Planning For Elder Care

Many of my clients have been tasked with looking after their aging parents, both from a physical and financial standpoint. The way you may invest your funds and what should be done for your parents differs greatly. The next couple of newsletters will focus on the things you can do to make this transition less stressfull. This article focuses on what steps to take to plan for the unfortunate time where your parents may not be able to care for themselves. Next article will present a real life example of how I worked with one of my clients to transition her Mom’s finances after her Dad has passed away.

The responsibility for arranging for or providing care can be extremely stressful but planning ahead can make the process more manageable. Start by discussing lifestyle considerations, potential care alternatives, and associated costs and funding. This is best done when the family members are healthy and not reacting to a crisis. For example, actual placement in a long-term care facility may need to be done quickly when a spot becomes available. Advance planning will ensure decisions are made only after the options have been fully evaluated by the family members concerned and in accordance with the wishes of the elderly person affected. Planning ahead financially is also essential to ensure resources are available to pay for the care required and to minimize compromises in everyone's style of living. Costs for care for the elderly range depending on location within Canada, the level of care required, and the extent of services and facilities provided.

Costs for home care can be as high as $30 per hour and a private facility can cost from $54,000 up to $100,000 per year. Care in a nursing home varies, but may start at $1,600 per month for a bed in a basic ward, and can be much higher. Government subsidies may be available depending on the income of the patient. If you need to take time off work to take care of another person, or will be paying some of the costs of care yourself, your own financial plan may need to be altered as a result.

An elderly person may lose the ability to manage his or her own financial affairs, or even make decisions about his or her own health care. Without proper planning, family members may not have access to financial information, bank accounts or be aware of existing insurance plans. Nor will anyone have the authority to pay bills or manage investments. Family members may be confronted with the difficult decision of who will step forward into this new role. Some of these issues can be dealt with by a power of attorney.

A power of attorney is a legal document that permits one person, called an "attorney", to make decisions on behalf of another person, called the "grantor". The grantor can only set it up when he or she is still capable of making such decisions on his or her own. It is usually a simple document separate from the Will, and it is only effective during the grantor's lifetime.

There are two types of powers of attorney. One is for property, which enables the attorney to manage investments and make other financial decisions. Failure to have a power of attorney for property can result in a great deal of expense and inconvenience for other family members who may need to apply to a court to gain authority over the finances of the incapable person.

The other power of attorney, recognized in many provinces, is for personal care. It may also be called a health directive, living will, or representation agreement. This power of attorney deals with all aspects of physical care including living conditions, medical treatment, nutrition, clothing, hygiene and safety. Without it, it may be more difficult for family members to arrange for care or placement in a care facility. In addition, family members may not make the decisions the patient would want regarding medical treatment.

Planning ahead for appropriate elder care and putting in place a sound financial plan to fund future requirements is advisable.