Here's the things you should do right now to take care of your family's finances (because planning is love)
Financial planning expert Beth Pinsker on estate planning as a form of caregiving.
These are some of the hardest conversations I’ve had: Where do you want to live when you’re older? (Translation: Where do you want to be when you’re dying?). What do you want your care to look like if you get sick? (Translation: What do you want me to decide about keeping you on life-support?).
And then there are the questions I don’t ask: Will there be money for my kid’s college? Will there be money for me?
Talking to your parents about their aging, and planning for their passing, is just not easy. My go-to source on these questions is Courtney Martin, who has written movingly about caregiving for elders for years. (You can read her beautiful essays on her Substack, The Examined Family)
But recently I wanted just a good, practical to-do list. I turned to Beth Pinsker, a no-nonsense financial planner, a longtime columnist for Marketwatch, and the author of the book, My Mother’s Money: A Guide to Financial Caregiving.
She describes the steps she took to take care of her own mother when she was sick and then dying: everything from negotiating home health care to managing Medicare. She is a great person to sit down with if you want the brass tacks on how to make sure that when your parents’ time comes — or your time comes — you have what you need in place to make sure those taking care of you aren’t left in the lurch.
“It’s just love,” Pinsker told me about estate planning. “It’s not a to-do list item when it’s love, because we do lots of hard, expensive, extraordinary things out of love.”
We talked about her new book, including advice for dealing with difficult siblings, the affect that Prince had on people writing their wills, and more.
Let’s start with the most practical thing for those of us with older parents. What are one or two things that people should have in place right now?
Immediately you need a durable power of attorney and a health care proxy. These are very easy to come by. You can download them for free. A lawyer will put together a whole package for you. But if you just need those particular items, they shouldn’t cost more than $90 to $100.
And what do these things do for you?
The durable power of attorney lets your parent assign somebody emergency powers if they cannot act on their own for financial matters, and the healthcare proxy is the same thing, but for medical issues. So that’s for when you need somebody to make medical decisions for you, where you’re going to live, what kind of care you’re going to get.
If you do not have those things, this is where you get immediately stopped.
And is there a third thing?
The phone is the key to people’s lives these days. And I’ve had people say, “Oh, I know my mom’s passcode. I know my kids’ passcodes.” You don’t. You might know it right this second, but there comes a time where they might not even know it. They might change it without thinking that they have to tell you. If you do not know that phone code, and they are not available to open in, you are as brick walled as anybody has ever been. Even the FBI can’t get into a locked phone.
So how do we get access to their phone?
So there are settings on your phone called Legacy Contacts, and it allows you to set a beneficiary for your phone. It takes 30 seconds to go into your phone settings. You say, “Mom, give me your phone and you go, boop, boop, boop, boop, and you’re all done.”
So now I want to talk about siblings. How do you negotiate with a sibling about who’s in charge of what, especially if you’re the woman who’s obviously going to end up being the primary caretaker?
So there are two answers to this question, because there are happy families and there are unhappy families. I subscribe to the idea that all families are unhappy, they’re just differently unhappy.
Wow, ok.
Most families I’ve come across, and most people who ask me questions, there is somebody in the family who is causing trouble. There is a jerk. There is a narcissist.
So keep your friends close and your enemies closer. My strategy is to find something inconsequential for the problem person to do. They have to feel involved. The most problematic troublemakers in every family feel left out. They feel like stuff is happening that they’re not aware of. There’s a group chat going on somewhere that they are not on, and they get mad about it. If they know that they are included in some way, they calm down a lot.
Ok, but what if I’m the terrible person in my family? What if I’m the narcissist, but I want to do better?
First of all, you only hear the bad sibling stories from the good siblings, and the bad siblings never recognize that their behavior is bad. It’s part of what makes them bad.
So what if you genuinely had two good siblings and they’re both in there trying to help with mom’s care? Is there an easy division of labor, or does it just break down to who’s physically closer?
