Two sisters with parents in their 80s bitterly accuse one another of wrongdoing. Older sister (OS) originally had full charge of both parents, quitting her job to care for Dad when he got sick. Younger sister (YS) is sure OS took money she should not have taken, as she drew a small regular amount from the parents’ funds to help support herself. OS is sure YS took money out of the parents’ savings and hid her actions. Then the power over funds was switched to YS and finally revoked by the parents. No one is clear about
who is right. The fight goes on.
The conflict seems to be driven by an underlying fear that the parents will run out of money while they still need full time care. It is a legitimate fear. The parents’ income is good from their retirement plans as public employees for decades, but it is not enough to pay for a full time caregiver who helps both of them. Mom cannot do much for herself now. She is in a wheelchair and needs assistance with her basic activities such as bathing, dressing and getting to the bathroom. Dad is less impaired but has early dementia. He’s in a wheelchair too.
The Dire Financial Picture
Most of us believe that if we have solid careers and a retirement plan or pension that we’ll be okay in retirement. For many, the rude awakening comes when one must pay for help at home. Medicare does not cover this except for a short time after a hospitalization. Normal health insurance does not cover it either. So, it has to come out of savings or selling assets. In this family’s case, the only significant asset left is the parents’ home, which has a loan on it. That loan is paying for the home care workers. When it comes due, the elders will have to sell their home. That creates a taxable event and will not leave a huge amount of sale proceeds to pay for care elsewhere. No one in this family has a plan for what happens after the home must be sold. Neither OS nor YS make enough money working to support their parents.
Failure To Plan
The parents, like many retired elders, never imagined running out of money. After all, that good pension should be enough to live on rather well, right? Neither parent ever contemplated becoming impaired and needing around the clock help. That is a failure on their part to even consider the potential need for long term care, now causing nasty fighting between their adult children. The mutual accusations between the sisters will never solve the running-out-of-money issue. What the aging parents might have done at an earlier stage in life could have included investing in a way that increased their income, downsizing their home to generate cash, buying long term care insurance when they were younger, making a plan to move to a less expensive place to live and get care, and other possible options. As they live on, the parents face the prospect of becoming impoverished and having to accept the lowest level of care available with public benefits, which at this moment are all in danger, given the current political climate.
Possible Solutions
No one is going to give these elders an easy way out of their situation. There is no public program that will allow them to stay at home indefinitely, keep the home, repay the loan, and have full time care there. No magic solution exits. There are some things that can lessen the load of stress the elders have to deal with now, particularly over the daughters’ battle. They make accusations about who took what money from the parents and how it was spent. Facts can clear up the misconceptions if there are any.
1. A neutral outside professional, such as a licensed fiduciary, bookkeeper or Daily Money Manger can do an accounting of all income and expenses from the time the Dad fell ill up to the present. Money leaves a trail. A neutral person can show in black and white the figures both sisters and the parents need to see to reduce the vitriol that is unnecessarily stressing out the parents. If anyone needs to make things right, the same evidence will be before all family members. If not, they can drop the fighting and focus on their parents’ future.
2. Either OS or YS or any other competent person can start the research now on alternative living arrangements where care can be provided for both parents full time. The elders live in a very expensive area of their state where property values are high. Even with repayment of the loan on the home, and the tax consequence of selling it, they are going to receive some cash after it’s said and done. That cash can help pay for care in a far less expensive location than the parents’ current home with their agency provided caregivers.
3. Both parents need to be prepared to accept that they can’t stay at home after the home loan comes due. They also need to accept that their living situation must change. They expressed the desire to remain where they are “as long as possible.” That is a common refrain we hear at AgingParents.com, where we advise families, including this one. These folks are reaching the limit of “as long as possible” at home soon. Possible means one must be able to pay for the privilege. That has an expiration date in this case. There are no other assets to tap to enable them to stay in place.
The Takeaways
It seems clear to us as advisors in this matter that the real force behind the sibling fighting over who did what is that neither wants their parents to end up with nowhere to go and no way to pay for care. The daughters themselves cannot provide the needed care.
We suggested to them to do these things:
1. Get a full accounting of finances from an outside neutral person and accept the results. It is too late to undo any money moving that may have happened in the past. Unless there is clear proof of financial abuse from the accounting, it is not worth anyone’s time to continue the battle. Get over your own conflicts and concentrate on planning for your impaired parents’ safety for the future. They are very stressed by your fighting.
2. Plan for alternative locations where your parents can live and receive care at a lower price than they are now paying in their very expensive county. Lower cost options do exist, outside their city and in different parts of their state. Spend your time and efforts in finding a good place for them, analyze the timeline and plan for it.
3. Get tax advice, medical opinions and projections from their healthcare providers, and care planning advice from the appropriate available experts. Those kinds of advice are valuable in helping to protect vulnerable elders from being forced into a sub standard nursing home, their worst nightmare.
Family fights are not an uncommon matter in the world of aging parents who need care. It is possible to get them resolved if the family members are willing to change focus from accusations against one another to protecting their parents. Family meetings conducted by facilitators or mediators who are well versed in the legal and medical issues at hand can reduce stress for all.
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