ElderCare Planning

Elder Care Planning: Continuing Care Retirement Communities (CCRCs)

 In last month's post, we talked about Assisted Living as a housing option for older adults.  But do you know about CCRCs or Continuing Care Retirement Communities? CCRCs are an option for those older adults who have the financial means to support this type of housing. 

What is a CCRC?

In general terms, a CCRC is the most comprehensive of all housing options that can satisfy the needs/wants of those older adults who are healthy and active, as well as those who need assistance and those who need skilled nursing care.  The structure of these communities provides individual residences (usually in the form of an apartment or condo) for independent living, but provide options within the community for assisted living or nursing care. Once you move to the CCRC, you never have to move again!  CCRCs are not for the financially faint of heart – they generally require a buy-in/entrance fee and a monthly service fee.  However, most communities guarantee that once your are approved and have moved in, you will never have to leave, regardless of your future financial position,.

How, might you ask, do CCRCs look when we view them in the context of our 4 “C’s”(Comfort, Convenience, Companionship and Care)?

Peace of Mind and Comfort Knowing You Never Need to Move

As an older adult, making the decision to move from your home is a big one – one that you likely don’t want to make more than once.  Moving to a CCRC allows you to make that decision only once. No matter what needs you have as you age, they will be provided for in the CCRC.  You should make sure that you are aware of how possible transitions will work within the specific communities that you look at and the financial impact of each. Especially for married couples, there may be significant additional financial costs if one needs assisted or nursing care and the other remains independent.

Convenience of…everything!

CCRCs provide most conveniences of everyday living:

  • Transportation if you can’t or don’t want to drive on your own.
  • Activities – usually a full gym, clubs, social activities, classes and entertainment on community grounds, as well as organized trips off campus.
  • Restaurants, banks and visits from dentist, eye doctors, etc. are generally available on campus.
  • Services of all kinds are usually available (maintenance and cleaning for your residence; food plans so you don’t have to cook, etc.)

Companionship of All Kinds

In working with clients who live in CCRCs, I have found that they can always be around people and be busy…if they want to be.  The options available to interact with others that have similar interests are many…usually more than you have time for.  I have found that moving to these communities, for many, has resulted in an improvement in quality of life.

Care at Every Level

Ideally, you consider moving to a CCRC when you are completely independent and have no need for assistance, so that you can engage in all that these communities have to offer.  However, if and when assistance is needed, you can be certain that it will be available.  Assistance can be provided within the independent living units or within the community at a different location – every level of care can be provided for without another move being required.

If you or someone you know thinks they may need to look at the possibility of moving to a CCRC, I recommend (as always) to plan ahead AND to consult your financial planner to make sure that your finances are sufficient.   Please contact me if you need additional resources or have additional questions about this or other housing options.

Sandra Adams, CFP® is a Partner and Financial Planner at Center for Financial Planning, Inc. Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In 2012-2014 Sandy has been named to the Five Star Wealth Managers list in Detroit Hour magazine. In addition to her frequent contributions to Money Centered, she is regularly quoted in national media publications such as The Wall Street Journal, Research Magazine and Journal of Financial Planning.

Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

Any opinions are those of Sandra Adams and not necessarily those of Raymond James. C14-028648

Elder Care Planning: Assisted Living

 In last month's post we talked about how most older adults would prefer to age in their own homes (age in place). This is often possible for a lifetime, but for some, physical and/or cognitive decline makes it necessary to look at housing options that provide care on-site. According to the recent Legg Mason study on Aging Clients, the national average cost to live in an assisted living community is $3,500 to $5,000 a month.

As we meet with our clients, we find that there are several reasons why looking for an assisted living community makes more sense than trying to age in place. These reasons can be reviewed looking at the 4 "C's": Comfort, Convenience, Companionship and Care.

Comfort in Knowing Care is Available

An older couple may find that they can no longer safely assist each other.  One person may require more assistance than the other, but caregiving can be extremely difficult and can often put the healthier spouse at risk for harm.  Or a widowed client, without family able to help, may find that bringing care into the home becomes too cost-prohibitive as the need for more hours of assistance escalates.  Just knowing that a qualified care provider is available within the community at all times can provide comfort in the way of peace of mind.

Convenience of Resources

Assisted Living communities, while they are not "home," can provide conveniences not available to those who choose to age in place.  Meals are provided, so it is no longer necessary to cook.  Care providers are available on-site.  And things like transportation and organized trips are readily available.

