March 18, 2011
As people age, financial planning can take on new levels of complexity. On top of the usual questions about managing assets, families may have to decide who will control the purse strings, and when. That, in turn, could determine where a person will live and how well. If the parents lose some of their physical or mental strength, the kids may have to force the issue.
Bringing the kids into the equation can complicate decision-making. Putting assets into a trust and appointing one child as a trustee can simplify things, but it doesn’t erase the family dynamics.
Even a basic decision can mean a lot of questions. Say the parent needs to move out of the home. Will the house be sold and who makes that decision? Will it have to be fixed up first? Where will those funds come from? Can the home be rented out? Who will manage it? What if the siblings disagree?
Those questions are giving rise to the practice of elder care mediation. A study 10 years ago put a spotlight on the issue. Conflict Resolution Quarterly found about 40 percent of adult children caring for a parent had a conflict with a sibling, and many times it was because one had more responsibility than the other.
Parenting the parents
Picking the right person as trustee can be crucial. Craine recalled a family where the last parent died in 2001 and the oldest sister had been named trustee.
“She had this sibling stuff going on, so she decided she wasn’t going to make any distribution of any assets until she was good and ready,” Craine said.
Then came the attacks of Sept. 11, assets took a dive in value and attorneys finally had to get a court order to distribute what was left.
Some families engage the services of a geriatric care manager to coordinate financial issues. Some families turn to mediators to help them work out disputes.
Chris Scott of Capital Mediation Associates takes the approach of phoning family members ahead of time to see what they consider top priorities. As the conversations progress, new priorities emerge. If the parents still are in control of their finances, it can be a big hurdle to let the kids in on the details.
“The toughest part is for an adult child to say to mom or dad, ‘I’m not saying you shouldn’t continue to do it, but would you please show me where everything is just in case,’ ” Scott said.
Having a handle on parents’ finances can help kids know when they need to step in. Red flags include a change in spending behavior. Some older people will order items from catalogues or shopping shows just to interact with the delivery person.
“A person I know, his mother was spending thousands and thousands of dollars of products and sometimes she didn’t even open the packages,” said Marcia Wool, a certified geriatric care manager and owner of Golden Guidance LLC in New Albany.
Tough choices may mean taking away a credit card. People who have been independent, however, don’t like giving it up.
“They don’t want to face their own mortality, or the fact that they need help. They believe they still can manage,” Wool said.
Many times, the oldest child becomes the point person for dealing with parents, regardless of ability or location. The issue then becomes what information gets shared with the family, said Sandra Mendel Furman, owner of A Mature Solution family mediation services in Columbus.
Issues that might need to be mediated include whether mom should go to assisted living. But even taking a few baby steps can help a family get ready for problems that crop up as parents age.
“You don’t have to decide everything right away. You also have to make an informed decision,” Wool said.
One tool that can help manage the parental aging process is long-term care insurance. A good policy, sources said, can mean the difference between a nice assisted living home and a nursing home.
Robert Celaschi is a freelance writer.
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