There is a workforce of millions of people who give their time, energy and even money every day taking care of others. It’s not the government, it’s not a corporation or a well-known nonprofit. Instead, average folks in all areas, income levels, geographic locations, careers, and background are literally volunteering their time and resources for others.
Statistically, more than 90 percent of private caregivers eventually provide some kind of financial help as well. It may be paying bills, paying for a copay, providing for food or transportation, or spending money to provide time and personal attention at someone else’s home.6 So here are some tips so the change doesn’t create instant havoc in your personal life:
1. Consider for Whom and When Your Role May Apply
Take 30 minutes or so and think carefully about whom in your life you may find yourself providing care for. Most folks think of spouses, children and relatives. That’s normal, but what about close friends? Will you commit to them as well?
2. Make Early Insurance Decisions
Long-term care insurance addresses what normal health insurance won’t: all the care expenses that occur after the immediate hospital treatment and drug prescription. And LTC can make a big difference with personal care for low cost now versus high costs later on indirect charges from a care service.
3. Educate Yourself
Every day (maybe 10-20 minutes) read about finance for caregiving or listen to audiobooks from libraries while commuting to work. Both will expand your knowledge greatly.
4. Don’t Forget Yourself
Caring for someone is an immense job and commitment, and it can overwhelm your own life. Don’t forget to protect yourself and your own health and sleep.4
5. Don’t Stop Working
You may feel your care commitment is essential and spouse’s income can cover you both while you care for someone else. Don’t do it. Throwing away this earning power literally gives up Social Security benefits, retirement savings, income to pay your bills, and assets you will need when it’s your turn for needing help or assistance.3
6. Consider How to Control and Protect
If you will likely be in charge of someone else’s finances, which is a huge and risky role, make sure you have a plan how to check every expense is valid and to protect yourself with documentation. Don’t take it all on yourself either; work with a family partner or similar so it’s not your word against everyone else.
7. Don’t Guess, Get Help
Find a trained financial resource whom you can work with for advice and counseling on how to proceed.8 This could be a lawyer, financial advisor, banking adviser or financial expert. They can give you an outside, objective perspective on how to deal with tough issues and protect yourself at the same time.
8. Consider a Tax Approach
If it applies, as in the case of a relative, for example, you may wish to incorporate the person needing help as a dependent.5 This is a huge commitment, but it also allows you to gain a value tax benefit for expenses you may otherwise never be able to deduct. Definitely talk with a tax adviser first before jumping into this option.1
9. Know When to Stop
You can’t solve every problem. You need to prepare yourself to know your limit of help and when you have to say no to a request. This will be emotionally hard, but you have to have your limits defined ahead of time.
10. Share the Burden
Too often, especially in families, one member is stuck with all the care while the others just enjoy visits and good times. Be bold and direct; where a burden should be shared make sure to engage those who should be involved.2
In all cases, make sure to keep your finances and money clear and separate from those you care for. It’s easy to co-mingle or throw resources together, but it’s a big mistake. And it could result in a legal mess for you later when relatives come hunting for inheritance alternatives they think they are owed from your bank account mixed up with their deceased relative’s estate.
At Prestige Wealth Management Group, we have many professionals that can help you with these complex situations. From financial planning, to tax and estate planning, we operate under one roof to help you make the right decisions for you and your loved one.
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.