Companionship Right Outside the Door

One of the biggest challenges for older adults can be socialization and companionship.  An assisted living community allows individuals the space to be by themselves, when and if they desire. But when having a conversation with someone is desired, it is literally right outside the door. Community rooms, small gathering areas, and organized social activities are readily available, providing a way to stay engaged and connected.

Care is Always There

The ability to make a call and have a care provider available in a moment's notice can be invaluable for older adults, especially those who are alone.  Knowing that help is near can also ease the burden of worry.

If you or someone you know thinks they may need to look at an assisted living community in the future, I recommend (as always) planning ahead.  Begin by researching assisted living communities that will fit your specific needs:

  • Vicinity to your home community and/or to family members
  • Services provided by the community fit your needs
  • Comfort level with the community and the types of residents

Include your family members in the discussion – consider potential challenges, resources and options. And last, but not least, take a look at cost.  Discussing the financial impact of future housing decisions with your financial planner is important and can help ensure financial independence for a lifetime.

Sandra Adams, CFP® is a Partner and Financial Planner at Center for Financial Planning, Inc. Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In 2012-2014 Sandy has been named to the Five Star Wealth Managers list in Detroit Hour magazine. In addition to her frequent contributions to Money Centered, she is regularly quoted in national media publications such as The Wall Street Journal, Research Magazine and Journal of Financial Planning.

Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

Any opinions are those of Center for Financial Planning, Inc. and not necessarily those of Raymond James. C14-028648

Elder Care Planning: Aging in Place

 In last month’s Elder Care Planning post, we looked at the 4 “C’s” when it comes to housing decisions for older adults; Comfort, Convenience, Companionship and Care. For many, those factors add up to a desire to “age in place.” According to a recent AARP survey, nearly 90 percent of those over age 65 want to stay in their residence for as long as possible and over 80 percent believe that their current home is where they will always live.  The MIT AgeLab reports that close to 90% of all Americans do, indeed, age in their own homes.  So, when it comes to aging in place, what challenges and opportunities come into play when we look at the 4 “C’s”?

Modifying for Comfort

Many people are most comfortable in their own homes.  However, comfort also includes “safety” and this can be a challenge as an individual ages.  Choosing to age in place means planning ahead to make sure that the current living situation is safe as health and mobility changes occur.  There may be a need to have the home modified or remodeled to make aging in place possible.  This can include things like widening doors, adding grab bars, adding a walk-in shower, moving the laundry room to the first floor and adding a chair lift or elevator to a two story home.  These changes can be expensive.

When Convenience Vanishes

The ability for individuals to stay in their own communities and be near people and places they know is of great value.  Depending on the location of the home, it may become a challenge to get to those places that once seemed so handy.  Mobility and transportation may become an issue, which means that it’s important to plan ahead and find resources to help.  Finding a friend, family member, or hired caregiver to assist with mobility and/or transportation can be a solution.  Also, try researching local Area Agency on Aging and Senior Centers that offer transportation services.

Finding Companionship

Once an older adult is on their own in their own home, one of the biggest challenges can be companionship.  Staying social and engaged is vital to successful aging, so for those who live alone, it is important to stay connected.  For some, that means engaging often with family members, friends, and neighbors.  For others, that means finding ways to get to social events, church services, classes, or other activities out of the home.  This may mean hiring a companion or caregiver who can visit several times a week. 

Care at a High Cost

The care component can be the most costly from a financial perspective for those who choose to age in place.  As individuals age, particularly those with chronic health conditions, care needs can be significant.  For some, there are family members and friends who can assist.  However, many people must hire caregivers to provide medical and non-medical assistance.  For those who need full-time care and assistance, the cost to age in place can be high … $10k  - $15k a month*! This is an expense many cannot afford. 

Working with a planning team, including a financial planner, can help older adults plan for what might lie ahead. By identifying future challenges, you can put resources in place.  Planning ahead provides the best opportunity to live the life you wish – at home or elsewhere.

In future posts, we will look at additional housing options for older adults.

This is one post in a running series that addresses Elder Care planning topics.  If you have a specific question or issue you’d like addressed, please contact me at Sandy.Adams@CenterFinPlan.com.

