Financial Issues for Long-Distance Caregivers

All Things Financial

Volume 16 No. 10, November 2010
By Charles P. Jones, CFP®

Care givingAs older friends and relatives increasingly need our help, it’s not always possible for us to move back to personally oversee their care. The same goes for younger loved ones who face sudden illness or injury that robs them of their ability to care for themselves.How can we best be in charge when we can’t be onsite?

It takes a plan, one best made well ahead of the time when there’s a real need. In reality, caregiving issues should be part of any person’s long-term financial plan if there’s even the remotest chance that a spouse, partner, parent, child aunt or uncle, sibling or friend may end up needing our care.

However, statistics suggest that possibility may not be all that remote, particularly as Americans live longer. In a 2009 report, The National Alliance for Caregivers, in collaboration with AARP and the MetLife Foundation, reported that currently 29 percent of the U.S. adult population, or 65.7 million people, are caregivers, including 31 percent of all households. Those numbers are expected to grow due largely to the aging Baby Boomer demographic.

Where to start? A good first stop is a qualified financial planner who can look at your overall financial picture and the financial picture for your loved one. Then you can determine how much help you can offer from a money perspective, either in direct care, travel expenses or expenses for third parties offering direct assistance onsite. It’s important to get one-to-one advice on these matters because a caregiving plan needs to fit you and the person you’re trying to help. Here are some questions that can help you focus your thinking:

Do you know your loved one’s care preferences? Before you even get to money issues, understand what your loved one wants. The best-case scenario is to have a conversation with that person long before they need care, but even in a transitional situation, addressing their care preferences and overall dignity is paramount. You need to make sure your loved one understands your situation too, particularly if your work, your family situation or other issues prevent you from caring for them personally. Before making a plan, understand each other. A family meeting might be a good idea so everyone understands these needs and wants.

Are their legal documents in place? Does this parent, relative or friend have a will and necessary health directives in place? Health directives name a single individual to manage all key health decisions if a patient cannot make them; a will depending on their assets and lifestyle situation – if they have kids to raise or a business to run, for example – check to see what detailed legal instructions they have in place to manage their finances or run their business if they are incapacitated. And if those plans have not been made, they need to be made immediately with the help of financial planning, tax and estate experts to fit those documents to your loved one’s needs. An individual who is ill or disabled needs to designate people whom they trust to handle health and personal finance decisions. But if they have not planned for the future of their business, that is a third and very detailed step that needs to be addressed in collaboration with other family members as well as key co-workers or executives.

Do you know their financial situation? It’s rarely easy to talk about money even in the closest relationships. But once care preferences are known, then it’s time to discuss the loved one’s own financial preparations because one of the biggest misperceptions about long-term care is that the government provides financial support for nursing or home-based care. (Outside of medical care for those who qualify under Medicare or Medicaid, it doesn’t.) A qualified financial planner can be an important mediator in this very detailed discussion, asking both sides critical questions to illuminate what financial resources are available and which ones might be needed. And keep in mind that the questions go well beyond what’s necessary to provide care – loved ones may need to address omnibus issues like real estate and estate planning but even minute lifestyle issues like making sure monthly bills get paid. Expect a very wide-ranging and detailed conversation that could take weeks, not hours.

Who should handle what? Bigger families and groups can share responsibilities, and that can make the caregiving job easier. But if you are soloing as the financial and health power of attorney, it’s important to devise ways to do remote tasks efficiently and bring in help when necessary so you can supervise effectively from afar:

  • Consider a geriatric care manager: The National Association of Professional Geriatric Care Managers ( is an organization of on-the-ground caregivers and caregiving coordinators with skills that include nursing, gerontology, social work and psychology. For caregivers with limited time to address their loved one’s day-to-day issues but who have the resources to pay for help, it might be wise to consult with experts after checking their references and qualifications.
  • Take full advantage of the Internet: Older relatives tend to trust traditional means of paying bills, but automatic bill pay and other online financial tools provide an extraordinary benefit for caregivers or relatives charged with managing someone else’s finances. By gathering all bills that need to be paid and programming in their payment dates, there’s little or no risk that any regular bills will be paid late. Automatic bill payment should be one of the first decisions made if an elderly relative establishes a joint checking account with a caregiver or whoever holds their financial power of attorney. Also, if a relative wants to continue a regular savings or investment plan while they are incapacitated, those payments can be made as well. Most important – once those automatic transactions are set up, all the security codes and passwords must be kept in a safe place for both to access.
  • Set up a home maintenance schedule: If the relative is hoping to return to the home or if it must be sold at a later date to pay bills or to settle the estate, it must be maintained to assure its value at the time it needs to be reoccupied or sold.
  • Develop a paperwork system: the sheer amount of paperwork associated with caring for a sick or disabled person can shake the most organized individual. A trained financial expert can help you set up a system for collecting and sorting all the medical and care-based paperwork that will accumulate during your loved one’s care. This is a particular priority for those who are managing this situation remotely. If the house is unoccupied, it’s also important that there is a way to keep mail secure to avoid identity theft – buy a shredder for all mailed materials that don’t need to be filed. Also ask your loved one for permission to pull their credit reports annually so you can confirm all accounts are current and they haven’t been targeted by identity thieves.

