Financial lessons learned from caring for an elderly parent


It’s been nearly two years since my father wrote a letter to us two sons that his “slipping memory” made him stop using e-mail. Since then I’ve learned way more than I really wanted to know about managing his affairs, and I’ve included the four most important lessons at the end of this post.

Dad’s a retired engineer who’s been widowed for almost 25 years. For a number of understandable reasons, after Mom’s death he gradually disengaged from family and society. He’s accustomed to living a simple life in a small apartment and hiking his favorite mountains, coming home to spend his time with his books and his computer. Among us three men, it’s “normal” to swap only holiday e-mails and to get together just once or twice a decade. I live over 3000 miles from Dad and my brother had a five-hour drive over dicey roads.

But Dad’s letter promptly earned him a visit from both of us.

By the end of our afternoon together it was clear that Dad was showing Alzheimer’s symptoms. He knew what was happening but he’s fiercely independent. He was coping with it by using lots of calendars, engineering-style checklists, & reminder notes. We suggested various forms of “help”, and as expected he politely yet firmly declined them all.

Whatever generation you’re in, we’ve all seen the media presentations on how to have “the talk” with your parents about their affairs. We all know we need an “emergency” folder, a will, a medical directive, powers of attorney, and perhaps more complicated arrangements like a trust. We’re all supposed to sit around in a relaxed and neutral setting– ideally a local restaurant or coffee shop– to discuss how to take care of each other. We young ‘uns start the awkwardness by reassuring our parents about the arrangements we’ve made to ensure that their grandchildren will be taken care of if we’re unable to. Then we’re expected to tactfully steer the conversation to their own arrangements: how can we help them? Everyone puts together their paperwork, copies are handed out, and we all share a big Norman Rockwell family hug. Great.

Dad’s always had a current will & medical directive plus comprehensive files. No problem there. He said he’d execute powers of attorney “when the time came”, but he wasn’t ready yet. After our visit I consulted a local geriatric care manager and was advised that we couldn’t do much more than wait for Dad to ask for help. We had no legal authority. Pestering him would only alienate the entire family.

How do you urge someone who’s three time zones away to keep in touch when they can’t use e-mail and can’t hear the phone? Snail mail. I wrote a letter every few months, and I usually got a response. My local geriatric care manager (I couldn’t have handled this without her) referred a couple geriatric care managers in Dad’s town who agreed to respond to emergency phone calls. For my Dad’s insistence on independence, that was as good as “keeping in touch” was going to get.

Yet we still lacked legal permission to help with Dad’s affairs. He didn’t want to “complicate” the decision-making by delegating authority.

In retrospect, Dad’s cognition deteriorated sharply last January. He handled Alzheimer’s for at least two years before it all fell apart. When he lost the ability to care for his health, he ended up in the emergency room with a perforated duodenal ulcer. He came within an hour of dying but the surgeon figured out the conflicting symptoms and pulled off a quick miracle.

You already know what Dad wanted to do as soon as the staples came out: go home. The reality was that we had no legal authority to interfere. 24/7 home care, however, was estimated to cost over $10K/month.

I inherited Dad’s persistence, and I used it. Because Dad lacks a short-term memory, during his 10-day hospital stay we had “the talk” another couple dozen times. I repeatedly stressed the safety of a care facility where he could still have privacy while going through rehab. But he still insisted he was going to “finish his business trip, check out of the hotel, and go home”. As discharge day approached, the doctor had to bluff assert his own authority: Dad could complete his recovery in the hospital or at a skilled nursing facility. We didn’t even mention the “go home” option. We spent the next few days on frantic teamwork among my brother, two sets of care managers & lawyers, and the hospital’s discharge coordinator. I waved my credit card around with wild abandon and the team found a good skilled nursing facility. Then I drove Dad to my brother’s city (over those five hours of dicey roads) and Dad checked into the facility to begin his rehab therapy.

Was our coercion legal? Probably. Ethical? Absolutely.

Dad’s recovered from the surgery and he’s doing as well as mid-stage Alzheimer’s allows. In a surprise about-face, he’s tremendously relieved not to have to manage his own affairs any longer and he loves not having to spend all day on chores. He’s happy at the care facility and he wants to stay there.

But we still have no legal permission to help with Dad’s financial affairs.

The medical paperwork is fine. All three of us have signed a stack of medical powers of attorney, HIPAA releases, and “Do Not Resuscitate” orders. Dad’s wishes are clear, and I have years of his old letters to document his current desires. No problems there.