Sandra Adams, CFP® is a Partner and Financial Planner at Center for Financial Planning, Inc. Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In 2012-2014 Sandy has been named to the Five Star Wealth Managers list in Detroit Hour magazine. In addition to her frequent contributions to Money Centered, she is regularly quoted in national media publications such as The Wall Street Journal, Research Magazine and Journal of Financial Planning.

Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

*Source: The 2012 MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services, and Home Care Costs

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Center for Financial Planning, Inc. and not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. C14-025162

Elder Care Planning: Housing

 Who will change my light bulbs? How will I get an ice cream cone? Who will I have lunch with? These three questions have been the crux of intense research at the MIT AgeLab. Researchers there believe answers to those questions will provide invaluable insight when addressing issues of housing and quality of life for older adults.  The questions can also serve as great conversation starters to address the all-important question, “Where will I live as I age?” This question is often avoided until a crisis occurs.

I am finding the housing issue is coming up more and more often as I meet with older adult clients and their families.  For most, the decisions are less about the money (although the financial component is an important one) and more about the 4 “C’s”:  Comfort, Convenience, Companionship and Care.  Think about MIT AgeLab’s 3 questions with the 4 “C’s” in mind:

Who will change my light bulbs?

Consider who will do the day-to-day maintenance tasks and make sure that the living environment is safe and comfortable. If the older adult cannot do this on his or her own, bring in help to the home or move somewhere that provides these services.

How will I get an ice cream cone?

More than just ice cream, consider how the older adult will be able to access the big and small things that make them happy.  Answers to these questions may help determine where it might be feasible to live based on transportation challenges/needs, proximity and availability of shopping, worship and entertainment.

Who will I have lunch with?

Many older adults face a decline in the number of friends and relatives in their social network; socialization is vital to happy and healthy aging.  Consider availability and access to other people in the older adult’s social network when reviewing housing options.

The options for housing are many – age in place (may require home modifications), independent living retirement communities, assisted living, and Continuing Care Retirement Communities, and many other variations.  It’s important to fully consider the challenges, preferences and current and future needs when making the decision. And a team of advisors, including your financial planner, can help you consider the options.

In future posts, we will look more closely at each of the most common housing options in more detail.

This blog is part of an ongoing series that addresses Elder Care planning topics.  If you have a specific question or issues you’d like addressed, please contact me at Sandy.Adams@CenterFinPlan.com.

Sandra Adams, CFP® is a Partner and Financial Planner at Center for Financial Planning, Inc. Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In 2012-2014 Sandy has been named to the Five Star Wealth Managers list in Detroit Hour magazine. In addition to her frequent contributions to Money Centered, she is regularly quoted in national media publications such as The Wall Street Journal, Research Magazine and Journal of Financial Planning.

Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

Any opinions are those of Center for Financial Planning, Inc. and not necessarily those of Raymond James. C14-020079

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Eldercare: Roadmap for Aging Parents encourages Team Approach

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From financial strain to the emotional effects, there are many layers to the issues a family faces as a parent ages. At a recent Center-sponsored event, Eldercare: A Roadmap for Aging Parents, our expert on eldercare issues Sandra D. Adams, CFP® teamed up with Peter Lichtenberg, Director for Wayne State University’s Institute Of Gerontology program and Becky Eizen of Feinberg Consulting.

Eldercare Topics of Conflict

When it comes to the most common “topics of conflict” between aging parents and their caregiving adult children, Lichtenberg recommends developing new and more positive communication strategies. One such strategy includes:

1. Learning your older adult’s story

2. Expressing your views and feelings to them

3. Problem-solving together

When a parent and adult child take a team approach with open lines of communication, the important decisions that come with eldercare can be much easier to make.

Caregivers Finding Balance

Caregivers often get lost in the mix and finding time to take care of your own needs can be difficult. There are emotional, physical, and financial effects of being a caregiver and Becky Eizen says you need to know when it’s time to ask for help. That includes knowing how to ask for help, finding the right resources, considering your options, and putting together the right team. It’s important to look at short- and long-term needs and identify different housing options, such as living at home vs. assisted living facilities. Eizen says one question that can be overlooked is: Do you qualify for VA benefits?

Eldercare Resources for You

The Center has a list of resources that available from both speakers.  If you would like more information, call or email Gerri at Gerri.Harmer@Centerfinplan.com. We have a wealth of information on the subject and would love to share it with you. Contact Sandy if you want to know how we can help you build your eldercare team.

