The Difficult, Delicate Untangling of Our Parents’ Financial Lives

William Powell — Wall Street Journal

When my in-laws became too incapacitated to handle their own affairs, my wife and I took over. A year and a half later, we’re still trying to figure it all out.

The couple wed in 1960 and lived in their Queens, New York, walk-up apartment until last year.
The couple wed in 1960 and lived in their Queens, New York, walk-up apartment until last year. ILLUSTRATION: POWER FAMILY

It is a typically frustrating moment in our family crisis, one that many grown children will have to face, ready or not: We are people in our 50s who are unraveling the finances of parents who can no longer do it themselves.

My wife, Julie, is on the phone with the company where her 82-year-old dad had once worked, trying to change the direct deposit of his pension checks to a bank closer to the assisted-living home where he and his wife now live, which is near us in Pennsylvania. Again and again, she is transferred to the person in charge, “Rose.” And every time, the same recording: “This number has been disconnected.”

 In the room next to her, I see our once-usable sofa, covered with her parents’ financial papers from the 1960s to now. On the floor sit a metal tub and plastic cups of coins that we had hauled from the parents’ third-floor walk-up in Queens, New York—a small (but heavy) part of their lifetime of earning and saving, nearly all of it offline.

These are the kinds of elder-care issues that people talk about, but until you have lived it, you don’t truly realize all that is involved—not even someone like me who has spent decades as a financial reporter.

Julie’s parents, children of immigrants from Hungary and Czechoslovakia, lived since 1960 in that modest Queens apartment, a two-hour drive from us. The two hardworking people—he was an elevator system designer and she was a public-school secretary—spent almost nothing on themselves for decades, but put two children through college and poured out generosity when the grandchildren arrived on the scene (including our daughters).

A year and a half after my mother-in-law joined her husband in retirement in 2013, their health and their ability to keep up with their finances began to fail. Now, neither of them can remember much about their finances—where the accounts are, what bills they need to pay, email addresses, passwords, subscriptions, keys.

My mother-in-law, who used to be a checkbook whiz, and my father-in-law, who had carefully kept decades of paperwork, conceded they needed help. It is such a relief, my father-in-law says now, that he doesn’t have to worry about the grind of family finances. (He also says he’s fine with me writing this article since he is proud of his daughter’s efforts and hopes others can learn about getting their finances in order before it is too late.)

So since November 2014, Julie and I (mainly Julie) have been trying to reconstruct, clean up and resolve a financial life we were never privy to.

Dealing with my in-laws’ collection of coins, mostly in a 45-pound metal tub, is the easiest part.
Dealing with my in-laws’ collection of coins, mostly in a 45-pound metal tub, is the easiest part. PHOTO: POWER FAMILY

Our situation no doubt will be more common as people live longer, and apart from their grown children. The age and the distance mean that an increasing number of these grown children will be invited into their parents’ financial lives, with little clue about any of the details the parents had handled for decades.

We aren’t complaining. We are grateful that all four of Julie’s parents and mine were alive until recently (my mom died in late January), and that Julie’s parents had saved some money. We also recognize this as our duty to parents who were beyond generous with their time and money.

But nothing about it has been either routine or expected. I have watched as Julie simultaneously struggles to make sense of her parents’ financial Rubik’s Cube and deal with their deteriorating health—all while doing the stuff of daily life that used to fill her days. We have learned a lot, though, and some of it might be helpful to others who find themselves in a similar place someday. For our part, what we’ve learned is already affecting our approach to finances—so our own children have an easier time when it’s their turn to sort out our financial lives.

1. Before you do anything else, figure out what you’re doing

Imagine being dropped into someone’s living room and told, “Here you go, you’re running their house now.”

That is how it felt for Julie when suddenly her parents were in a medical crisis, and she and the family had to start reading the daily stack of bills, find out what to pay immediately and what could be put off until next week—while also looking at her father’s files for the first time, filled with 55 years of retirement plan statements, confusing notes about small holdings of several stocks tied to his elevator-company job, folders of tax forms, letters once fired off years ago to New York’s mayor and a stack of bank passbooks grouped in rubber bands. Some information Julie needed from her mom was found on notes on scrap paper in various handbags.


Julie knows an awful lot about her parents—their personalities, their quirks, their histories—but they had never revealed much about their finances. She was pretty much starting from scratch.

She asked to look at her mother’s checkbook and could tell it was once meticulous, but now had some hard-to-read entries. Yet that was pretty simple compared with just figuring out what they had.

What’s clear is how much the Depression-scarred our parents’ generation. That is the only explanation for why Julie’s parents deposited small amounts of money in so many different banks, in the form of savings accounts and CDs. Combined with the small holdings of stock that her dad got through his work, there were more than two dozen accounts to track down, including 12 separate ones at one New York community bank.

Julie started several files and lists of their assets. Every day in the mail, we learned about something new when a statement or bill arrived, and at the same time, we sorted through the files as her father tried to fill in some of the blanks. (Hmm, Julie had a small 20-year “juvenile endowment certificate” dated 1966? But was it already cashed in? We think it was.) I give credit to Julie’s parents for being able to avoid debt. There was just no overall accounting of their assets or clues to whether a certain document was vital or junk.

We’re almost at the end in sorting out what they have; there are one or two accounts we can’t quite figure out.

2. Repeat after me: POA, POA, POA

Everybody is always told how important it is to get a “power of attorney” document, or POA. But let me assure you: As important as you think it is, it is more important than that.