His finances are good. Medicare covered the first couple months (the hospital was over $50K alone) and Dad’s Medigap insurance covered the deductibles. His pension’s prescription plan (nearly unheard of today) covers all but a small copayment. With his simple lifestyle, he’s been spending less than half of his pension/Social Security for the last decade. He has a fantastic long-term care insurance policy and he’s built up his own investment portfolio.

I’ve learned all of this from his files. I just don’t have the legal authority to do anything with it.

It’s been over five months since Dad left the hospital. Since then we’ve spent over $6000 on geriatric care managers, lawyers, and psychologists to document Dad’s need for us to handle his affairs. (The care facility’s expenses, and filing the claim for long-term care insurance, is a completely different issue.) We’ve made several trips to his town to sort through his apartment, sell off his furniture, bring his personal possessions back to him, clean things up, and break the lease. Next week our lawyer will file the petitions for guardianship and conservatorship, and hopefully this will all be worked out over the next two months– plus the final couple thousand dollars of legal bills.

That’s the price of Dad’s independence.

We should have handled this differently. The legal community greatly prefers revocable living trusts because they cover both incapacity and probate. It’s a wonderful theory but in practice, many trustees neglect the paperwork. Most people balk at the legal costs of setting up the trusts, and Dad would have been suspicious of the triggering mechanisms for successor trustees. However if your family is willing to consider a trust (and maintain it) then it should work when needed.

Adding our names to his checking/investment accounts would have solved everyone’s problems… at first. However if an adult child is sued over their own assets, and if they’re joint owners of an elderly parent’s assets, then hypothetically the parent’s assets are also at risk. It can be difficult to maintain joint accounts through life’s changes, too. My brother’s near Dad but bro works long hours and has no interest in managing Dad’s finances. I’m too far away to help in person so I’m happy to take care of the finances, but if I was in the service then it would’ve been hard to help from the deployment. Of course joint accounts work fine between spouses. If I wake up incapacitated tomorrow, my spouse can open our “Emergency” folder and pick up where I left off with no surprises.

A durable power of attorney sounds great, but personally I think it’s an urban legend. The first thing you learn when you’re holding a durable power of attorney is that nobody has to respect it: banks use their own forms, brokerages have their own ID verification procedures, and different corporate lawyers have different definitions of “durable”. I haven’t investigated this option in over a decade, and I sure hope things have changed since then, but I’m skeptical of “one POA fits all situations”.

A power of attorney (on the financial institution’s forms) works well (as long as the grantor wants you to keep on using it), but I now know that a hospital recovery ward is a terrible place to notarize legal documents. Even if Dad was competent and willing to sign a power of attorney (and if we managed to bring a notary into his room for the occasion), he was in no condition to do so. A notary would have been quite justified to decline the transaction.

The good news is that Dad is safe, physically healthy, and as happy as he can be. He’s managed to sign some checks and letters to pay the bills. We’re cleaning up the rest and we’ll work out the reimbursements later. But with what I know now, I’d go back to that magazine article about “the talk” and add a few paragraphs:

Lessons learned?
1. We don’t learn. My grandfather did this same dementia crisis on Dad in the 1980s. (14 years in a care facility.) Yet Dad never figured out the right way to let us sons step in for his own incapacitation, and I didn’t know enough to take charge. In his case it should have been a POA in his “emergency” files for his checking & brokerage accounts, updated every year or two. For spouses it might be a joint checking/brokerage account or an alternate trustee’s springing authority in a revocable living trust. Legal technicalities aside, a stack of old POAs can be a big help in persuading a skeptical bank branch manager (and a notary) that you’re acting in your parent’s best interests.

2. Do the paperwork while you still can. When Dad declined to set up powers of attorney, I should have said “I understand. Don’t to give them to us until you’re ready, but complete them now in case you get sick and want help taking care of things while you’re getting better. I can’t bring the notary to the hospital.” I’d help him get the forms from his bank & brokerage, I’d get them completed & notarized, and then I’d make sure Dad had them on file where we could reach them– not necessarily a safe-deposit box but certainly a secure place where we’d know to look for them.

3. Make it easy for people to understand our benefits. (This is especially critical if you’re a military veteran.) I’m pretty good at finance but even I was blissfully ignorant that I was so blissfully ignorant. My father has an “If I wake up dead” letter and a medical directive, but not an “If I’m in the ICU” letter. That letter would have said “I’m covered by Medicare (you’ll need my SSN) and my Medicare co-payment is covered by my insurance (here’s the name of the company and the policy number) and my prescriptions are covered by Medco (here’s my number).” A “Basics of Medicare and Medigap Insurance” flyer would have been a bonus. My wife and I understand each other’s military benefits, of course, but now we’ve explained them to our college daughter. We’ve also included the checklists of veteran’s benefits that each service supplies in their retiree newsletters.