What if I need to move? Never say never – this is the reality of a caregiver’s life. Particularly as loved ones get to the end stage of their lives or suffer emergencies and other setbacks, supervising caregivers need to plan for anything. The need to relocate, even temporarily, should always stay in the back of your mind, and the best time to coordinate with family and employers is always before the need arises.

November 2010 — This column is produced by the Financial Planning Association, the membership organization for the financial planning community, and is provided by Charles P. “Chuck” Jones , a local member of FPA.


Ways to Control What You’ll Spend on a Funeral

GravestoneIt doesn’t matter whether a loved one dies suddenly or with warning – funeral costs can be daunting. According to the national Funeral Directors Association, which bills itself as the world’s leading funeral service association, the average cost of an adult funeral in 2010 stood at $7,755, and that amount doesn’t include the price of a gravesite, monuments or flowers – not even the cost of an obituary.

As with most money issues, planning almost always saves money. But particularly with the subject of death, planning can reduce or eliminate a huge source of worry, anguish and conflict among loved ones. So while death is never easy to talk about, it makes considerable financial and personal sense to talk about funeral issues with loved ones before anyone actually needs to. Here are some key considerations:

What do you and your loved ones really want? It makes sense to talk with your parents, your spouse or partner or your children about what your wishes and theirs are for your funeral. Of course, many people ask this question without any real warning and deservedly get an answer with a dismissive wave or a flippant remark. But this needs to be a real conversation.There’s real value in talking about exact wishes and even more value in putting those thoughts on paper for formal inclusion with wills and powers of attorney (more on that below). There are many interlocking issues that come into play in this discussion – religion, relationships, and of course, money. Whether the discussion is face-to-face or within a family meeting, detailed discussion and note-taking is the first important step to making sure your wishes or the wishes of a loved one are recorded and followed.

Consider the alternatives: One of the biggest stories in the funeral industry in the last 25 years has been the growth in cremation as a more affordable and acceptable alternative to traditional burial. On average, cremation can cut the price of a traditional funeral by half or more. According to the Cremation Association of North America (CANA), in 1985, nearly 15 percent of deaths resulted in cremation, but by 2007, that number stood at 34.3 percent. By 2025, CANA expects cremations to reach more than half of all funeral services performed. Also, many individuals now consider donating their bodies to science for the study of disease or organ donation, often at little or no cost whatsoever. This allows friends and families to focus spending on a memorial or other financial needs. To investigate this option, the official terminology is “willed body program,” and many universities with medical schools have them.

Do a cost comparison: It’s not the easiest decision, but if it’s your funeral or the funeral for a loved one, it makes sense to plan ahead and to shop smart. A trusted funeral director will follow state guidelines on price lists and answer your questions thoughtfully. Keep in mind that many states do not require you to buy big-ticket items like coffins from the funeral director, and in some cases, expensive processes like embalming are not even required. It makes sense to visit the website of whatever state agency supervises funeral directors where you live to get an overview of what you may or may not be required to pay for at a funeral home and other alternatives that might save you money. You will also have an outlet for any complaints should they arise. Another good resource is the U.S. Federal Trade Commission’s website which describes the 1984 Funeral Rule that has defined disclosure, pricing and other consumer rights in the funeral industry for the past three decades.

Make funeral planning part of overall end-of-life planning: Whether death comes suddenly or after an extended disability or illness, adults of any age should have proper asset planning and documents in place designating their wishes for their estate, their families and yes, the way they want to say goodbye. It makes sense to consult an expert financial planning professional as well as tax and estate experts to coordinate both financial and end-of-life planning in a way that fits the individual. Commonly, that means having finances in place and a legally written will and specific health, financial and family directives exist to guide survivors through the funeral and beyond.

