As our family members age, taking care of their financial and medical needs becomes increasingly important. Having conversations about the realities of aging early on can help ease the emotional stress that comes with it – providing a cushion for both you and your loved ones in case any conditions like dementia set in quickly down the line. With proactive planning and by utilizing the strategies listed below, families can ensure that their older loved ones are well-supported through this stage of life.
Understand Income and Expenses
Understanding an older loved one’s income and expenses is essential to ensure that bills are paid and checks are not bounced. In addition to looking at paper statements, find out what’s on autopay and if there are expenses that happen at various intervals (e.g., yearly subscriptions, quarterly donations). Then learn all about your loved one’s income– its source, and the amount. Knowing what money must go out and what their regular income is could help you plan to cover unexpected expenses when they appear.
Prepare for Large Expenses
It is estimated that people caring for their aging loved ones could lose more than $300,000 in wages and retirement funding. So, if you know you will be caring for a loved one, it is important to plan. Planning for your family’s large expenses and your aging loved one’s expenses can help reduce financial stress when the time comes.
Tax Considerations
If you plan to have your aging loved one live with you, you can claim them as a dependent if they make less than $4,400 per year. You may also qualify for a tax credit for in-home care services.
Execute a Power of Attorney
A power of attorney is a legal document that usually goes into effect when the principal can no longer make decisions for themselves and lasts until they pass away. There are two commonly used powers of attorney: the non-durable power of attorney, which deals with finances, and the medical power of attorney.
The financial power of attorney designates an individual as an agent to make financial decisions on behalf of the principal, who can no longer do so for themselves. This document can provide direction on what accounts a power of attorney can access and how they may be used.
A medical power of attorney grants the agent the same powers the principal would have had if they were still competent to make decisions about their healthcare for themselves.
Having these documents executed before someone begins to decline mentally makes the process easier because there does not need to be court intervention.
Finish the Process of Creating a Complete Estate Plan
Getting a complete picture of your loved one’s financial situation is essential for taking care of your loved one in the best way possible. An estate planning attorney can help you finish the job by creating the remaining documents your loved one needs to age as independently and securely as possible. Contact us today to discuss your needs and options; simply call our Minnesota elder law attorney at 763-244-2949 to schedule a consultation.
