Dad Needs Memory Care Assistance
Long-time client, his wife and two adult children came to the office recently. Dad was a long-time corporate executive who ran U.S. operations for a multi-national company. He handled all of the Family finances. Mom ran the house and the Family but had no interest in the Family finances. (My mistake was to allow this situation to continue for too long. Today, I would no longer allow Mom to be absent from their Annual Meeting.) The children were unaware of their parents’ financial situation other than to be thankful for the generous gifts to the grandchildren. Retirement was destructive both financially and physically to this couple. Health issues and accidents accumulated. The Big House, the vacations and country clubs were maintained for many years after the couple could no longer afford them.
When Dad started to develop memory issues the financial problems became apparent. Mom had to learn fast but Dad would not give up control, a symptom of his memory problems. Although the children were aware of the memory issues, they were not aware of the financial issue. What should the Family do?
One of the most demanding topics for a family to deal with is the development of a memory loss by the family matriarch or patriarch. This problem can be compounded in a situation where the memory loss issue develops in the family member who has always handled the family finances, and perhaps even had created the family wealth. Interestingly, my experience has been that the memory loss can initially develop around financial matters. The family member has been very strong on finances and was very comfortable maneuvering numbers and financial projections in their own mind. Suddenly the family member has trouble calculating the tip at dinner.
What should the family do? How might the family address the matter in a family meeting? Typically, two related topics.
First, what healthcare services may be needed for the family member? And second, how will the family pay for those healthcare changes? What changes might take place in the financial and the family investment program to respond to these needs? To start, the Family should develop an approach to the medical care that is necessary. It is common for these problems to linger. The spouse of the person with memory loss may wait longer than they should before seeking help. The caretaking spouse can even do some damage to their own health in the caretaking process. There is a good chance the Family will not agree on what is appropriate. The Family should have these conversations about managing expectations far earlier than the actual implementation of the strategy. There also should be some conversation about expected contributions by children in both time, effort, and management of parental health and financial needs. As always, conversations in advance of the events can be developed before there is an emergency.
The Family should evaluate the circumstances. If the caretaking spouse is unable to do routine activities, such as make appointments, see friends, take care of their own financial matters. These are all indications that professional help is needed. Daycare or home healthcare aids may be necessary. It is very useful to have family meetings on these matters early in the process. The cost of home healthcare help can start at a reasonable level. When the help advances to all day care, you can move into the hundreds of dollars per day cost.
Of course, the cost to maintain memory care is easiest to bear when the family has significant financial resources. All day care can move from a couple of thousand a month up to a $8,000 or $9,000 per month. It is important to recall that the care amounts are in addition to ordinary monthly living expenses.
Alternatively, long-term care insurance may have been purchased many years ago. In many cases, these long-term care policies were issued at very reasonable premium structures, but recently, they have become much more expensive with shorter terms for benefits. All these programs must be purchased well in advance of any memory issues developing. If a family does not have the financial resources to address the medical care, then they must immediately begin planning towards less expensive alternatives, such as Veterans facilities, and possibly the use of Medicaid facilities. It is beyond the scope of this memo to discuss the full range of requirements to qualify for Medicaid. However, there are elder care lawyers that specialize in this area, and their expertise can be crucial. Medicaid can be available and will allow the spouse to live in the family home. Support of the spouse is also allowed by Medicaid. Assets cannot be transferred from the spouse with the memory issue within five years of eligibility without penalty. It may be useful for any caretaking spouse who is working to make significant contributions to a retirement plan or 401(k) plan and accumulate assets in their own name. The joint funds from the spouse's IRA who's having memory issues can be used to support the couple. Investment strategy, where if the family is concerned about resources, might be changed. The Family may decide to adopt a more aggressive equity-oriented strategy. The approach might be that if the markets move against them, their qualification for Medicaid may come sooner, and if the markets move in their favor, the family may be able to pay for the care.
The investment strategy change could apply to the caretaker’s spouse in that she might decide to have a more equity-oriented approach. Her money has to last a very long time, and Medicaid would not attach her retirement assets. The family should also keep in mind that the family home is typically exempted from Medicaid planning attachment. The caretaking spouse may decide to pay down the mortgage. Expenses of living can come from the parent who has memory loss issues and has potential medical care.
Our firm has developed a significant expertise in helping families think through these issues on their own. We also have an extensive relationships with elder care counsel and primary care home healthcare providers that could also assist them, independently of the medical care for the patient.
Please contact us, to setup your family meeting today.