Life expectancy in America has skyrocketed in recent decades, but are we outliving our savings? In fact, many retirees are unable to continue to care for their own nursing home costs because of inadequate long term care planning. This can put adult children in the awkward situation of having to provide for aging parents while also being faced with costs like college tuition and saving for their own retirement.
New York relatives have a reason to be worried about their older family members who run out of money. Interestingly, the argument about who will pay for mom and dad’s long-term care is becoming increasingly contentious; only about half of U.S. states actually have laws dictating that adult children are considered responsible for their elderly parents. Instead of squabbling with your siblings, though, you may be able to seek additional alternatives that are acceptable for all parties.
First, it is important to determine whether your aging parents are eligible for Medicaid or Medicare, both of which may be able to pay for long-term care. This is an important step to take before you assume financial responsibility for your parents — something nursing homes are only too happy to push on their clients. Remember that annual costs for nursing homes can easily reach $80,000. If the government can foot some of the bill, it makes sense to apply.
Further, siblings should consider negotiating terms so that mom and dad do not have to go into a nursing home. Financial support is not the only way to help care for an aging parent. Moving a relatively healthy elderly parent into one child’s home — while the others provide financial assistance — may make more sense in the long term.
Ultimately, it is important to pursue long term care planning so that your estate never gets to this point. Know your rights under Medicaid and Medicare, and make sure that you understand the real costs associated with assisted living and nursing homes. With a bit of planning, you, your attorney and financial planner can set up a reliable source of income well into your golden years.
Source: U.S. News and World Report, “When Aging Parents Need Financial Help” Susan Johnston, Jul. 29, 2014