4. If you’re an adult child of an elderly parent, then you need an emergency fund. You may spend several thousand dollars of your own money on your parents (and their bills) before you’re able to reimburse yourself. In our case, my spouse and I have our bills on autopay from our joint checking account that receives my pension deposit. If I’m incapacitated, she doesn’t have to do anything. If I die, she just has to transfer money over to our account while she probates the will and takes over the bills.

This might be a good time for you to check your family’s papers to see if you’re ready to take care of each other. If you or a loved one is in Hawaii, I know an excellent geriatric care company that can help. I hope this post persuades at least one other reluctant elderly parent to really have “the talk” while they still can.

Related articles:
Book review: The Complete Idiot’s Guide to Social Security and Medicare

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WHAT I DO: I help you reach financial independence. For free. I retired in 2002 after 20 years in the Navy's submarine force. I wrote "The Military Guide to Financial Independence and Retirement" to share the stories of over 50 other financially independent servicemembers, veterans, and families. All of my writing revenue is donated to military-friendly charities.

6 Comments
  1. Good article. Great advise. Why does it look easier and simpler on paper when you’re reading it rather than when you’re living through it?

    • Thanks!

      I have to admit that if I’d known enough to stick to my guns a couple years ago, then having the paper would be a lot easier & simpler. A POA turns out to be an awful lot cheaper than proving to a state court that your elder needs your care.

      Our lawyer is filing the conservatorship & guardianship petitions “any day now”, which means that we’ll be put on a calendar for a probate court date at least 30 days away.

  2. Thanks!

    We’ll get guardianship & conservatorship, although the courts make it a bit complex to have conservatorship from a different state. I might be able to do the court hearing by phone or by Skype, but I’m supposed to sign an extradition waiver with Dad’s state…

    Before you start “the talk” with your grandfather, it can be a tremendous help to hit it off with a geriatric care manager in his neighborhood. We ended up using three of them (in my town, Dad’s town, and my brother’s city) and I couldn’t have done it without them. They’ve seen it all, and they’re thrilled to get a request for help before it’s a crisis. They’re able to walk through ideas for your talk with your grandfather, and they’ll be standing by if he wants help.

  3. This is a fantastic article on a difficult topic. I hope that you are able to gain the legal authority to care for your Dad as you have already been doing.

    I really need to have “the talk” with my nearly 90 year old grandfather, but I am loathe to do it. Must get up my nerve next time we’re home :)

  4. This is the best article I have read on this issue. This is the one that you should submit to Get Rich Slowly. I “hear” you.
    Right now I am dealing with my mother. She lives 1400 miles away and one (out of the four) other sibling (who live in the same town) is willing to help me help her. It is REALLY frustrating. There is an assumption- because we are retired- that we are wealthy enough to run two households- ours in Kansas and mine in Phoenix when I am “helping” my mother. It is beyond frustrating.

    It has opened up a few discussions about our own care. Are you getting long term care insurance? Do you intend on getting Medicare supplemental insurance? What do you suggest for the spouse that has not had a career because they were following their spouse’s career? All questions we talk about—-sometimes.

    • Thanks!

      It sounds like J.D. is burning out on caring for his own mother’s dementia. At least my father had copious files and I didn’t have to do much forensic accounting. But it’ll take an entire morning just to change an address or swap correspondence with a business. I’m also “lucky” that my brother wants nothing to do with the financial responsibility (while I have the family reputation as “the money guy”) so the division of labor was pretty clear for us.

      We don’t have LTC insurance, although in our mid-60s we’ll take another look at the federal program. Spouse’s Reserve pension starts at age 60 so we could hypothetically self-insure.

      I thought that the $3500 annual premium for Dad’s Medigap policy was a waste of money– until he racked up the $50K hospital bill (plus rehab). But he has health issues whereas I & spouse are working darned hard on our cardiovascular systems. We’ll take another look at that situation at age 64.

      The career-following spouse absolutely needs the Survivor Benefit Plan, of course. Tricare For Life seems to take care of retiree medical (so far). Medigap insurance can be a deal for veterans (without a military pension) if the premiums are low enough, but it’s a tough call.

      I’ll have to do some research with the Early-Retirement.org health-insurance experts and on Military.com to straighten out my misconceptions, and then I’ll turn it into a blog post…

    Comment? Question? What's on your mind?