The notarized form gives you the legal right to do financial transactions for someone. When you are stepping in to help run someone’s financial life, you can’t do anything without it, including dealing with banks, pensions, financial advisers, medical facilities. Over and over, you will need to fax, mail or bring in that POA.

(The terminology can get complicated. For instance, what’s a “durable” POA—does it mean the paper wouldn’t yellow? It actually means the document is valid when the elderly person becomes incapacitated.)

The parents’ papers filled our house. We hope to leave fewer behind for our family.
The parents’ papers filled our house. We hope to leave fewer behind for our family. PHOTO: POWER FAMILY

Julie knew early on that she needed a POA, but we initially messed up. To save money and time, we downloaded a standard POA form off the Internet and did it ourselves, but we quickly decided to have one done with a lawyer’s help. In recent years, the forms have become more specific, customized for a certain state or a certain bank, to protect against dishonest children using POAs to rip off their elders. That means that even though you think you have a valid POA, you may get asked to fill out a new one. (And find out where a notary is in your town; needing POAs means you will need a notary many times because different entities will want their own versions filled out.)

Here’s one small example of how important the POA became. In May of 2015, we opened a Citibank letter that was sent to Julie’s parents’ old residence in Queens and these words jump off the page: “…possible transfer of your Citibank retirement plans(s) as abandoned property under New York law.” Say what?

It turns out that this issue involves some certificates of deposit in an account that my in-laws had stopped tending to. The two choices: Take my father-in-law two hours away to a Citibank in New York to sign a paper (not advisable, in his condition). Or send in a notarized form to a San Antonio address, using Julie’s POA to verify her identity.

We had already learned about the limits of a POA: It can sail through again and again, and then suddenly get rejected by one bank. In this case, Julie knew the original POA was worthless since Citibank, like other banks trying to protect themselves, will ask for its own form to be completed. That meant another afternoon explaining to the folks why they were signing a form, and then another trip to the notary.

3. It helps to have a team, both family, and outsiders

Sometimes it is worth it to get outside help: When you are dealing with life’s normal issues with your own children, setting up a parent’s medical-rehab appointments and answering the latest phone call from a parent who has fallen, it can be overwhelming to also be sorting through Medicare forms that you’ve never seen before.

So, hiring a social worker known as a geriatric consultant, if it’s in your budget, can help you keep your sanity, including filling out forms and knowing what rehab facilities make sense in your city. The more trendy term for these advisers is “aging life care consultant.”

I wouldn’t have thought of needing this, but a friend of Julie’s did, and what a relief it was just to have someone who knew immediately what the legitimate rates are for personal-care help, or the better walkers or shower equipment her parents would need. We also signed on for an “elder lawyer” recommended by the consultant, to look at the parents’ will and the POA.

Power-of-attorney forms became familiar quickly. We also sorted through many old-style bank passbooks, some active and some not.
Power-of-attorney forms became familiar quickly. We also sorted through many old-style bank passbooks, some active and some not. PHOTO: POWER FAMILY

Finally, while Julie’s parents aren’t wealthy, on the lawyer’s advice we also met with a financial adviser. We could have survived on our own, but even with my experience, it isn’t easy keeping up with someone else’s IRA-rollover deadlines and notices about required minimum withdrawals.

Or consider that someone had to do Julie’s parents’ taxes by April since they couldn’t handle them. That meant asking our tax accountant to add them as clients, too. (It also meant more POA forms needed to be done, the IRS versions.)

Family support, when you can get it, also helps more than I can say. My own parents had preceded my in-laws in needing the same kind of help. My brother and his wife, who live closest to them, led that task, and we compared notes about both finances and medical issues. Sometimes that meant just a text message of support: “Oy.”

4. In an online world, be ready to be thrown back to the 1970s

When you are invited into a parent’s financial life, you also are going into a time machine.

I don’t just mean the smell of old cardboard and paper. It is startling to be cast back to a generation when everything was offline and decentralized.

Over and over, we find an insurance document or pension papers from the 1960s through the 1980s, and there is no way of telling at first whether it is important or irrelevant. The folks don’t always know. For those of us used to getting information with a few clicks, the detective work needed to get the information about a single document can be jarring.

In some cases, we are the first people to set up online accounts for an investment, with Julie’s parents’ permission. But some of the accounts have to stay on paper, such as the passbook savings at one bank, or the accounts at another bank that didn’t have checking attached to them. That means we couldn’t just sign on to the accounts and consolidate them or close the little ones. It meant more trips to banks, sometimes with her dad when he could travel, to try to close them out or transfer them.

5. Little things we would never have thought of, before this

Like doing a renovation of a house, it is amazing how many little things have cropped up when one change is made. Consider that Julie’s dad can no longer drive. It seemed simple enough to sell or give away his car. That meant more paperwork, of course, and we knew we had to mail back his New York license plates.


But I hadn’t thought that someone has to find out where to return the E-ZPass transponder, too, and close the account.

Or the time that Julie noticed a $36.99 AOL Internet service charge that kept showing up on credit-card statements. This seemed a waste for people who are now blissfully off the grid; in fact, the last time my father-in-law checked his email, with our help, all he wanted to do was to blast-delete every message, like taking out the garbage.

So, we dropped AOL by calling up his account, redoing a password since he didn’t remember it, and immediately cancel it.

But then, the next bill had the same $36.99 charge. Ahh, they have a second, slightly different email name included in the one account, created to battle some long-forgotten problem. We had to cancel that one, too, on the phone. Finally, You haven’t got mail.

