A crisis situation limits choices
It is too easy. Too easy to avoid this conversation. And we get that. It can feel difficult and awkward and scary. After all you’re admitting that your parents’ health is in decline. It’s also likely your Mum and Dad will feel defensive; they will have no desire to leave the family home.
But this isn’t about organising aged care for them before they need it, or limiting their independence before they’re ready. Or telling them they’re not coping when they still are.
It’s about having financial and personal plans in place. So that if and when aged care becomes a necessity, after a fall or other medical emergency, the process is much smoother. Less overwhelming, less time-consuming and less stressful – and potentially less expensive too.
Leave the conversation too late and in a crisis, there will be fewer options for them.
Raising the topic
One of the scariest things for people as they age is not feeling in control any more. Planning ahead means they can reduce feelings of powerlessness and fear.
It is hard to know how to broach this topic. But you could point out that you simply want them to feel in control. If they start thinking about their options and finances now, they’ll feel more comfortable with what will happen in a medical emergency – rather than rushed and helpless.
If it feels too formal to bring up the topic over lunch or while all sitting together, you could try while you’re doing something alongside each other – such as cooking, gardening or driving. It can be easier to talk about difficult things when you’re not literally face to face, at least when raising it for the first time.
Make sure you’re simply discussing ideas and options and letting them make their own decisions, rather than providing direct advice which they may resent.
They will naturally want to retain control and independence – but that is exactly why you are all discussing this now, rather than waiting until they are no longer in a position to say what they prefer.
Remember, there should be no pressure on your parents to make decisions on finances or care at an early conversation stage. The truth is that it will never be just one conversation. Plant an idea about planning ahead, then step back, be patient, and bring it up again later. You will all need time to reflect and talk again another time.
What to talk about
With early planning you will be able to access advice on how best to navigate the confusing maze of government services, money management options and aged care choices.
Whether they will need home care packages or to move into a residential home, you and your parents will be dealing with MyAgedCare, the Department of Human Services (DHS)/Centrelink, and if applicable the Department of Veterans’ Affairs (DVA).
Either the DHS or the DVA will carry out the income and assets test for means-testing, and the government’s MyAgedCare service manages applications and care assessments. There is a lot more information available about the process at www.myagedcare.gov.au.
Your Mum or Dad can request that you or another family member acts as their representative when dealing with MyAgedCare, the DHS/Centrelink and DVA.
There is an intricate relationship between income, assets and aged care fees; and the wrong decisions can negatively impact on your parent’s finances and their means-tested fees.
In addition, some families choose not to complete the assets and income assessment, thinking they’ll be required to pay full fees anyway – but this can have unintended and expensive consequences, even down to which residential homes they can apply to.
Planning ahead with a financial adviser who specialises in aged care planning enables your parents’ financial situation to be the best it can be.
Financial planning strategies can help your parents to:
- maximise income and entitlements
- minimise aged care fees and consider tax implications
- ensure the Residential Accommodation Deposit is covered (this can be between $300,000 to $500,000 in the Hunter area)
- make the money last as long as possible
- protect their estate.
A specialist aged care financial adviser will also provide Mum and Dad with projections for ongoing income and aged care fees management, and how long their money will last. They can also assist when circumstances change, and manage financial hardship applications.
The adviser will ask if Mum and Dad have set up Enduring Power of Attorney and Enduring Guardianship, which will enable their affairs to be effectively managed if they no longer have capacity.
They will also ask if Wills are in place and up to date with their wishes.
Aged care choices
It’s not automatically about residential care – home care may be an option for them depending on circumstances. But with nursing homes/aged care facilities, if you plan ahead it is possible to put your name down on a waiting list for preferred facilities. This will give your parents priority if and when the time comes, rather than having limited choices when faced with large waiting lists.
Some parents may want to visit aged care homes themselves, so that they have a real say about their preferences.
Keep on talking
When your parents are ready they may wish to start the process of discussing their finances and what their wishes are in more detail. Be flexible, act as a sounding board, and remember that their needs and wishes may change over time.
Consider how they feel and make sure you’re not crossing the line from caring to controlling. Your parents will want to feel cared about – but will resent being cared for.
If they are capable of making their own decisions now they will be able to talk to you about their wishes, and be actively involved in setting up their own financial plan.
Make sure you know where all their important documents are held. Here are some of the key things to cover:
- Understanding their preferences for residential aged care
- Their financial situation and whether financial advice is needed (or has been received) to plan for aged care fees – including whether or not to sell the family home and how this would impact on their pension, tax and care fees
- Key decision makers – is there a Power of Attorney, Enduring Guardian already in place?
- Documents and passwords – banks, insurance, tax, superannuation, investments, pensions, financial advisor and so on
- Health and Medical – all previous, ongoing or recurring health conditions; a list of current medications; Medicare number; health insurance details; GP contact details
- Will – where is the Will and is it up to date with their wishes?
Aged care advice is a highly specialised area and not one that many financial planners cover, due to the complexity of frequently-changing legislation.
A good aged care planner will:
- Advise on strategies for making the most of your parent’s money, no matter how much or how little they have
- guide you through the whole process when the time comes – advising you what needs doing and when
- take work away from you – completing reams of paperwork and liaising with Centrelink on your behalf, freeing up your time to focus on your parents instead.
The sooner, the better.
In our experience, in a crisis the timelines are tight and the pressure high as emotional families struggle to navigate a complex system and avoid rushed, expensive decisions. Planning leads to choice and a sense of control. You and your parents will have time on their side to investigate properly and set things up exactly how they want them.
To plan ahead – or if your family needs assistance with entering aged care now – simply call John Allenspach at Southern Cross Financial Planning on 02 4058 1953 or click here to Contact Us and we’ll call you back.
Clear advice on planning ahead was invaluable
“We hadn’t given any thought to planning for aged care because Mum and Dad were living independently in a retirement village. But when Dad passed away suddenly, the big question was ‘what is the situation with Mum’s finances?’ And there was aged care for Mum to consider.
John helped us to organise everything. He explained things in a way that made it easy for us to grasp; he kept it simple and clear.
Now Mum is in aged care and the early advice we received about planning ahead, and the help John gave us in structuring the finances for Mum, was invaluable.”
Brenda, Charlestown (daughter)
Learn more about our Aged Care Financial Advice – click here.
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