Talking with aging parents about their finances isn’t always easy, but you might need to bring this topic up at some point. Offering your senior parents a little bit of financial assistance early on could prevent a wide variety of issues later, such as a foreclosure or bankruptcy. These five tips can help you support your elderly loved one without putting your own finances at risk.
1. Assist Instead of Taking Over
Older adults often feel like they are losing control over many different aspects of their lives, which is why you need to approach the situation with as much empathy as possible. Instead of blaming your parent for making mistakes, ask if he or she wants a little bit of help with monthly expenses. There may come a point when you need to completely take control of his or her finances, but most seniors don’t need that level of intervention until much later on.
Consider hiring a professional caregiver if you need a break from your caregiving duties to review your own financial standing or plan your loved one’s finances. Westport home care professionals can be a wonderful boon to seniors. Whether they require around-the-clock supervision or just need assistance with exercise and household tasks a few days a week, seniors can enjoy a higher quality of life with the help of trusted in-home caregivers.
2. Start Collecting Paperwork
Sifting through years of income information and spending habits can be one of the most time consuming aspects of financial planning. You and your loved one might need to spend a few weeks collecting receipts, tax returns, pink slips, loan documents, and bills. Once you have this information, you can then come up with a proper budget. In addition to covering his or her basic needs, your parent’s budget should also account for unexpected expenses such as a sudden illness or acute injury.
3. Ask for Medical and Financial Power of Attorney
Even if your parent asked you for financial assistance, you still need to get his or her authorization in writing. After you have your loved one’s written authorization, you will have full access to his or her medical and financial records. Many financial organizations have generic forms for these authorizations, but you might also want to speak with an elder law attorney to make sure all the paperwork is legally binding.
Helping a senior loved one with daily activities while planning his or her finances can be a difficult task. Some seniors need occasional assistance at home, and oftentimes the family members who take care of them need time away to run errands, take a nap, go to work, or take a vacation. Westport respite care experts from Home Care Assistance are available on an as-needed basis, giving your family peace of mind that your loved one will remain safe and comfortable while you relax or focus on other important responsibilities.
4. Decide Between Loaning Money and Paying for Expenses Outright
Paying for your parent’s expenses outright has fewer tax restrictions, but he or she might lose some benefits if the financial assistance is classified as income. Private loans, on the other hand, are not classified as income unless the borrower defaults. That being said, loans must adhere to very strict IRS regulations, and you will need to have proof that the loan is legally binding and being paid off.
5. Consider Smaller Gifts
Directly gifting money is one of the best ways to support an aging parent if he or she only needs a little help every month. Currently, a single individual can gift his or her parent up to $14,000 a year or a lifetime amount of $5.49 million without paying any additional taxes. Couples can gift a private party up to $28,000 a year or $11 million over the course of their lifetime. These gifts are completely tax exempt, but you must carefully document all transactions to prevent additional estate taxes.
Offering financial assistance is one of the many ways you can help your senior loved one maintain a high quality of life. Consider hiring a professional caregiver if your loved one needs assistance with daily tasks and making healthy lifestyle choices. For many seniors in Westport, CT, live-in care is an essential component of aging in place safely and comfortably. However, it’s important for them to have caregivers they can trust and rely on. At Home Care Assistance, we extensively screen all of our live-in and 24-hour caregivers and only hire those who have experience in the senior home care industry. Our strict requirements ensure seniors can remain in the comfort of home with a reduced risk of injury or serious illness. To learn about our premier in-home care plans, give us a call at 203-955-1915 today.