Another surprise from out of the blue came over the summer. Phone calls from the New York community bank told us that Julie’s parents have an account that was overdrawn for five months and a $12-a-month penalty was being charged. It turned out, that account was set up to make automated payments for their safe-deposit box, and it slowly was drained to nothing over the years, despite the money they had in another account. We headed back to Queens to close that account and the safe-deposit box. (Or so we thought: Earlier this month, we got another bill for the box that no longer exists. Julie sent a reply that she had handed over both safe-deposit keys to them in October. No answer yet.)

The latest case of “money out the window” that my wife discovered was a Costco membership with automated renewal. Fire up that POA again, to get the charge stopped. After all, while Costco is a great place to shop, it doesn’t make sense to have a membership there when you are basically tethered to your bedroom.

6. Have mercy on your own children

We have learned a few things from this experience, which isn’t over. First, the philosophical part, which of course is to appreciate each day, and your family. Before you know it, you’re not able to.

More practically, we learned that while people don’t want to deal with the tough issues with their parents when they are well, it is less traumatizing than when they are in a hospital bed.

The aging life care consultant that our family hired, Debra Drelich of New York Elder Care Consultants, tells me it is rare that people reach out early to deal with these issues.

Instead, it takes a crisis.

She says our situation is a “classic example”—my father-in-law in the hospital after a medical emergency, my mother-in-law alone at home, and Julie running back and forth to New York. Even when Julie’s dad left the hospital, it meant that there were now two people in an apartment alone, in need of supervision.

Instead of waiting for a crisis, people should start mobilizing “when family members see the situation is becoming more challenging but it hasn’t hit the crisis level yet,” says Ms. Drelich. “This type of situation is usually seen when there is a somewhat slow, steady decline in the older person.”

Here is what we’re doing differently for our children:

We aren’t going to leave them with haphazard records, and notes left in handbags. We have written out a clear, comprehensive list of assets, debts, passwords and sign-on. It is in a safe place that a trusted family member can get to.

It is a chore that is easy to put off, but it took just an hour at first, then we update it as needed.

Still, we were amazed at the number of accounts and passwords we have ourselves. This has been a big help for us right now, and we find ourselves referring to the list all the time; in fact, the usefulness of such a list may be the way to persuade a parent to do the same.

For instance, our Internet service’s wireless router next to our TV even has its own sign-on; having it on our master list has saved us trouble more than once when we had to fix our connection.

Having a router’s private number might not matter to our children when we are gone. But as we have learned, you never know.


Aging Baby Boomers: The role of caretakers

This story is about Tennessee however the challenges of aging and care giving will occurs whatever state you reside.


As our population ages, Baby Boomers and their families are met with new challenges in finding long-term care solutions, paying for health care and more. 

By 2030, state leaders say approximately 20 percent of Tennesseans will be age 65 or older. 

Carolyn Neil, an elder care advocate who is an administrator at Asbury Place in Maryville, says one in four adults are currently serving as caregivers to an elderly relative, friend or spouse. 

About 65 percent of those caregivers are women who work outside the home and spend nearly 20 hours a week providing care. 

While the mental and financial toll of caring for a loved one can be daunting, the best way to minimize the stress of caring for an aging relative is planning ahead, Neil said. 

She said it is important thing is for families to have a conversation about long-term care before they reach a point of crisis, and to make plans before an elderly relative reaches the point of needing extra care.

“Most folks wait, unfortunately, until a crisis hits, and you can have such a more productive conversation when we’re all healthy and well,” Neil said.

“None of us want to age, none of us want to ask for help, so we’ve got to sit and think through this when we’re not stressed, when we’re not in the hospital, when we don’t have additional financial strain and all of these other things that do come with crisis,” she said. 

Some of the important points to discuss are insurance, including whether you need long-term care insurance, financial resources, and legal documents. 

Neil said it’s also important to talk about your support systems, such as siblings, friends or church members who can offer support to both the person who needs care and the caregiver.

Essential care-giving plan Documents

Extended care is a continuum of care, housing, and services people and their families may need because of a chronic illness, frailty, or accident. It is assistance with activities of daily living or supervision caused by severe cognitive impairment. The objective is for people who need caregiving to remain at home allowing your family to oversee your plan of care or depending on the need to be in a care center.

General Power of Attorney

A General Durable Power of Attorney (POA) containing Asset Protection Powers is the first essential document. Not all POA’s are created equal; it is crucial that this document is prepared by a knowledgeable and experienced Attorney and not from a template on the internet. 

A power of attorney is an important document in the event that, due to frailty, illness, or injury, you are unable to be personally responsible for your legal and financial affairs. Asset Protection Powers written into the POA are essential in order for your family to protect your assets,  

A power of attorney is designed to avoid the need to go through a court-supervised conservatorship proceeding, which is time-consuming and an expensive process.  Families must go to court to have you declared incompetent and to be appointed as your Conservator. The Conservatorship process is often referred to as a type of “living probate” because the Conservator is subject to all the rules of the probate court, including the requirement of filing annual accountings with the Court. State laws vary regarding the use and acceptance of a power of attorney.

Advance Medical Directive

A Long-Term Care Plan is an Advance Medical Directive (AMD) containing a Long-Term Care Directive. 

An AMD (also called a Medical Power of Attorney or a Health Care Power of Attorney) authorizes a person (called your “Medical Agent”), to make decisions with respect to your medical care in the event that you are physically or mentally unable to do so. This document includes the type of provisions that used to be in what was commonly called a “Living Will,” allowing you to indicate your wishes concerning the use of artificial or extraordinary measures to prolong your life in the event of a terminal illness or injury. In the AMD you will also appoint a “Medical Agent” and give that person the power to consent to medical and health care decisions on your behalf with regard to providing, withholding, or withdrawing a specific medical treatment or course of treatment when you are incapable of making or communicating an informed decision on your own behalf. A comprehensive AMD will also allow you to indicate your wishes with regard to organ donation, disposition of bodily remains, and funeral arrangements.

