Our children grow and leave the nest. They go off to college or perhaps to start a career and family of their own. After a while, we are often drawn into parenting again, this time with our own aging parents or another family member.
The transition to parenting our parents usually begins slowly. There are four important items to consider as this shift begins.
Making Room for Change
- Living Arrangements. Preserving a parent’s independence as long as it is safely possible is critical. It is not easy to leave your home. This loss of independence can feel like a shift in power, and the loss of comforting and familiar surroundings takes adjustment. If possible, ask a parent where they wish to live, if unable to live at home, and do it well before the situation arises. When it comes to family harmony, open communication is vital. Let’s say a parent is beginning to show signs of dementia. A family meeting can be helpful to determine who has the time, resources and willingness to provide a place to live. If living with a family member is not appropriate, discuss alternatives for if and when living at home is no longer feasible.
- Who Gets Paid? If a parent will live with a child, it may be appropriate to pay rent to the child or to pay them for caregiving. Agreements for rent and caregiving payments should be put in writing, both to preserve family harmony and for Medicaid planning. If Medicaid is later needed, those payments might be deemed gifts by the parent, thereby potentially affecting Medicaid eligibility. In addition, these rental and caregiving payments to a child will likely have income tax consequences to the child. Ensuring that all family members are aware of payments ahead of time can eliminate later grievances.
How do you pay for a long-term care stay? Nursing facilities are paid for with your own money, long-term care insurance and sometimes Medicaid, a needs-based program. Advance planning is critical to avoid problems with its complicated regulations.
- Decision-making. The final issue is who will assist a parent with health care decisions and finances. If a parent is no longer capable of making their own medical or financial decisions, a child may need to go to court to become a guardian unless a parent has executed a Health Care Power of Attorney and Durable Financial Power of Attorney. The Health Care Power of Attorney allows the parent to appoint a child (or whomever he or she wishes) and successor(s) to make health care decisions for them if their physician determines that they can no longer make informed health care decisions for themselves.
This conversation should not stop with appointing someone to make healthcare decisions. A parent should explain what type of care, including end-of-life care, they want.
A Durable Financial Power of Attorney allows a parent to appoint a child (or any other trusted person) to handle their finances. There are many authorities and powers that can be granted in these documents and they should be reviewed with an attorney.
These conversations are not easy. Take advantage of the upcoming holidays to discuss these issues with loved ones to help avoid problems later. If you’re trying to decide what documents to use or measures to take, get legal advice. There’s no one-size-fits-all approach; every family is different.
Jennifer E. Peck is a partner at the law firm of Solomon, Steiner & Peck, Ltd. in Mayfield Heights. She specializes in estate and Medicaid planning, taxation and probate.
