As women, we are often expected to fill multiple roles: that of a loving mother, career woman, supportive wife or partner, volunteer in the community and, at some point for many, a new role—that of caregiver to our parents or loved ones.

For the last 30 years, I have helped clients plan for their “golden years,” including how they will address the issues of aging and how to remain independent. I have recently experienced this myself; I was the Designated Daughter for my own parents. Because my parents and I had “the important conversations” and did the proper planning, I was prepared when I received that Call in the Night. Part of creating the life of your dreams is making sure you address all the what ifs in your life. Skipping this step can create unpleasant complications that can be avoided. Our parents and loved ones are living longer, and we need to know how this might affect our lives and be prepared with a plan.

Take a look at these statistics:

  • When Social Security, Medicare & Medicaid were designed, life expectancy was 63.
  • Our fastest growing population is age 85 plus and 50% may have some form of Alzheimer’s.
  • By 2030, 70 million people in the US, or 1-in-5 people, will be age 65.
  • Another 1 million people will be 100 years old.
  • The need for healthcare and related services is exploding! Source: Working with Seniors Health, Financial and Social Issues, 2003

According to USA Today:

  • 60% of US caregivers are female
  • 66% are married or living with a partner
  • 45 is the average age of US caregivers
  • 77 is the average age of the care recipient
  • 41% of caregivers have children under the age of 18 at home
  • 52% of caregivers are employed full time

Learn how to be prepared, how to talk to your parents or loved ones, what you and they should do to ensure your lives continue to run smoothly, and how to avoid costly mistakes.

Step One ~ Get Organized!

Gather together the following items: One filing cabinet, complete with hanging file and manila folders; a copy of all important documents; a large three-ring binder with big tab dividers; and a colored marker.

Use the binder to store copies of important documents. Label the document title on the tab divider. This will come in handy should you need to transport documents. Using your marker, write on the back of each document where the original is stored (i.e. Will store in safe deposit box at Chase Bank on 2nd and Main, son John has the key.) Have a section on beneficiaries that lists all documents with appointed beneficiaries. Always keep this section current. Next, organize your file cabinet. If you don’t want to store original documents in your file cabinet, note the original’s location in the appropriate file.

Create the following titles for your hanging files and store items under each category in labeled manila folders:

Important Information

  1. Location of safe deposit box and key
  2. Passwords for debit card, online accounts, computer, and voicemail
  3. Armed forces documents
  4. Birth, death, and marriage certificates
  5. Names and phone numbers of your attorney, CPA, financial planner, broker, and insurance agents
  6. Copy of tax returns and winter/summer tax assessments
  7. Copy of life, health, disability, and long term care insurance policies
  8. Copy of Social Security Estimate Statement
  9. Copy of driver’s license and passport

Legal Planning

  1. Copy of will and trusts
  2. Durable Power of Attorney (DPOA) documents
  3. Prepaid funeral and burial arrangements/plan for pet relocation and expenses

Banking/Investments

  1. Copy of each credit card with contact phone number
  2. Divide out by financial institution a copy of bank statements, brokerage accounts, annuities, IRA’s, stock/bond certificates, and dividend reinvestment plans (DRIP)
  3. Copy of retirement plans and investment real estate documents
  4. Copy of “Survivor’s” Pension Benefit (what the surviving spouse receive after the retiree dies)
  5. Current copies of beneficiary designations for all retirement plans, IRA’s, life insurance, and annuities

Medical

  1. Name and phone numbers of physicians, dentist, nurses, etc.
  2. Name of pharmacy and list of prescriptions
  3. Copy of medical insurance card and benefits guidebook
  4. Long term care and disability insurance policies
  5. Patient Advocate Designation document – give primary care physician a copy
  6. Copy of Medicare card, supplemental medical insurance, and account numbers

Household

  1. Copy of home deed, homeowner’s insurance (include umbrella policies)
  2. Copy of mortgage and home equity loan statements
  3. Copy of auto title, loan/lease, and insurance documents
  4. Copy of statements for gas, electric, water, waste management, telephones, etc.
  5. Home maintenance file to include repair receipts, phone number of repairmen, warrantees, and appliance insurance

Step Two ~ Discovery

Your documentation is organized. Breathe a sigh of relief!

Next, you need to have a series of important conversations with your parents or loved ones and other family members. These discussions should include:

  • What are their wishes for long term care?
  • What are their needs as they are aging and who can provide these?
  • How do they want to handle their money and property as their lifestyle changes
  • What kind of legacy do they want to create for themselves?

It may take while to cover all of these topics. Don’t rush and feel as if you have to discuss everything at one time.

You can initiate the conversation by discussing these subjects in general terms because you are doing your own future planning for college savings or retirement. Ask for
their help to assess their situation and welcome their input on solutions.

Role play a bit. Try talking about how they would feel if they had to make these decisions for you instead. Ask what their friends are doing about these types of
issues. Patience is key here! Most importantly, encourage them to really take a look at their values, lifestyle, and spiritual picture as they ultimately have to own the solutions.

Next, you’re ready to select the individuals you want on the caregiving team. Include any that apply: family members, doctors, home care specialist, attorney, certified elder law specialists, insurance agents, brokers, CPA, caregivers, certified financial planner, therapist, etc. Many of these professionals are trained to help families deal with health, financial, and social issues in a holistic way.

Step Three ~ Create a Financial Plan

Sit down with a certified financial planner and develop a financial plan that addresses the following:

Financial Position:

  • Create a cash flow statement which breaks down income and expenses
  • Determine net worth by listing assets and liabilities

Income Taxes:

  • Review tax situation for capital gains/losses with real estate or stocks
  • Discuss IRA planning, and pension /retirement distribution strategies

Investments:

  • Analyze investments for quality, safety, income needs, tax situation, etc.
  • Ensure investments are manageable, properly diversified, are not all over the place

Retirement:

  • Establish the assets necessary to meet your parents’ or loved ones’ lifetime income needs
  • Project retirement income needs in several situations (i.e. home care/assisted living, and utilizing long-term care insurance benefits, if applicable)

Estate:

  • Review documents and analyze current estate plan
  • Verify beneficiaries on life insurance, annuities, retirement plans, & 401K
  • Identify amount needed for financial independence, amount to leave for a family legacy, and how to allocate social legacy regarding gift and tax
  • May want to consult an Elder Law Attorney for estate planning

Protection:

  • Assess cash flow projections and alternate scenarios regarding disability, long- term care, and premature death

Step Four ~ Meet with Your Team and Create a Plan

Now that you have everything in place, sit down with your caregiving team members and develop a plan of action that satisfies your parents’ or loved ones’ goals, values, and objectives. The final product should enable them to maintain their dignity, lifestyle, and assets. In addition, the plan should be clear, concise, easy to manage, and tax-efficient. It should also acknowledge the needs of whoever becomes the main caregiver.

The benefits of early planning are numerous, including:

  • clarifying your parents’ or loved ones’ wishes
  • identifying the best possible resources
  • minimizing confusion and stress during times of crisis
  • increasing overall peace of mind

The end result? Everyone involved is able to sleep at night knowing all concerns have been addressed and that a team and a plan is in place to accommodate all those what ifs.