A properly-drafted AMD is designed to avoid the need to go through a court-supervised guardianship proceeding, which is a time-consuming, expensive, and publicly embarrassing process whereby someone goes to court to have you declared incompetent and to be appointed as your Guardian, typically at the same time they are requesting appointment as your Conservator.

Long-Term Care Directive

Your Advance Medical Directive Long-Term Care Plan should include a Long-Term Care Directive (or this could be drafted as a separate document), which will allow you to make your desires known in the event you need long-term care in the future. For instance, do you want to remain at home and receive home-based care as long as possible, regardless of cost, even if it drastically reduces or entirely depletes your estate? Or would you prefer to remain at home and receive home-based care only if it doesn’t drastically reduce or entirely deplete your estate? If nursing home care is recommended, would you like to protect as much of your assets as is legally protected so that you can qualify for publicly-funded Medicaid benefits? If so, do you prefer that the protected assets be used to enhance your quality of care, or to provide an inheritance for the beneficiaries of your estate?

In order to be easily accessible when needed, your AMD should be registered with an electronic archive service that can immediately fax or e-mail the document. 

Lifestyle Care Plan

A Long-Term Care Plan is a document called a Lifestyle Care Plan, also known as an Advance Care Plan. The Lifestyle Care Plan identifies your specific needs, desires, habits and preferences and incorporates all of this information into a document that your caregiver, family, or guardian has in writing because there has been the conversation.

An example of how this may be accomplished: Josephine  Bonaparte wrote in her Lifestyle Care Plan that if Alzheimer’s disease or some other type of dementia inhibited her mental abilities to communicate or recognize her surroundings, she wished to be in a respectable facility and only asked when family and friends visited they brought chocolates. This request seemed silly at the time, but when her mental capacities diminished, the instructions were there. No one had to wonder if they should try to take care of her at home and how they would do it. Without guilt or question, they placed her in a respectable facility that took care of her needs. All they had to do was make loving visits, and of course, they brought chocolates.

The reasons Affluent Individuals and Families Want an Extended Care Plan

Why should the successful people consider such solutions when they assume they can easily afford to pay for care? This is often written by writers in numerous publications with the cliche phrase: “If you have $2 Million or more in assets you can self-fund.” 

There are assumptions which need to be considered: (a) Are all the assets available for cash flow; (b) Are some of the assets designated for charity; (c) Are assets designated for special needs; (d) How much is allocated for lifestyle and how much could be allocated towards care services?

For successful clients, it’s important to not confuse a checkbook with a plan for care. There are two major considerations: the financial part of the equation and the emotional and family participation in care.  

Financial Considerations

Let’s look at the financial part of the equation. Coming up with “a number” that someone needs for long-term care is tricky, especially for those in their 50s who may not need care for 30-plus years.

The way many advisors today determine a number is to use carrier cost of care surveys, such from Genworth. They then do a calculation by using an expected number of years of care, such as three, which is a historic average. Using a projected inflation rate, an advisor can estimate how much money a client will need in the future.

For example, using $160 per day as the average cost of eight hours of home care in the U.S. times three years, the current cost of care is about $180,000. If you project that cost of care out 30 years at a 3 percent inflation rate, the amount to set aside is about $412,000.

Besides government programs, i.e. Medicaid which the successful will never need, here are three options for financing LTC:

1.    Cash and equivalents. This is the default approach and it has several benefits, including not paying insurance premiums for something that may never happen. However, the key to this strategy is that some assets need to be identified as the assets that will be used to pay for care, and that designated pool must be periodically reviewed.

2.    Stand-alone LTC. For most people, stand-alone LTC insurance is the most straightforward way to pay for care. People select a monthly benefit maximum, a total benefit maximum and inflation options. 

3.    Hybrid Benefits.  Assets such as cash, CD, Life Insurance, non-tax qualified annuities, IIRA plans, and other near-term cash assets may be transferred to a hybrid plan without tax consequences. Hybrid plans to leverage your money to have this as a reserve for care services which may or may not be needed. It will either become a death benefit or LTC plan. both avoid income tax and estate liability. 

Your care benefit becomes an asset and not an expense as with traditional LTC plans. It offers both life insurance to your estate or trust and provides a reimbursement or cash for extended care services at home or in a care center. 

Emotional And Family Reasons For Planning

Successful clients may have the resources to self-insure or believe they do. So why do many buy LTC insurance? This brings us to the emotional and familial side of the equation. LTC insurance can solve a lot of problems. 

1.    LTC insurance offers care coordination services to advise on whether care is at home or in a care center. Care coordinators work with the family members and physicians to help make decisions.
2.    It allows for guilt–free choice of care. Even if a “self-funding” cash account has been set aside for care, it’s still difficult for a client to write the actual check for care. It seems easier to let the insurance company pay.
3.    Some people describe LTC insurance as a “coupon” that can deeply discount care even if it doesn’t cover all the costs. People enjoy getting a reduced rate at a luxury hotel. LTC insurance will work in a similar manner.
4.    It is good for families with children in different life circumstances. LTC insurance allows a third party to assist with care coordination and funding of care. Siblings are often thrown together to help in a family crisis. Often times it is best for your family to be your family and not your part or full-time caregivers. 

