Have you found yourself in the difficult position of taking over your elderly parent’s affairs? It’s not uncommon for adult children to take control of a parent’s finances when their health begins deteriorating and long-term care is on the horizon.
But how do you know when it’s time, and where do you start? From ClearWay Law, here’s what you need to know about stepping in to help an ageing parent.
COVID-19’s impacts on seniors living alone
The coronavirus pandemic led many families to reevaluate their senior housing arrangements. Elderly adults living alone have experienced extreme isolation and barriers to medical care during the lengthy pandemic. This highlighted the need for increased support for older adults.
Missed medical appointments aren’t the only way isolation impacts the elderly. Loneliness and social isolation are associated with mental health problems, cognitive decline, and rapidly worsening physical health among the older population.
How do you know when it’s time to intervene?
For some families, decisions about an elderly loved one’s affairs arrive sooner than expected. Signs that it’s time for more hands-on help include:
- Missed appointments, unpaid bills, and other signs of forgetfulness.
- Withdrawal from hobbies and relationships.
- Mobility problems, bruises, and injuries.
- Unexplained weight changes.
- Poor hygiene, housekeeping, and/or personal grooming.
Establishing power of attorney
The first step is typically assuming control of an elderly parent’s finances. Taking over a parent’s finances requires signing a power of attorney, a legal document that empowers you to pay bills and make financial decisions on your parent’s behalf. This type of POA is known as a general power of attorney or financial power of attorney.
Elderly Parent’s Affairs
Caregivers may also establish a medical power of attorney. A medical POA makes health care decisions for another person in the event that person becomes incapacitated. A medical POA advocates for a senior’s wishes as stated in an advance directive or living will and makes decisions regarding medical procedures, treatments, and records. The same person can act as both medical and financial POA or a senior can opt to split power of attorney.
A POA for an older adult with dementia or other major health decline needs to be enduring. An enduring or continuing power of attorney persists even if the subject loses mental capacity.
Making decisions for your elderly loved one
After establishing power of attorney, caregivers are faced with two big decisions about an aging parent’s care:
- Where should they live?
- What should be done with the family home?
The answers to these questions are closely intertwined. That’s because long-term care is expensive, and a senior’s home is among their biggest assets.
Selling vs. keeping a senior’s home
Should you rush to sell a senior parent’s home? Putting an elderly loved one’s house on the market immediately may feel heartless, not to mention the complications of selling a home during the coronavirus pandemic.
However, there are tax implications to holding onto a senior’s home too long. In order for a home to be exempt from capital gains under the principal residence exemption, it must qualify as a principal residence at the time it’s sold. Waiting to sell could mean extracting less equity from the home. That’s a big risk when many families rely on proceeds from selling a home to pay for long-term care.
It’s also easier to sell during COVID-19 than you might expect. 3D walkthroughs, livestream open houses, and virtual home staging add both safety and convenience for sellers during the pandemic. Selling a house is much simpler when only serious buyers need to step foot on the property.
Elderly Parent’s Affairs
Yet for some families, keeping the home could be the most cost-effective choice. That may be true if a parent doesn’t have enough equity to pay for long-term care but does live in an area with a strong rental market.
However, managing a rental property requires time, attention, and money. If a senior’s home is outdated or in disrepair, it may also require renovations. Do the math to decide if you’re better off relying on rental income or selling the property.
Assessing senior housing options
Most seniors prefer to live at home as long as possible, either independently or with the assistance of home care providers. But when aging in place is no longer an option, where’s the best place for a senior parent to live? Canadian seniors have a variety of supportive housing options including:
Best for adults who require assistance with daily tasks but don’t need skilled nursing care, assisted living communities range from small group homes to sprawling apartment complexes. Assisted living is also known as congregate care. These homes serve small groups of residents are commonly called residential care homes.
Assisted living pricing varies based on location and amenities. Pricing structure also differs from facility to facility, with some communities charging a flat rate while others use a la carte billing.
Elderly parent’s affairs can be complicated, so get legal advice.
This facilities provide specialized services for adults with Alzheimer’s disease and dementia. Memory care facilities are often part of a larger assisted living community or nursing home. Prices for memory care are higher than assisted living due to the greater level of care required.
Long-term care homes
Long-term care homes, or nursing homes, are the best choice for elderly adults with complex medical needs. LTC homes offer 24-hour nursing care and are operated by a mix of public, private, for-profit, and not-for-profit organizations. Residents in long-term care homes may qualify for government subsidies in their province.
Finally, some families opt to have their elderly parents move in. This can be an affordable option compared to institutionalized long-term care. However, multigenerational living isn’t a decision to make lightly. Moving an ageing parent into your home requires modifications to your home and habits, and not everyone is positioned to assume the responsibilities of a caregiver.
What to do when seniors refuse help
All of this advice hinges on one thing: Your elderly parent agreeing to relinquish control. But what should families do when a senior in need won’t accept help?
In extreme circumstances, it’s possible to obtain trusteeship and/or guardianship of an elderly parent. Trusteeship confers legal authority to make financial decisions on a person’s behalf. Meanwhile, guardianship gives authority over personal matters like healthcare and living arrangements.
While these options are available, obtaining a parent’s consent should be a top priority. Seniors may be more receptive to advise from a doctor, social worker, or spiritual advisor than their adult child.
It’s also important to give a senior time to process rather than expecting immediate agreement. Most older adults dread losing their independence but patience and a positive approach can help them come to terms with the situation.
Get help with elderly parent’s affairs by speaking to a law firm.
Taking over a senior parent’s finances isn’t an easy process for anyone. Not only must ageing adults come to terms with their waning independence, but there are a lot of legal hoops to jump through as well. When you need answers to your elder law questions, speak to a lawyer on the ClearWay Law website.