Those documents include separate powers of attorney for health-care and financial matters, authorization granting access to medical records under the Health Insurance Portability and Accountability Act, a will, a living will and so on. "These documents should be reviewed regularly to assure that they conform to changing administrative and tax laws," says Roberts.
In addition, if a child named to a specific responsibility has moved away, say, or is suddenly facing his or her own financial or health-related setback, it may be necessary to designate a fallback.
"A good option for flexibility in handling the finances of the parent is to couple the financial power of attorney with a revocable trust," Roberts says. "The child could be the named agent under the power of attorney, which includes authority to fund an existing revocable trust for the benefit of the parent. The trustee of the revocable trust could be a corporate fiduciary ... which could provide professional asset management and bill-paying services, often much more efficiently than through working solely under the power of attorney document."
Caring For The Caretakers
Aging clients should also organize their personal documents, including account statements and property deeds, so their loved ones can find them easily. They should even designate a preferred home-health agency and nursing home, so that when the time comes the transition can be swift and relatively easy. A geriatric care manager can be a critical component to this sort of elder-care planning.
But for the dutiful child (or spouse) who is suddenly facing these new demands, there are other, hard-to-define issues. "Most advisors focus on tax and financial issues," says Herbert Daroff, an attorney and certified financial planner licensee at Baystate Financial Planning in Boston. "Some will also help address the legal issues. All too few properly address the people issues as well."
Clearly, there is no simple one-size-fits-all solution. "It's always a difficult decision, how to balance taking time off of work and caring for a parent," says Scott Laue, a financial advisor and attorney at Savant Capital Management in Rockford, Ill. "In my opinion, most advisors unfortunately are not well prepared. Most advisors are more concerned with selling a product that generates income."
When working with clients who are also caretakers, it's important to maintain flexibility. "These individuals have a hard time meeting with us and following up on critical items due to time pressures," says David Okrent, an elder-law attorney and CPA in Dix Hills, N.Y. "We try to reduce their time pressures as much as we can, through e-mail, teleconferencing, etc."
Hiring Help
There's little question that being a caretaker can be unbearably stressful. "We advise all our caregiver clients to try and find their limit and back up a few feet, especially when the caregiver is an aged spouse with his or her own issues," says Okrent. "It's usually better to hire outside help sooner rather than later."
But what is the cost of hiring that outside help? Laue notes that it is often difficult to quantify how much one should set aside for assistance. Nevertheless, he says, it's important to get the conversation started.
"While additional expenditures earmarked for a parent from one's accumulated assets can put stress on the overall success of one's financial plan," he says, "realistic scenarios are always the best." That helps clients avoid undesirable surprises or outcomes.