Discussing either part of the equation, it’s important to remember that before someone discusses LTC insurance with you, they have no doubt done research on the Internet and probably have read a lot of positive as well as contradictory information. Here are some common mistakes that both advisors and consumers make when considering LTC planning after researching it:

Not taking into account possible tax incentives. With stand-alone LTC policies, you are usually able to pay premiums through HSA accounts and deduct them as a health insurance expense through a business.

Medicaid planning. States are under huge financial stress due to aging populations and public employee pensions. Expect Medicaid benefits to be tightly managed. Medicaid is a safety net, not something to rely on for higher level LTC care.

Assuming past performance of products indicates future performance. Older LTC policies have been through cycles of rate increases due to missed actuarial assumptions. However, newer policies have cautious pricing reflecting the lower interest rate environment.

One positive and socially responsible way policyholders can think of LTC insurance is that, in the end, it is part of the evolving “sharing economy.” You are paying a monthly fee—and you may or may not use the service. If you do, it’s great. If not, someone will benefit.

Transition Planning: When a loved one dies

Jean Long Manteufel, senior move manager and CEO of Long’s Senior Transition

When people die most families do not have the experience to handle the paperwork and do not know where to begin.

Learning how to deal with the paperwork to officially close a person’s estate is stressful and it comes at a time when you are already dealing with the emotions that come with a loved one’s death.

Here is a Checklist of things to think about and know when doing the paperwork for a loved one’s estate. Things such as dealing with the social company, bank accounts, Social Security, etc?

Here is an initial list of actions that may help a family begin finalizing the decedent’s affairs:

  • Look for a will in the person’s home, a safe deposit box, or filed at the county Register of the Probate office. 
  • Consult an attorney about the need for probate and payment of outstanding debts. A Transfer by Affidavit may be an option for estates of less than $50,000.
  • Consult the preferred funeral home and find out if the person had advance burial planning in place. 
  • Notify a landlord in writing that the person has passed away. This limits the rental liability to two months of rent past the month of notification. 
  • Notify utility companies if cable or phone can be stopped. 
  • Notify Social Security Administration so that benefits are not overpaid, and so that dependent and widow’s benefits can be properly paid out.
  • Notify the life insurance company. Usually, a death certificate is needed to pay out the beneficiary of record. 
  • Close out credit cards. 
  • Notify Medicaid Estate Recovery if the person received Medicaid benefits. 
  • Have a durable power of attorney to authorize the executor handling probate to have the authorization to enter deceased person’s electronic bank accounts and other on-line accounts.
Many of these actions will require a person who has authority to act on behalf of the decedent, meaning the executor or personal representative of the estate. It is recommended that the executor and family consult with an elder law or probate attorney to ensure the estate is handled properly according to state statutes as paying creditors in the wrong order could cause personal liability on the part of the personal representative.”

Don’t make your heirs play “hide and seek.” With planning, you can make this challenging period easier for your family. Having a location of your legal and important documents and sharing this information with your executor and family you will make their job easier.

A Caregiver’s Guide to Prevent Falls


Every year, more than two million seniors are rushed to the emergency room after falling.

Several things can lead to the elderly falling, such as:

  • Vision problems
  • Difficulty walking
  • Medication side effects that cause vertigo
  • Foot or leg pain
  • Household hazards

Fortunately, falls are easily preventable. Taking the right precautions will make your loved one’s home a safe environment. 

Removing Household Hazards

Household hazards are the easiest risk to eliminate. As your parents become older, mobility is an issue. Start by removing clutter around their house. These potential hazards include things such as electrical cords, loose rugs, and knick-knacks. Clear all pathways of objects they might trip over, and do a thorough examination of their home.

You may find you’ll have to do minor repairs to correct a sloping step, broken tile, or loose floorboard. Rearrange their furniture so they will always have something stable to hold onto as they walk around. If they use a mobility device like a cane or wheelchair, increase doorway widths to 36 inches so they can maneuver easily.

Eye Problems      

Removing excess clutter and creating safe pathways won’t help much if the areas do not provide good lighting. 

Failing eyesight that comes with age will cause people to misjudge distance and depth. Not only would it be hard to determine how far away a table edge is, but they could also have difficulty navigating staircases. 

Regularly get your elderly loved one’s eyes checked in case their prescription needs to be updated. Encourage them to always wear their prescription glasses, even if it’s just for a short trip to the bathroom in the middle of the night.

Ensure your home is well-lit and light switches are easily accessible. A lack of literal blind spots will aid your aging loved one in moving around the house, regardless of the time of the day.

Reading glasses should not be worn while walking, especially outside. Those who wear progressive lenses should ask their doctors for a separate pair for general outdoor activities, as these types of glasses may interfere with distance perception.

Increasing Physical Activity


An effective way to prevent falls and improve their balance is strengthening their core and lower muscles. As your loved one ages, their physical fitness and abilities begin to decline. Muscle tone will gradually disappear and flexibility will decrease. This can be easily combatted by regularly engaging in light exercise.

Activities that focus on strengthening and improving strength in the lower extremities, and improving balance are suggested to any senior looking to start a new exercise program. For caregivers, check out your local community centers to find fitness classes that are senior citizen friendly. Tai Chi is one often-recommended exercise. If you can not find a class your loved one would like to join, encourage them to walk each day.

Older people may not be inclined to start a new exercise program, for any number of reasons. Offering to join your aging loved one in classes or short walks every day may encourage them to participate. Not only will you be helping them stay fit, but you’ll also be able to bond with them over a new activity.

