Caring for a loved one can get expensive. It’s often hard to discuss with your loved ones, especially if they’re experiencing dementia or other cognitive disorders. Money is frequently the cause of family tension, fights, and general unease; emotional struggles associated with caring for a loved one (illness, aging, death, and other very real emotions) tend to come out in these fights about money.
Take a moment to plan a family meeting. Sitting down with your family — and perhaps a facilitator or your legal attorney — to talk about this issue can open a dialogue, bolster connection rather than tension, and help to solve money issues in a healthy, productive way.
Here are five places to find money when caring for a loved one:
#1 – Public Assistance: Public benefits like Medicaid, tax planning, special needs trusts, Social Security, and houses and health care contracts are a good place to start when looking for money to take care of your loved one.
Medicaid is an option for aging parents. The Annals of Internal Medicine study shows that “the share of dementia patients on Medicaid went from 21% to 49% during their last five years of life.” Even if your aging parent doesn’t have dementia, you may want to start looking into Medicaid for assistance. Keep in mind, though, that Medicaid has fairly strict rules for qualification.
Supplement Security Income (SSI) is another option for loved ones 65 and older who meet certain financial limits. If you’re supporting an elderly parent, you may also want to look into your eligibility for tax breaks. The IRS Publication 501 outlines dependency requirements; if eligible, you may be able to claim your loved one as a dependent and deduct medical expenses.
#2 – Investments: It may be difficult to sort through all of the assets that your loved one has available. You’ll want to figure out the equity of their home, especially if your parent is moving in with you and you’d like to put it up for sale or use the home to set up a reverse mortgage.
If your parent is confused about their investments or if their late spouse handled most of the money, make an appointment with a financial planner to help you sort things out. They may be able to create a joint bank account so that you can manage your loved one’s money directly.
In addition, a financial planner may also be able to help you determine whether or not your loved one has a pension. Creating a joint bank account will allow you to access the pension payments whether they come in the form of direct deposits or checks through the mail. If you suspect your loved one’s pension may have been lost, there are many resources that detail the process of obtaining it.
#3 – Selling Property: If your loved one has moved in with you, it’s likely they’ve left their own house empty. Taking care of your own home, your loved ones, and a second property can be time-consuming, stressful, and needlessly expensive. Property taxes, upkeep, and maintenance? It’s too much. What’s more, a vacant property is a liability–if someone gets hurt on a property, the homeowner (or their legal representative) is still responsible. Selling your home with a company like Next Chapter can get rid of this burden, giving you some much-needed cash quickly and efficiently.
#4 – Insurance: Does your aging parent have a long-term care insurance policy in effect? While only 7% of the population does, it’s worth looking into for extra assistance. A standard health insurance typically doesn’t cover the cost of a nursing home or assisted living scenario. If they do have long-term care insurance you will be able to collect up to $500 a day (depending on the type of coverage) for caregiving expenses.
There are also other insurance plans that you and your loved one may benefit from. Permanent life insurance plans are often considered to be a way to supplement your loved one’s retirement, allowing them to withdraw or borrow money that’s accumulated in addition to or alongside their death benefit. Moreover, the AARP Medicare Supplement Plan can help you to pay medical expenses that aren’t covered by Medicare part A and B.
#5 – Medicaid’s Cash and Counseling: Though only available in a handful of states (Alabama, Illinois, Iowa, Kentucky, Michigan, Minnesota, New Mexico, Pennsylvania, Rhode Island, Vermont, Washington and West Virginia), Medicaid’s Cash and Counseling actually gives the caregiver (you!) direct payments. Also referred to as “Participant/Consumer” or “Self-Directed Programs,” this service will enable you to take care of your loved one and receive money for it.
Most of us don’t like to talk about money, but it’s necessary to think and talk about it when taking care of a loved one. Even if your elderly parent doesn’t have financial assets of their own, there are multiple public reservoirs that you may be eligible for. And, throughout the process, try to communicate with advisors, your family, and legal aid for maximum assistance.