could include: a Durable Power of Attorney, A Health Care Power of Attorney and a Health-Care proxy, a Living Will/and a Durable Power of Attorney for finances.

Every caregiver should know about two agencies that can help caregivers find day-to-day living assistance: Operated by the Administration on Community Living, the Eldercare Locator is available to direct caregivers of aging relatives to local help with transportation, temporary caregivers, planning for long-term care and more. BenefitsCheckUp, which is part of National Council on Aging, can help caregivers when their loved ones who are seniors can’t afford housing costs, or medical costs, or more.

Lastly, caregivers should try not lead a life of personal financial stress due to caregiving. Their families can make the difference for them. Almost 1 in every 5 caregivers say their own finances become strained. Seventy-eight percent of caregivers report that they spend $7,200 a year on average out of their own pockets on their care recipient on medicine, supplies, food, etc). Twenty-eight percent reported that they no longer were able to save money, and 23 percent said they had taken on more debt. Caregivers often end up working reduced hours at their paying job, or quitting altogether, in order to care give. This of course affects their future Social Security benefits, probably their retirement savings contributions, and perhaps their health care coverage.

If the care recipient is a veteran or on Medicaid, the government may pay the caregiver wages. But in all other cases, the solution is: a family care agreement or personal care agreement. Created with or without an elder law attorney, the family — can create a binding contract that guarantees the caregiver certain benefits.  

One last piece of advice: do yourself a favor and download Financial-Steps for Caregivers at the Financial Caregiver Hub. Truly, it will help.