For elderly individuals who already have trouble walking, it may be advisable to own equipment that allows them to walk independently. Canes and walkers are ideal for a senior who still wishes to get around but who may already have trouble doing so without assistance.

Safety Precautions


 Even the ideal physical fitness level for your loved one’s age stands no chance against slippery floors or other hazzards.  A precaution against easily avoidable falls, it’s best to look into safety equipment that can be installed around your home to eliminate any chance of an accident.

Bathrooms are particularly notorious for slips and spills, for both elderly and young patients. Implementing assistive devices should be a top priority. Look for grab bars that can be attached to shower walls and bathtub sides, as well as non-slip bath mats that allow the elderly to stand without worrying about sliding on wet tiles. For those unable to stand in the shower, a bath chair can make showering a safer and more independent experience. Transfer benches are another option to help seniors get in and out of the shower.

Installing handrails on both sides of your stairs is recommended to ensure your loved one’s safety when they use the stairs. Handrails can provide a stable device for them to hold onto, but they can also be used in the event of a fall. Grabbing onto the rail can either stop the fall and allow them to steady themselves or can be used for them to get back up.

Providing the elderly with proper-fitting shoes is important. Make sure they wear comfortable and well-fitting. For women, low-heeled shoes with a non-slip sole. 

Final Thoughts

Remember, if you are caring for an elderly relative, falls don’t have to happen. They are easily avoidable with the right safety precautions and a few additions such as assist bars in the shower stall or handrails on the staircase.

Term Life Insurance Policies to transfer to Life Settlement option for Care Benefits

Term life insurance policies fulfill an obvious need in the market, helping people with a

specific need for life insurance for a set amount of time. They’re a great “just in case”

option, and one that the policyholder shouldn’t have to continue paying for after the need is

no longer there.

Yet it can certainly feel like you’re letting a lot of money simply wash away after the

need is gone or the term expires on the policy. That’s why term policies don’t always get

the credit they should—it may sometimes be difficult to justify the investment in them

when there’s no ROI whatsoever.

That’s a big misunderstanding, though. Term policies can provide ROI. It’s just that more

often than not, individuals and/or advisors don’t think about the option that can make the policy fruitful.

 The Convertible Rider

Odds are, when the policy was sold, it included a convertible rider that allows the policy to become permanent. It’s a great safety net for someone who may have become uninsurable during the policy’s term.  But that rider can do more: it allows the policy to be sold in a life settlement, providing a return that otherwise simply wouldn’t exist.

What is a Life Settlement?

A life settlement, or viatical, is the sale of a person’s life insurance policy to a third-party investor. In a life settlement, the policy’s owner transfers the ownership of that policy in exchange for an immediate cash payment from the buyer. Candidates for life settlements are typically 70 or older, with a life insurance policy that has a “face value” (death benefit) of more than $100,000.

Life Insurance Settlement Example

Mr. Smythe owns a convertible term policy with a death benefit of $3.5 million. The term of the policy is expiring, so he is debating letting the term policy expire.

Instead of lapsing, Mr. Smythe converted the policy and then sold it in a life settlement for $350,000.  Imagine…. he was going to let the policy simply lapse, and get nothing in return.  Instead, he received $350,000 to invest in creating a reserve fund for care benefits or own a hybrid plan to shelter the money from capital gains and estate taxes for care benefits.


Proposed Tax Bill Would Clarify Tax Treatment of Life Settlements

Published by: THINKADVISOR

In May 2009, the IRS issued Revenue Ruling 2009-13 addressing the tax implications of a life settlement to the seller of a life insurance policy. H.R. 1262 was recently introduced to remedy the shortcomings of this revenue ruling.

In the 2009 ruling, the IRS created a distinction in the tax basis of policies that are surrendered and policies that are sold in a life settlement. For policies that are surrendered at a taxable gain, the law has long been that the policy owner’s basis is their cumulative investment in the contract, which is basically the cumulative premiums paid fewer withdrawals and dividends taken from the policy.

But for purposes of a life settlement, the IRS ruled that the basis would have to be reduced by the cumulative cost of insurance charges assessed against the policy. For no apparent reason, the ruling puts the seller in a life settlement transaction in a less favorable tax position than someone who surrenders a policy.

Furthermore, the ruling created a number of unanswered issues with respect to the tax treatment of a life settlement transaction to the seller:

  1. Since insurance companies are not required to track the cumulative cost of insurance charges, what is a seller to do if the information is not available?
  2. What is the tax basis of whole life policies which do not have the explicit cost of insurance charges?
  3. Since it is mathematically possible for cumulative cost of insurance charges to exceed cumulative premiums, can a policy have a negative tax basis?
  4. What is the basis of a policy that had been previously subject to a 1035 exchange?
  5. The broadly worded language of the ruling could be applied to a situation where a business transfers a key employee policy to the employee.

H.R. 1262 provides long-awaited relief, solving all these problems by eliminating the requirement to reduce the seller’s tax basis by the cost of insurance charges.

The seller in a life settlement transaction would have the same tax basis as someone who surrendered a policy.

This relief would be retroactive to August 25, 2009, which was the effective date of Revenue Ruling 2009-13. In addition, the proposal would also clarify the reporting requirements for all parties to a life settlement transaction including the issuing insurance company.

Hopefully, Congress will act quickly on the proposal as relief from the poorly reasoned and problematic Rev. Rul. 2009-13 is long overdue.

