Effective Elder Care Requires Shrewd Planning

Financial expert Alvin Hall has advice about helping your parents get their finances in order.

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MICHEL MARTIN, host:

And now it's time for Money Coach where we check in with personal finance guru Alvin Hall. Last week we also talked with Alvin about elder care and we decided there was more to say about the financial challenges of elder care.

So, part two of that discussion we turn once again to financial expert Alvin Hall. He joins us from our London Bureau.

Alvin, welcome.

Mr. ALVIN HALL (Financial Expert): Thank you, Michel. Glad to be here today.

MARTIN: Glad to have you back. Now, let's try to get down to brass tacks. If you figured out that the seniors in your life cannot live on their own, what's the next step?

Mr. HALL: Your choice between assisted living nursing home or in-home care depends upon your family's financial situation. And I think the children have to sit down together and make this decision as a group. One of the things you need to think about and talk honestly about is letting your parents have the freedom that they want at that time in their lives. Make them sign an enduring power of attorney giving the right to make decision in case something goes wrong to one of their children. Have them sign living wills. A living will expresses your desires; you don't want any extraordinary means to keep you alive. That's really important. And then sit down and say okay how much money do we have to afford to keep you at home. And then the group makes the decision. If you're a single child, it's a hard decision to make because you often don't want to move in with your parents to take care of them but you need to look at their finances and see how long they will last before you have to ask for federal assistance.

MARTIN: And how do you know what you're looking at? Let's say, you're talking about just one parent, so to keep it simple.

Mr. HALL: I'm actually involved in a situation now involving a friend of mine who's mother's slept in the house and they've had to move someone in to help live with the mother because her mother doesn't want the daughter to live in the house with her. And we're looking at a cost, easily, of $2,500 a month just for the in-home care. So, they've actually had to sit down and look at how much money the mother have in savings account and how long this can go on before they have to make the critical decision of whether or not to put her in an assisted living facility.

MARTIN: And, again, I always have to ask the question do you think that there are particular issues that people of color need to be aware of?

Mr. HALL: Yes. The lure of the reverse mortgage. I think people of color, because often we have not had the opportunity to save a lot of money over our lifetimes, our greatest asset is a house. Often the children or the parent will look at that and say we have all the equity in the house, why don't I take out a reverse mortgage. Beware the reverse mortgage because often the terms of this contract can be absolutely devastating to the long-term wellbeing of this person.

MARTIN: And what do you do, Alvin, if there are siblings and the siblings are not all on the same page about what should happen? Because I'm…

Mr. HALL: Is this an autobiographical question you're asking me? It sounds like a…

MARTIN: I guess this is so common in families that I know that they are to be vastly different levels of income, vastly different levels of sort of life circumstance. But how do you sort all that out?

Mr. HALL: A lot of people, they will never say this to your face or even admit it to themselves, they live in anticipation of the payout that will come when the parent dies, and the expectations can be way out of whack, completely unreasonable. You have to sit down and hammer out an agreement, and it will never be easy. Expect there to be, you know, hard feelings, anger…

MARTIN: You're sending the awfully bleak picture here, Alvin. Is that just from your own experience?

Mr. HALL: No.

MARTIN: Is that just what you see with client?

Mr. HALL: I've seen that some people find the death of the parent or the pending death hard to accept. Another child will say, you know mommy and daddy is ready to die but they are behind the scenes motivation, maybe let me see how much I'm going to get when I sell the house. And another child may just say, you know I want this over with. I'm willing to let them die with the dignity that they deserve. I want to move on. And you often have those conflicting agendas where everyone has a different set of expectations. You just have to talk until you reach a conclusion.

MARTIN: I wonder though whether some of that is cultural bias against putting people in the facilities, for example, having outsiders in the home.

Mr. HALL: Yes.

MARTIN: Cultural things that work here that repeatedly more suspicious of outside help.

Mr. HALL: I don't think people are suspicious so much of outside help. It's when one sibling decides to be the dominant caregiver and moves into the house and everyone becomes suspicious. That's what I've seen over and over again.

You know, I've been here taking care of our mother or father, all you did was write checks and make phone calls but I was here everyday, why can't we keep the house? Don't I deserve the house? What do saying from that? We have to make the decision, that's for all us. It's not about you. Often the property and the things less than the will represent our first grab at some financial stability.

MARTIN: I see. I see your point.

Mr. HALL: We are hard press to let that go.

MARTIN: Finally, Alvin, very briefly if you would. You mentioned last week about the importance of writing a will and having a will established.

Mr. HALL: You need to not only specify what you want to go to each child but you also should write a message explaining your decision. These little moments in a will, will give the family some perspective on your thinking, so it doesn't seem so arbitrary. The best thing my grandmother ever did for us was to tell us exactly what she wanted. If it comes to the end, let me die. And we did. And we don't regret it, because it was what she wanted. That makes the decision making process so easy for those left behind. Tell them what you wanted. If you don't want a extraordinary means, say that.

MARTIN: Be clear about your intentions. Save your love ones as the agony of trying to figure it out.

Mr. HALL: Yes. Grandmother, actually, went so far as to plan not only her funeral, the choir that she wanted to come to her funeral, she bought her casket, she chose her dress, she chose her wig, she chose the plot. All I had to do was to show up and choose the tombstone. I can still remember walking into the church and they started to sing her favorite song and you would think I would burst into tears, but it was this moment of celebration because we knew that she had made every decision before she died and this was what she wanted.

MARTIN: Alvin Hall joined us from our NPR bureau in London.

Alvin, thanks once again bracing advice, but good advice, I think.

Mr. HALL: Thank you very much, Michel.

MARTIN: Now we've had our conversation about elder care, now we'd like to hear from you. We'd love to know how you've dealt with prickly financial discussions with parents or siblings or how you are caring for aging parents. If you have more questions, we can certainly bring our experts back and just maybe your experiences can help others. Please visit our blog at npr.org/tellmemore. You can also call our comment line at 202-842-3522, that's 202-842-3522.

And that's our program for today. I'm Michel Martin and this is TELL ME MORE from NPR News. Let's talk more tomorrow.

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