Any opinions are those of Sandy Adams and not necessarily those of RJFS or Raymond James. The opinions and services of Peter Lichtenberg, Becky Eizen, WSU Institute of Gerontology, and Feinberg Consulting are independent of Raymond James. C14-018035

Elder Care Planning: Dementia Rates and What They Mean to You

 Getting out of bed, getting dressed, feeding, and bathing … they are all simple acts that can become daunting, even impossible for millions of Americans struggling with Alzheimer’s disease and other dementias. As the population of those 65 and older continues to expand, so do the dementia rates.

According to the Alzheimer’s Association’s 2014 report, by 2050 half of the population 65 and older could have Alzheimer’s disease. The current statistics aren’t quite so startling, but they do shed light on the scope of the issue:

  • One in nine people age 65 and older (11%) has Alzheimer’s disease
  • About one-third of people 85 and older (32%) have Alzheimer’s disease
  • Alzheimer’s disease is officially listed as the sixth-leading cause of death in the United States

Alzheimer’s disease takes a heavy toll on women in two significant ways. First, almost two-thirds of Alzheimer’s cases in the country are women. The report attributes this to women living longer, on average, than men, and older age being the greatest risk factor for Alzheimer’s. Also, the burden of caring for someone with Alzheimer’s disease often falls on women. These unpaid caregivers are often immediate family members, but can be relatives or friends.

In 2013, these individuals provided an estimated 17.7 billion hours of informal (that is, unpaid) care, a contribution to the nation valued at over $220.2 billion. This is approximately half of the net value of Wal-Mart sales in 2012 ($443.9 billion) and nearly eight times the total revenue of McDonald’s in 2012 ($27.6 billion).” -Alzheimer’s Association 2014 report

Given the statistics, doesn’t it make sense to plan ahead for the possibility that your family might be affected?  The time is now to make sure that you have all of the important pieces of a plan in place:

  1. Make sure that there is a plan for financing future long term care costs
  2. Make sure all appropriate legal documents are in place
  3. Make sure that your family has discussed and intentionally planned for the kind of care and living arrangements that are preferred
  4. Make sure that you know and understand the resources that might be available

If your family doesn’t have those 4 bases covered, contact your financial planner to schedule a family meeting to discuss these and other important issues. 

Sandra Adams, CFP® is a Partner and Financial Planner at Center for Financial Planning, Inc. Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In 2012-2014 Sandy has been named to the Five Star Wealth Managers list in Detroit Hour magazine. In addition to her frequent contributions to Money Centered, she is regularly quoted in national media publications such as The Wall Street Journal, Research Magazine and Journal of Financial Planning.

Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. C14-013764

Elder Care Planning: Difficult Conversations

 

People almost never change without first feeling understood."

Douglas Stone, author of Difficult Conversations, How to Discuss What Matters Most

There will be many times during your lifetime when you must approach difficult subjects with loved ones. It seems that some of the most difficult conversations for adult children are those conversations with older adult parents, especially when the discussions involve potential changes in lifestyle.

Some common difficult topics to discuss with an older adult parent involve:

  • Downsizing and decisions related to moving or bringing help into the home
  • Driving and transportation alternatives
  • Financial issues and financial capacity
  • Family relationships
  • End of life planning

Ideally you are able to have family conversations with your older adult parent before there is an urgent need for action. However, if this isn't the case, it is important not to rush in and demand that changes be made (i.e. need to move from current home, stop driving, change registration on accounts to joint or take over financial affairs by way of conservatorship or guardianship). Attempting to impose your wishes for change on someone who has been in charge of their own life for as long as they can remember will likely be met with negative reactions such as refusal, defensiveness, denial, and possible irreparable damage to your relationship. On top of that, the situation will remain unchanged and your fears for your parent’s safety and well-being will remain.

Even when the need for change may be urgent, attempt to approach your older adult parent with respect and a desire to give them as much control over their situation as possible. Consider using the CARE conversation model developed by Dan Taylor, author of the Parent Care Solution to help you to have meaningful and productive conversations with your older adult parent

CARE Conversation Model

Challenges - What challenges does your parent currently have or see in their future related to living situation, health/care, and finances?

Alternatives -- What options does your parent want to consider to address these challenges?

Resources -- What resources can you identify to address these challenges (family, financial, community, government, etc.)?

Experience -- What is the experience your parent would like to have as they age?

