A care plan includes comparing future housing options, analyzing the financial impact of potential care costs, and ensuring legal documents are in good order.
Like a financial plan, a care plan should be created before care is needed to avoid poor choices and lack of options in the critical moment when care may be needed.
Many parents would like to remain in their home with no interest in relocating, also known as “aging in place.” Others would rather sell their home, forgoing the continued maintenance and transition into a continuing care retirement community or CCRC. In making this decision, careful consideration should be given to objective, subjective and practical factors.
An objective factor entails answering the question, “Can I afford to remain in my home or can I afford to move into a CCRC and what model of CCRC is most appropriate for my situation (with or without long term care insurance)?” A detailed analysis comparing the cost of potential in-home care versus care provided in a CCRC will inform this decision. If “aging in place” is preferred and family members are not geographically close, a care manager can be hired to manage in-home health providers as well as the ongoing upkeep of the home. Care managers are part of the growing industry of health care providers assisting the aging. They typically have backgrounds in nursing or social work. The Aging Life Care Association is a resource to learn more about the role of a care manager.
Another objective factor is the importance (or not) of preserving wealth for family members. If leaving an inheritance is a primary goal, then an analysis comparing the cost of long-term care insurance versus self-insuring or paying for care with savings will highlight the potential strain on portfolio assets for care costs.
Subjective factors center around the “feel good” aspects of home like comfort, community, friends, assess to activities, etc. Practical factors include the increased difficulty of maintaining a home with age, such as yardwork, cleaning, repairs, etc. Is your parent’s home reflective of years of living (i.e. contain a lot of stuff)? Moving into a CCRC would eliminate the burden otherwise left on children to sort through a parent’s belongings.
Estate planning documents should be reviewed to ensure distribution provisions and agents named in the Health Care and Durable POA are in line with parents’ wishes.
Care plan discussions evoke many emotions, which may lead to avoidance of creating one. The first step is to begin discussions around the aging process. These discussions can be facilitated through a family meeting where Parsec advisors can assist in educating family members on the various aspects of a care plan. If you would like this type of a meeting, please let your advisor know and they will happily facilitate it.
If you aren’t a Parsec client, we invite you to learn how we work with various types of clients.
Betsy Cunagin, CFP®, CRPC®