The Cost of Dementia: How it affects those who will need caregiving and their Family

A report from the Alzheimer’s Association reads that one in nine Americans age 65 or older currently have Alzheimer’s. With the baby boomer generation aging and people living longer, that number may nearly triple by 2050. Alzheimer’s, of course, is just one cause of dementia—mini-strokes (TIAs) are also to blame—so the number of those with dementia may actually be higher.

Caring for someone with dementia is more expensive—and care is often needed longer—than for someone who does not have dementia. Because the cost of care in a facility is out of reach for many families, caregivers are often family members who risk their own financial security and health to care for a loved one.

Cost of Care for the Patient with Dementia—And How to Pay for It

As the disease progresses, so does the level of care the person requires—and so do the costs of that care. Options range from in-home care (starting at $46,332 per year) to adult daycare (starting at $17,676 per year) to assisted living facilities ($43,536 per year) to nursing homes ($82,128 per year for a semi-private room). These are the national average costs in 2016 as provided by Genworth in its most recent study. Costs have risen steadily over the past 13 years since Genworth began tracking them.

Care for a person with dementia can last years, and there are few outside resources to help pay for this kind of care. Health insurance does not cover assisted living or nursing home facilities, or help with activities of daily living (ADL), which include eating, bathing, and dressing.

Medicare covers some in-home health care and a limited number of days of skilled nursing home care, but not long-term care. Medicaid, which does cover long-term care, was designed for the indigent; the person’s assets must be spent down to almost nothing to qualify. VA benefits for Aid & Attendance will help pay for some care, including assisted living and nursing home facilities, for veterans and their spouses who qualify.

Having a care plan which is a collaboration of your estate planning and having a reserve benefits plan which will pay for care services whether at home or in a care center. People believe that their assets pay for care. Cash Flow pays for your lifestyle and care services. No matter what level of cash flow, the most efficient method is to use your assets and cash flow for your lifestyle and have a care plan in place to provide benefits to pay for care services. It is efficient and avoids tax issues. 

However, for the most part, families are not prepared to pay these extraordinary costs, especially if they go on for years. As a result, family members are often required to provide the care for as long as possible.

Financial Costs for the Family

Women often serve as caregivers for spouses, parents, in-laws and friends. While some men do serve as caregivers, women spend approximately 50% more time caregiving than men.

The financial impact on women caregivers is substantial. In another Genworth study, Beyond Dollars 2015, more than 60% of the women surveyed reported they pay for care with their cash flow, savings and retirement funds. These expenses include household expenses, personal items, transportation services, informal caregivers and long-term care facilities. Almost half report having to reduce their own quality of living in order to pay for the care.

In addition, absences, reduced hours and chronic tardiness can mean a significant reduction in a caregiver’s pay. 77% of those surveyed missed time from work in order to provide care for a loved one, with an average of seven hours missed per week. About one-third of caregivers provide 30 or more hours of care per week, and half of those estimate they lost around one-third of their income. More than half had to work fewer hours, felt their career was negatively affected and had to leave their job as the result of a long-term care situation.

Caregivers who lose income also lose retirement benefits and social security benefits. They may be sacrificing their children’s college funds and their own retirement. Other family members who contribute to the costs of care may also see their standard of living and savings reduced.

Emotional and Physical Costs to Caregivers

In addition to the financial costs, caregivers report increased stress, anxiety and depression. The Genworth study found that while a high percentage of caregivers have some positive feelings about providing care for their loved one, almost half also experienced depression, mood swings and resentment, and admitted the event negatively affected their personal health and well-being. About a third reported an extremely high level of stress and said their relationships with their family and spouse were affected. More than half did not feel qualified to provide physical care and worried about the lack of time for themselves and their families.

Providing care to someone with dementia increases the levels of distress and depression higher than caring for someone without dementia. People with dementia may wander, become aggressive and often no longer recognize family members, even those caring for them. Caregivers can become exhausted physically and emotionally, and the patient may simply become too much for them to handle, especially when the caregiver is an older person providing care for his/her ill spouse. This can lead to feelings of failure and guilt. In addition, these caregivers often have high blood pressure, an increased risk of developing hypertension, spend less time on preventative care and have a higher risk of developing coronary heart disease.

What can be done?

Planning is important. Challenges that caregivers face include finding relief from the emotional stress associated with providing care for a loved one, planning to cover the responsibilities that could jeopardize the caregiver’s job or career, and easing financial pressures that strain a family’s budget. Having options—additional caregivers, alternate sources of funds, respite care for the caregiver—can help relieve many of these stresses. In addition, there are a number of legal options to help families protect hard-earned assets from the rising costs of long-term care and to access funds to help pay for that care.

The best way to have those options when they are needed is to plan ahead, but most people don’t. According to the Genworth survey, the top reasons people fail to plan are they didn’t want to admit care was needed; the timing of the long-term care need was unforeseen or unexpected; they didn’t want to talk about it; they thought they had more time, and they hoped the issue would resolve itself.

Waiting too late to plan for the need for long-term care, especially for dementia, will put a family into confusion about what Mom or Dad would want, what options are available, what resources can help pay for care and who is best-suited to help provide hands-on care if needed. Having the courage to discuss the possibility of incapacity and/or dementia before it happens can go a long way toward being prepared should that time come.

Watch for early signs of dementia. The Alzheimer’s Association ( has prepared a list of signs and symptoms that can help individuals and family members recognize the beginnings of dementia. Early diagnosis provides the best opportunities for treatment, support, and planning for the future. Some medications can slow the progress of the disease, and new discoveries are being made every year.