It depends on the situation. With my brother and I, we physically split the time. I would go for a week, he would go home. He would go for a week. I would go home. Whenever either of us had boots on the ground, we were fully in charge and taking care of what needed to be done there. We just handed it off to one another, because we both have jobs and kids and we needed to get home. I took the financial stuff because that’s my expertise. He handled the Abraham Lincoln trivia on Jeopardy. I hated talking to the doctors, and he was very good at talking to the doctors. The bluster and the narcissism coming from the doctors just triggered me. I couldn’t keep my patience. He could talk to them and bluster right back at them.
Nice.
We were there for each other. I would talk to my mom, I would notice something off. I would call him, and I would say, “Mom just told me this. Can you call her back and see if she does the same thing?” We supported each other.
So that’s a good sibling relationship.
Yes, and then give the bad sibling something inconsequential to do. Something very specific.
What do you do if you’re saving for college and you’re also facing caring for an aging parent?
And, also, and this is kind of sensitive, but how do you ask an aging parent who might need all their funds to care for themselves whether they are going to give anything toward the college fund? This feels like a terrible question to ask.
This a very good question. I just answered this exact question for somebody from Marketwatch. Her mom had just been diagnosed with dementia, and she had a teenager about to go to college, and she’s like, “What the hell am I supposed to do? Where do I even start?”
The thing is, you don’t have to pay out of pocket for your care of your parents. You are not legally required to, and you are not even morally required to. Part of the lesson of my book is you have to be comfortable spending their money on their care and possibly spending it down to zero. Before you put your money on the table, you have to spend down all of their assets. When you have spent down all of their assets, that’s when you start the process of applying for Medicaid.
A lot of people will try to put their own money on the table, but you shouldn’t be doing that at your own retirement’s expense, or your own child’s future.
Your retirement savings are the most important. You cannot ditch your financial situation for everybody else’s, because it’s one of those cliches: You have got to put your own oxygen mask on first. If you don’t save for your retirement and keep that a priority, your kids could be in the same position as you are in, trying to take care of your parents.
The thing is that – no matter how much money a person has – Medicaid pays for most of the nursing care in America. It’s very common to end up on Medicaid.
Yes, and there shouldn’t be any shame in it. First of all, Medicaid, like Social Security, is something you have paid into your entire life. Those Social Security and Medicare taxes, and Medicaid, come out of your paycheck every time you get a check. It is a return of money that you have contributed to the system.
And to be honest, with the cost of care today, there are very few fortunes that can outlast a 10 or 12 year dementia diagnosis. People have to end up on Medicaid because they simply can’t afford $200,000 a year of nursing home care, and memory care for a person with dementia. Millions of dollars go towards that.
So let’s go back to the big picture. What are the things that should happen at a family meeting to prepare for caregiving?
Well, everybody should put on the table what they’re able and willing to do. The parents have to say: Here’s how much money we have, here’s where we want to live, here’s how we envision this going. Then the kids have to say, “Well, I live in Chicago, and I’m able to contribute one visit every six months.” And then another kid, who’s closer, can come every two weeks with groceries and a home-cooked meal.
Okay, well, then what’s the next scenario?
Mom and Dad are going to say, we want to stay in the house. We want to not bother anybody and burden anybody. But that’s only going to fly for so long. The kids are going to want mom and dad to move closer to somebody, because the mom and dad never seem to realize what a pain in the butt it is when they’re far away and they need help.
So that meeting should be about really putting on the table what we can do, what we can contribute, and then get some reality check for the parents about if they’re far from any one kid, the impact that has. If they’re thinking about relocating, maybe they think about relocating closer to one of the kids.
A lot of people have demands that they never go to a nursing home, And it’s just not practical or enforceable.
I thought it was interesting that, when Prince died, the number of people writing their wills skyrocketed.
Right. Prince died and left a big mess behind, and people somehow associated that with having lived through it themselves.
You have to live through some of this hard stuff in order to understand the urgency and the love involved, and in order to say, “I don’t want that to happen to anybody who loves me. I don’t want to die and leave a big mess behind.” Prince’s case, 10 years later, is still in court, you know?
I try not to use the word estate planning. I try to call it caregiving.
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A fantastic post on a very necessary and mature subject. Wow. My mother was a very challenging person to have as a mother, and one of the best ways she loved me was by having everything in order when she died. I barely had to deal with anything. It was a way she showed me how much she loved me—doing all that work.
I want everyone I know to read this post and Beth’s book. Thank you!