It may be helpful to hold a family meeting with the help of your financial advisor to discuss these very important issues. An impartial party, like your advisor, can help ask the difficult questions and ensure that all concerns are heard. Your advisor can also help to document the conversations and help to develop a formal action plan to address issues of concern.

 

Sandra Adams, CFP® is a Partner and Financial Planner at Center for Financial Planning, Inc. Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In 2012-2014 Sandy has been named to the Five Star Wealth Managers list in Detroit Hour magazine. In addition to her frequent contributions to Money Centered, she is regularly quoted in national media publications such as The Wall Street Journal, Research Magazine and Journal of Financial Planning.

Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

Any opinions are those of Center for Financial Planning Inc. and not necessarily those of Raymond James C14-012699

Have you had “The Talk” about Health & Housing?

 There are plenty of conversations that can make us feel squeamish, reluctant, or just downright uncomfortable. As a parent of three kids ages 20, 18, and 11 I have gotten comfortable with “The Talk” you have with your children. For me, the first time through was given with a discernable quiver in my speech, but as they say, practice makes perfect.  Lately, “The Talk” I find myself having with a lot of clients is the one about Health and Housing. Frankly, I am not sure which one is easier, but I do know they are both important! 

What is your Housing Plan?

As comprehensive financial planners, we are concerned with helping our clients lead a more fulfilling life.  As you age, health and housing become critical elements that can determine the success of your retirement plan.  Clients used to ask, “Will I have enough for retirement?” Now what I hear is, “Can I afford the type of care and housing I want?” This “Talk” is so much more than a conversation about nursing homes.  Do you want to live in the three-story home where you raised your family?  You know, the one with all those stairs and the lovely yard that seems to need so much attention?  Have you had an expert come into your current home to suggest safety measures such as rails and bars in key areas?  Is a first-floor condo in your future?  Should you consider moving closer to one of the children? Should you buy or rent/lease? Do you want to involve your children or others in the conversation?

If you’ve asked yourself any of these questions, it's a sign that you need to have “The Talk”. Only you can determine the correct answers and, while “The Talk” can be a little intimidating and uncomfortable, the decisions will be much better if you develop a plan before a health or financial crisis. We are here to help.

Timothy Wyman, CFP®, JD is the Managing Partner and Financial Planner at Center for Financial Planning, Inc. and is a frequent contributor to national media including appearances on Good Morning America Weekend Edition and WDIV Channel 4 News and published articles including Forbes and The Wall Street Journal. A leader in his profession, Tim served on the National Board of Directors for the 28,000 member Financial Planning Association™ (FPA®), trained and mentored hundreds of CFP® practitioners and is a frequent speaker to organizations and businesses on various financial planning topics.

Any opinions are those of Center for Financial Planning, Inc. and not necessarily those of Raymond James C14-012690

Elder Care Planning: Preparing an Aging Parent for Financial Capacity Challenges

 Financial capacity is one of the first abilities to decline as cognitive impairment appears, whether due to the slowing down in older age or a more specific dementia diagnosis.  Anyone with an elderly parent should be prepared to face the challenges that can come with diminished financial capacity. The first step in preparation is to understand what you and your mother or father may be facing. Quite literally, financial capacity refers to a person’s ability to manage money and financial assets in ways that meet a person’s needs and which are consistent with his/her values and self-interests.  Financial capacity includes basic skills like identifying and counting money, understanding debt and loans, handling cash transactions, paying bills, and maintaining judgment to act practically and avoid exploitation. Given that, for most of us, the loss of some financial capacity is inevitable, these are some risks and how to prepare your family:

Financial Management Challenges – most often, the ability to handle the day-to-day money management becomes a challenge.  This may mean that things like handling incoming checks and bills or balancing the checkbook become difficult.  In these instances, bouncing checks, not paying bills when they are due, and not filing tax returns are commonplace.  It goes without saying that this can cause a multitude of problems (not to mention, extra cost).

Fraud/Financial Exploitation -- more and more we are hearing about occurrences of financial fraud, with older adults being the most targeted victims. Financial fraud and exploitation can come in many forms, including but not limited to theft of checks (Social Security, pension, etc.), theft or unauthorized use of ATM or credit cards to access funds, and tax fraud.  Many times, a trusted friend, family member or caregiver is the one taking advantage of the older adult.

What can you do to prepare to help you and your aging parent avoid these potential risks?

