How should I organize finances if I am a caregiver?
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Suzanne Modigliani of Harvard Health Publications answered:If you are a caregiver, sometimes organizing finances requires you to take the helm. Often, though, it's a matter of presenting options that the person you are caring for may not know of or might feel wary about. If so, proper research or professional advice can help you lobby for changes. Focus on the following:
Clean up finances. A smattering of bank accounts and far-flung retirement funds does no one good. Create a list of existing accounts. Consolidate bank accounts, and consider doing the same with investment and money management accounts. Talk with a financial adviser about investment strategies.
Consider a durable power of attorney or a joint bank account. A durable power of attorney can give a caregiver the legal authority to pay bills and oversee finances. If no durable power of attorney exists, opening a joint bank account with the person you are caring for can make bill paying easier. If you choose to use a joint account, make sure only one signature is required to avoid problems if the person you are caring for becomes incapacitated.
Streamline deposits and payments. Online payments and automatic withdrawals ease the task of tracking and paying important bills. A money manager, certified public accountant, or local bill-paying service could also handle this job for a fee; some will even come to the home. Automatic deposit of Social Security benefits and other income sidesteps the problem of misplaced checks.
Trim expenses. Small economies help, but larger ones -- such as discontinuing unnecessary insurance policies, seeking discount drug options, or rolling debt from several high-interest credit cards into one payment at a lower rate -- are better. Contact the local Agency on Aging to check on the availability of assistance in paying heating bills, property tax relief for senior homeowners, and similar programs that could trim expenses.
Share the cost. Consider asking family members to pay a portion of costs or to pay you for your services.
Look for additional income. If the person receiving care is a homeowner, he or she could establish a home equity line of credit to boost income.If you are a caregiver, sometimes organizing finances requires you to take the helm. Often, though, it's a matter of presenting options that the person you are caring for may not know of or might feel wary about. If so, proper research or... More -
HealthyWomen answered:How much money is available for the care of your friend or family member? What are the sources of regular income? Disability insurance? Long-term care insurance? Pensions? Social Security? Veterans' benefits? You may have to do some detective work to discover where the financial documents are kept. Look for bank and brokerage statements, wills, annuity information, insurance policies, pension information and other income-related records.
Review papers—ideally with a banker, lawyer, accountant, insurance agent or financial planner who knows your family. Even if you opt to handle the finances yourself, it's important to get a professional's advice on the best way to proceed. The documents will paint a clearer picture of your relative's financial situation and determine eligibility for economic assistance. Here are a few tips for handling the financial end:
- If you don't obtain power of attorney, you (or a trusted relative or friend) should at least become a joint signer of your family member's bank accounts. You may want to talk to the bank about becoming authorized to draw checks on his or her account.
- If the person you are caring for doesn't live with you, ask creditors to notify you if a payment is missed. Note that eople with dementia are just as likely to overpay. It's best to have automatic withdrawals and online bill payment or have key bills sent to another family member.
- Ask your insurance provider or financial planner about long-term care insurance. Long-term care insurance, partially and for a limited time, pays for some home care and other alternatives to nursing homes under specific conditions so people can have the care they need, where they want it. Long-term care insurance helps people have more options and choices, because both home care and nursing home care are expensive. By the time the person is over 65, frail or disabled, the premiums are prohibitively expensive, and the benefits won't be available immediately.
- Use direct deposit whenever possible. Some payments, such as Social Security, may already go directly to the bank.
- Keep important documents together in a safe and accessible place.
How much money is available for the care of your friend or family member? What are the sources of regular income? Disability insurance? Long-term care insurance? Pensions? Social Security? Veterans' benefits? You may have to do some... More
