A recent New York Times article underscores the importance of making sure your clients have a caregiving plan in place. The article highlights the story of one individual as an example of how caregivers aren’t always necessarily paid professionals and why planning ahead for caregiving needs in the future is crucial.
Family members often turn into unpaid caregivers seemingly overnight, unprepared for the burden and stress of caring for a friend or family member. Whether it’s discovering an elderly parent who’s struggling to care for him- or herself alone at home or dealing with a serious diagnosis, having a care plan in place ahead of time is a game changer.
First and foremost, a proper care plan should list the set of needs of the client and name an individual who will take over as the decision-maker following illness or diminished capacity. The needs should be as detailed and minute as possible, covering everything from who will do household chores to who will provide live-in care.
Legal Considerations
As Michael Gilfix, an attorney at Gilfix & La Poll Associates LLP in Palo Alto, Calif., notes in his Trusts & Estates article “The Quality Home Care Crisis,” the designated individual for health care may not be the same individual named in a durable power of attorney to handle financial affairs. The caretaker must be in tune with a client’s personal and health needs. Often, writes Gilfix, conflicts of interest that need to be discussed may arise when devising a care plan—for example, an elder parent’s decision to remain at home and hire private care providers will chip away at a child’s inheritance.
Other important legal considerations include an advanced directive and of course proper estate planning, including a will.
Who’s the Caregiver?
Where will the care be given and who will provide the support is the next question to consider. Sometimes family members are unable or unwilling to provide the care. If a client wishes to remain at home, two options to consider are home care agencies or private hire caregivers. As Gilfix points out in his article, one perk of home care agencies is that the caregiver is an employee of the agency, which in addition to providing continuing education to caregivers also helps eliminate some of the risks of hiring a private caregiver. One such risk is financial abuse or exploitation through coercion or undue influence.
How to Pay for Care?
Caregiving often comes at a high cost. If a client has long-term care insurance, it’s important to understand what it will and won’t cover, according to Gilfix. Government benefits are another option to consider. Medicare programs may cover some in-home care services, and certain states allow Medicaid coverage for such services.
Even family members who are being compensated for their caregiving should have some sort of formal legal agreement in place stipulating how much they’re being paid to prevent future family conflict down the line as to how the money was spent.
Human Aspect
Gilfix stresses that the subject of caregiving is one that’s “everyone’s issue,” no matter your tax bracket, and one that tax professionals and high-end estate planners typically ignore. “Yet, they’re often more important to life quality than avoiding estate tax,” he reasons.
Broaching the topic with an elderly client isn’t always easy. As many of us have experienced firsthand, most individuals don’t want to contemplate the idea of losing their independence and autonomy, whether it’s regarding end-of-life care or the fact that perhaps they’re at the age where it’s better they no longer drive.
Lynya Floyd, the author of the New York Times article, reminds readers that to get the conversation started, remember to explain that caregiving is inevitable for all individuals and to point out the positives for planning ahead of time (that is, “Wouldn’t you rather be able to dictate what happens if/when the circumstances arise?”). Also, a caregiving plan isn’t one and done—the plan will require tweaking over time as circumstances and/or preferences may change.