Take good care of the caregiver. Caregivers need support and time off to take care of themselves. Arrange for relief from outside caregivers or other family members. All will benefit from joining a caregiver support group to share questions and frustrations, and learn how other caregivers are coping. Caregivers need to determine what they need to maintain their stamina, energy and positive outlook. That may include regular exercise (a yoga class, golf, walk or run), a weekly Bible study, an outing with friends, or time to read or simply watch TV.

If the main caregiver currently works outside the home, they can inquire about resources that might be available. Depending on how long they expect to be caring for the person, they may be able to work on a flex-time schedule or from home. Consider whether other family members can provide compensation to the one who will be the main caregiver.

Seek assistance. Find out what resources might be available. A local Elder Law attorney can prepare necessary legal documents, help maximize income, retirement savings and long-time care insurance, and apply for VA or Medicaid benefits. He or she will also be familiar with various living communities in the area and in-home care agencies.

Managing A Care Crisis

Caring for a loved one with dementia is more demanding and more expensive for a longer time than caring for a loved one without dementia. It requires the entire family to come together to discuss and explore all options so that the burden of providing care is shared by all.

Therapeutic Lying to Comfort Loved Ones With Dementia

By Brenda Avadian – U.S. News & World Report

When a loved one asks, “Where’s Ma?” as my father often did, referring to my mother, I’d hesitatingly reply, “Well, uh, you know she died three years ago.”

He’d look at me, shocked, then lower his head and retreat to his bedroom in our home. Each time my husband and I reminded him of her passing, he’d grieve. He and my mother were married for 43 years after he, a long-time bachelor, married at age 40.

Dementia symptoms at age 86 made it difficult for him to remember. It became clear he could no longer live alone safely. Limited by our options, my husband and I moved him from his Wisconsin home of 45 years into our California home.

Nothing but the Truth?

We are raised, to tell the truth. I was born on my father’s 49th birthday. I can’t lie to him! If he had a lucid moment, he’d know I lied. How do you rebuild trust after breaking it? So, I insisted on telling the truth each time. As a result, he grieved anew each time he learned that his wife had died.

During support group, I asked for advice: How do I answer my father when he asks about my mother’s whereabouts?

A nurse with a dry sense of humor who left her job to care for her mother at home told me: lie. I thought she was kidding until the other members agreed.

“What?” Support group had always made sense, but this was downright unethical! Tempering my righteous indignation, I blurted out, “That’s not a good idea! Seriously, how do I respond to potentially emotionally-charged questions?”

That afternoon, I didn’t hear the rest of their advice. I went home and mulled over what I had taken in. I couldn’t erase the hypocritical-sounding advice that came from the mouths of these principled support-group members.

Therapeutic Lying

In the weeks following the support-group members’ advice, I learned about therapeutic lying. There are variations when using this approach from telling an innocent lie to diverting attention toward a pleasant memory.

Instead of “Don’t you remember, she died a half-dozen years ago?” I’d say, “She went to the store. She said she wanted to make us a special meal.”

“Oh,” he’d often respond. But the “special meal” lie elicited a smile or an “Oh really? What’s the occasion?”

This kind of lying is for his own good, I still felt uneasy. So, I used another technique in the therapeutic lying arsenal. I diverted his attention with a fun memory. “Remember when you’d cultivate the garden each spring and Ma would plant the seeds she’d saved from last year’s harvest?”

My father would look at me, inquisitively.

I’d add another memory, “Remember when Ma would go through a lot of trouble to prepare breakfast and we’d have a Sunday morning picnic at Bradford Beach? Remember the stone lions?”

He’d smile brightly and ask, “You remember all that?”

He felt much better after those diversionary memories, and so did I. I learned about the enormous difference in telling the (harsh) truth of life versus telling a truth that helps one recall pleasant memories. Caregiving became less of a struggle.

Lying and Dementia

Depending on the type and stage of dementia, the original question may be quickly forgotten, leaving pleasing emotions to linger. If our loved ones choose to come along on our diversionary trips down memory lane, instead of grieving a loved one’s passing as my father did each time, they’ll be filled with joyful feelings and warm memories.

Brain cells are dying as the person with dementia struggles to remember. Like the holes in Swiss cheese, gaps cloud one’s memory. To survive, our brains attempt to fill in those holes. Sometimes, when we can’t tell the difference between reality and fantasy, we hallucinate, which people with dementia are inclined to do. See the example in the first caregiver tip.

While living with us, my father occasionally surprised me with, “Be quiet. She’s sleeping.”

“Who’s sleeping?” I’d ask.

“Ma,” he’d reply. “When I got up this morning, she didn’t budge, so I covered her and quietly closed the door so she can rest.”

“Oh,” I’d play along. “We know how hard she works. OK, we’ll talk softly.”

Such an exchange affirms his view of the world. He feels his message is understood. This is especially important for people with dementia. It is frustrating to not be able to get one’s meaning across. As the disease progresses, aphasia, or language impairment, makes communicating one’s ideas increasingly difficult.

World-renowned for her breakthrough Validation Therapy, Naomi Feil, advises that to better empathize and communicate with cognitively impaired people suffering from dementia, that we enter their reality. This four-minute You-Tube video overviews the approach. There is no harm in believing the sky is orange. Sometimes, when the sun is rising or setting and the clouds are just right, it does have hues of orange.

The benefits of therapeutic lying with validation allow the person with dementia to maintain dignity and elicit a continued sense of purpose and the desire to communicate for as long as possible.

 As the years have passed, I have begun advocating for therapeutic lying and sometimes even find myself giving the one-word response the dry-humored nurse once gave me: Lie.