  • Make sure to have an update General/Financial Durable Power of Attorney naming a trusted family member or friend in place. 
  • Consider having a Revocable Living Trust drafted that names a successor to handle things in the case of financial incapacity; appropriate assets should be titled in the name of the trust.
  • Get your aging parent to communicate with his or her current/future Power of Attorney and/or Successor Trustee (and appropriate family members or friends) about money goals and values.  In addition, make sure all of his or her financial information is documented and organized in the case that someone needs to assist with financial matters in the future (consider a tool like our Personal Record Keeping Document and Letter of Last Instruction for this purpose).
  • Help facilitate an introduction between your parent’s current/future Power of Attorney and/or Successor Trustee (and appropriate family members or friends) to his or her  financial team (financial planner, CPA and estate planning attorney).  Make sure that each member of the professional team has authorization to talk to (1) other members of your professional team and (2) family members or friends that might assist in the future. 
  • Make sure that the chosen financial planner has a written Investment Policy Statement in place for managing your love one’s investment portfolio.  This written document outlines goals, risk tolerance, asset allocation preference and needs related to your parent’s investments. 

By working with a professional and personal team to plan ahead for the possibility of financial incapacity, you give yourself and your loved ones the best chance to avoid the risks to future financial independence.

This is the second in a monthly post (2nd Thursday of each month) that will address Elder Care planning topics.  If you have a specific question or issue you’d like addressed, please contact me at Sandy.Adams@CenterFinPlan.com.

Sandra Adams, CFP® is a Partner and Financial Planner at Center for Financial Planning, Inc. Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In 2012 and 2013, Sandy was named to the Five Star Wealth Managers list in Detroit Hour magazine. In addition to her frequent contributions to Money Centered, she is regularly quoted in national media publications such as The Wall Street Journal, Research Magazine and Journal of Financial Planning.

Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

The information in this material does not purport to be a complete description of the issues referred to herein. Any opinions are those of Center for Financial Planning, Inc. and not necessarily those of Raymond James. You should discuss any legal matters with the appropriate professional. C14-009365

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The High Cost of Dying

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 Death is the inevitable end of life and most of us do not spend much time thinking about it or the cost. According to the National Funeral Directors Association the average funeral can exceed $10,000 when you include cemetery costs. How we memorialize our loved ones is dictated by religious, cultural and societal practices, which may increase the cost dramatically.

Three Options for Funeral Planning

Most funeral practices are regulated at the state level with recent efforts to standardize practices through the national association. There are several ways to prepare for funeral costs.

  • Final Expense Insurance is a low-cost whole life insurance with face values in the amounts of $5—25,000. An advantage of these policies is the ease at which they can be obtained. The disadvantage is the proceeds do not necessarily have to be used for funeral expenses.
  • Pre-need Funeral Contracts are basically insurance policies. The money is placed into a trust, as regulated by most states. Clients should receive information on the policies over the years.
  • Funeral Trusts allow individuals to pre-pay funeral services so the money will be available when needed. Again, most states require the money to be put into a master trust, appropriately invested with clients knowing the name of the institution where it is held and receiving periodic reports.

Funeral Rule Legislation Protects Relatives

One of the most significant pieces of consumer protection legislation is the Funeral Rule, enforced by the Federal Trade Commission. This rule makes it possible for consumers to purchase only those goods and services they want, rather than an entire package of goods and services offered by the funeral home. Funeral homes must provide a general price list that includes all items and services the home offers and the cost of each one. Generally, this rule provides:

  1. A person has the right to choose the funeral goods and services they want
  2. The funeral provider must give a person a general price list that states what is wanted in writing
  3. If state or local law requires individuals to buy any particular good or service, it must be stated with references to the law
  4. The funeral director cannot refuse to handle a casket or urn purchased somewhere else
  5. Funeral directors that provide cremations must make alternative containers available to consumers
  6. Individuals cannot be charged for embalming if not authorized

This legislation was passed to counteract many abusive practices that existed within the industry.

In addition to the cost of funerals, the biggest assistance living individuals can give to their loved ones is to leave their wishes on what services they would like for themselves. These wishes should be stated in writing and placed where they will be found. It is recommended it not be in the will, which may not be discovered until after the funeral. It is a great gift to the family to know they are providing the type of service their loved one desired.

Any information is not a complete summary or statement of all available data necessary for making an investment decision. Any opinions are those of Center for Financial Planning, Inc. and not necessarily those of Raymond James. You should discuss any legal matters with the appropriate professional. C14-007746

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