November 2010 — This column is produced by the Financial Planning Association, the membership organization for the financial planning community, and is provided by Charles P. “Chuck” Jones, a local member of FPA.

Chuck’s Comments:

Happy Thanksgiving!
Thanksgiving is a time when families gather and share a special meal and have a chance to talk to each other about the past, the present, and the future. My friends, colleagues, and clients know that I strongly encourage communication with the next generation(s) on your thoughts, plans, and wishes. Your children and grandchildren are (probably) not telepathic, so you need to make time to talk with them and perhaps make a family tradition of it. One of the things I plan to share with my family is a purchase I have researched and will be making shortly.

This past week, I met with Teresa Jeffcott, a representative from Neptune Cremation Service. This particular company provides cremation services for individuals, as well as taking care of all of the possible transportation details (no matter where you might be… perhaps you are on a cruise or at your winter home) and contacting your family in a considerate & caring manner.

I want to be the person to make all the decisions about what happens with me and I don’t want my family having to deal with any of it or have any large and unpleasant financial surprises.

The following is an excerpt from their brochure. You may also find out more about them at:

“One of the most important and valuable services offered by Neptune is advance planning… the ability to make your cremation arrangements now, before the need arises. These are some of the advantages to consider:

  • Makes your wishes known… clarify your preference for cremation and guarantee your wishes will be honored. You can also make decisions about memorialization.
  • Spares your family… loved ones will not be subjected to unnecessary decision-making or expense during a stressful time. Neptune handles all the details.
  • Economically sound… avoid inflation and all future price increases. Your price is guaranteed and your funds are safely held in trust. They offer payment plans, as well.
  • Peace of mind… it’s handled, those you love will not be burdened, and your wishes are known and documented… you can rest easy.”

They are very clear and upfront about what they do and how things will be handled. Though I’m planning to be around for quite some time, I don’t want any of my children to be put through the stress of making decisions about what I may have wanted while they are grieving. They will know and it will have been taken care of… by me… through planning ahead.

Endings & New Beginnings

We wish to congratulate Sheri Sanders on her engagement. Sheri, who has been our Client Services Administrator for the past 10 years, recently became engaged to her high-school sweetheart after re-connecting. Sheri will be relocating to the Tucson area in January. We will miss her and would like to wish her much happiness!

We would also like to welcome Jenna Minkler, who recently joined the Chuck Jones Team. Jenna is that rarest of birds… a native Oregonian! She was born in Portland and raised in Newberg. Jenna graduated from CS Lewis Academy in Newberg, where she was involved in a variety of activities including: theater, sports (volleyball, golf, and softball), as well as being chosen captain of her cheerleading squad in her senior year.

Jenna is a newlywed, having married husband Nick Minkler this past March. She has spent five years in the financial services industry, four years as the personal assistant to a Regional Manager and over a year as an office assistant in the same firm. Jenna is also a Licensed Massage Therapist, having graduated from Everest Institute with honors.

For the past 10 years, Jenna has been a volunteer with GKC, a local non-profit that benefits children.

She has already assumed expediting many of the day-to-day operational tasks for the team. In addition, Jenna plans on utilizing her enthusiasm and background to optimize the client experience in the most cost-effective manner possible.

Tax Q&A

Q: When does a $1.00 Donation cost you a mere 8.5 cents? A: When you use your dollar to purchase tax credits from the IDA tax credit.

You will immediately receive a 75% credit for each dollar put into the program through Neighborhood Partnerships: a 501(c)(3) nonprofit and the Oregon 75% Tax Credit provider. The funds go toward launching new businesses & education and training for Oregon’s workforce. This puts your tax dollars to work to create jobs… interesting concept, no?

We posed this question to our professional partner, Loren Northup, CPA, of Northup & Northup in Lake Oswego. Loren says that you would need to claim the $1.00 as an addition to income for Oregon, but would also receive a 25 cent deduction on your Federal taxes. If you are in the 25% tax bracket, this works out to approximately 75% of 11 cents, or 8.5 cents.

Tax credits must be purchased prior to the end of the calendar year. For more information go to or call Cynthia Winter at (503) 201-1292. As always, please verify your personal tax situation with your own tax preparer or CPA.

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