Expert Breaks Down the Costs of Eldercare
MICHEL MARTIN, host:
We're going to continue our conversation about elder care with our Money Coach, Alvin Hall.
As we heard from the Mocha Moms, learning about your parents' finances and helping them as they get older can be challenging, especially when you're managing other family responsibilities at the same time.
But here to talk about all that is Alvin Hall. He joins us from his home office in New York. Hi, Alvin.
ALVIN HALL: Hello, Michel. How are you?
MARTIN: I'm good, thanks. Talking about this is so hard, because seniors' financial circumstances can vary so wildly. I mean, some seniors still have those defined benefit pension plans. Some have gold coins stashed in a safe deposit box someplace. So when do you even start to untangle all that?
HALL: I almost feel as if you're talking about my own life. When my grandmother died, she had gold coins and silver coins stashed all over the house. She had money in the pockets of her dresses, monies in savings accounts. And just getting her to focus on that before she died was very, very hard.
I think as African-Americans in particular, that we are so secretive about this because we think it will be taken away. I tell everyone the best thing you can do is to gradually move your parents to the point that they're willing to discuss it with you. But understand that most African-American parents tend to view their money as theirs, not yours. And there is that barrier, no matter how much they love you, how much they trust you, they're not going to be able to move past that so quickly.
MARTIN: But I think we're not talking about trying to get their money. We're talking about trying to help them manage what they have.
HALL: But the perception is that you're trying to get access to it. I've gone through this. And, you know, my grandmother loved me more than you could imagine. But trying to get her to release the control of money and to trust me that I would not use it, would not take away her security was almost impossible. It took years of my saying, we have to deal with this. We have to come - I'm not going to spend your money. All I want is to see where things are so I can help you organize it. And so you have to really win your parents' trust, because often, I think, many parents think that their children - rightly or wrongly - are sitting there, waiting for them to die to get access to their assets.
MARTIN: What kind of specific planning should you be doing if you're trying to be helpful to a senior? Should you get a financial planner to try to talk about long term care insurance?
HALL: The first thing you should do is to sit down and have them draw up a will. A will is the most important thing a relative can have. It will make the process of dealing with their death much easier. You have to sit them down and talk to them about that. These are hard, emotional issues even for me to talk about - and I am a professional in this area - because it really takes me back to my own life, where trying to get my mother just to sign a will so that the house that she owned would be equally divided among the seven children. It was impossible. And as a result, there was no will, and it's been going on now for two and a half years after her death.
Secondly, then once the will is in place, I would talk about elder care. Look at the full array of insurance that they own, and then evaluate whether or not it will meet their needs if they get older, and then decide if they can afford to buy a policy that will help take care of them when they're older. This you should go to a really high quality financial person for this. And then the third thing is to get them to make a list of all of their assets and make sure that you know where everything is.
MARTIN: What happens if parents or seniors - senior relatives are in financial trouble, and you find out - you know, this is often the case, you know? Seniors get behind in their bills and things like because they lose the ability to say on top of that paperwork. Now, you've been very strict with us about lending money to people, even to family members.
MARTIN: But what about parents?
HALL: You may have to lend some money to your parents to pull them out of the situation. The key thing is to sit them down and have a really frank talk. I've been looking at your bills, mom and dad, and you're falling behind. You're not keeping track of them. I'm going to take over the paying of your bills. I'm going to help you restructure this so you can retain the comfort level that you have. That they might trust you for.
MARTIN: But what if they say, I don't need your help, boy?
(Soundbite of laughter)
MARTIN: I'm your…
MARTIN: That's sad to me.
(Soundbite of laughter)
HALL: Michel, you sound like one of my relatives. I'm sorry. I wish you could hear yourself.
You have to say, well, you know, things are much worse than you think. And let me paint a worst case scenario for you. If I do not help you, you will lose the house. You will have to move in with that sister you may not get along well with. So at some point, you have to trust me that I'm doing the right thing for you. Those were almost exactly the words I said to the relative.
MARTIN: And did that work?
HALL: It worked.
MARTIN: Alvin Hall is a financial expert. He joined us from his home office in New York. Alvin, thanks again.
HALL: You're most welcome.