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Spring 2013

June Current Thinking Column

Wednesday, June 21, 2017

The Parental Aging Tidal Wave

by William Roberts
Partner, Aspen Family Business Group

The following entry by Bill Roberts shares his personal reflections on the demographic phenomenon we are all seeing: a huge wave of elderly parents entering a phase of increased dependence and death. The mobility of our society combined with the health care that helps people live longer has made this transition a difficult one for families. Bill offers great advice from his own experience personally and professionally.

 

As I circulate among the world of privately held business owners, family businesses, and the advisors to these owners a common theme has emerged almost always accompanied with a somewhat surprised look of puzzlement.

“What in the world am I going to do with my parents and their stuff?”

In whatever form it might take, the owners or advisors have recently encountered in their own situation or that of friends a loss of capacity or, in several cases, a loss of aging parents. What then follows are story after story of the quagmire they found themselves in trying to unwind boxes of financial information: "stuff" to be sorted through and disbursed to family members who likely could care less or the simple act of cleaning up and throwing out the 50-60 years of accumulated history of their parents.

The people I am encountering are very smart people and well aware of current trends. Most are good planners in their own right, yet to a person all of them agree that they were woefully unprepared for the quagmire they found themselves in, the legal entanglements that kept them from settling their parent’s affairs and most of all the emotional and time drain that this situation required of them. We found dealing with the social security/Medicare/Medicaid system a challenge in dealing with our own parents. It became so frustrating that we did what we probably should have done at the beginning, hire an elder care specialist and an elder care attorney to walk us through the maze of government regulations and paperwork.

One of the common themes is the inordinate amount of time the care taking requires. I have often read of very successful daughters who have to quit high paying jobs to devote themselves to the care taking role for their parents. The process puts an incredible emotional drain on the marriage and family life of the caretaker as the relationship with spouse and children suffers and sometimes ends in a divorce. Even the very process of wading through boxes of stuff and making decisions about what to keep and what to sell or give away is time consuming and emotionally draining. One friend of ours commented "cleaning out our parents’ house was one of the most difficult tasks I have ever undertaken".

Often parents have sold businesses and moved to Sunbelt cities far away from their children and support network. As their skills diminish their ability to manage their affairs becomes less and less and problems begin to emerge. Can they still manage their checkbook? Can they make rational decisions regarding contributions to the endless mailings from political and charitable predators? Who helps them manage their mail? They are often fearful of throwing away mailings with their address fearing the information will fall into even more predators. Mail piles up in a frightening manner. Giving up the checkbook often becomes a battle between caretaker and parent...be prepared!

The experience of many is that the suggestion of moving to assisted living is often met with significant resistance by their senior generation. This is a tough generation, used to being and living independently and like all of us having a deep connection to the home they are used to living in. The very thought of moving out of familiar surroundings into an assisted living environment is frightening to them even in the most dire of circumstances. It is the giving up of the very independence that has made them so successful that is an anathema to them. The alternative is to hire a caretaker or for one of the family members, often the daughter, to assume the role of caretaker. According to a USA Today study, there are 29 million such caretakers in the United States today.

A second challenge mentioned by many is the continued driving of the family car by the senior generation. My mother drove until she was 102 despite efforts to get her to give up her keys to her Pontiac Sunbird with a spoiler on the rear deck. When I questioned our caretaker for my Mom about her driver's license renewal on her 100th birthday, she laughed and told me that my Mom knew I did not want her driving and she had already taken the driving test and had her license renewed. To which my son replied, "I am never driving in the state of Georgia again"! While this was a humorous situation in our family, the danger to themselves and to others is very real. Macular degeneration and other debilitating illnesses affect the ability to see and judge speed and distances. Misjudgments abound endangering those around them resulting in the decision by the family that "we have to get the car keys away from the parents."

That is often easier said than done. I spoke with one daughter whose father was suffering from dementia as well as other physical ailments. She told the story of her father who she remembered as a loving caring man, but as she attempted to discuss giving up the car keys, he screamed at her and used language she had never heard him use before. It was a horrible experience for her and one that left emotional scars for her to deal with at a later date. This story is repeated over and over again, like their home, the automobile is a symbol of the parent’s independence, their ability to "go to town" when they pleased is very difficult to give up. As my son later observed, after we finally talked my mother into giving up her keys,

"If you think getting your mother's keys was difficult, wait until we have to take them away from you"!

And he is absolutely correct!

Having prior conversations about these very difficult subjects while everyone is cognizant and rational is vital. Having an agreed upon plan, discussing the transition with elder care specialist is an important step to developing a cogent plan of handling what is in most cases an inevitability. There are legal issues, the need for a Durable Power of Attorney which is effective in the state where the parents live, because it will become one of the most used documents that the caretaker or the family has in their arsenal. Durable Powers of Attorney are effective if the elderly person becomes incapacitated. Without it one cannot deal with bank accounts, securities accounts, pension administrators, financial advisors, medical facilities and insurance companies. We learned that the Power of Attorney in our case expired when she did. Had we not put another family member on checking and savings accounts, those accounts would have been frozen until cleared by a probate process, often a long and sometimes expensive process.

Our situation with our parents was not unique. As it becomes more common for people to live longer and apart from their family and old circle of friends, it is far more likely that the children who step up to help will have almost no familiarity with their parents financial life, what bills needed to be paid immediately, what were annual bills versus monthly expenses. Often there are multiple checking and savings accounts. Sorting all those out can require time and frustration with endless telephone voice mail systems and parents who cannot remember much about their finances. This is often accompanied by a deterioration of their health situation, demanding endless trips to doctors or hospitals. All of this is as you would expect: time consuming and since we are dealing in something we have never done before, filled with missteps and frustrations.

All of this can lead, even in the most understanding of families, to tension between siblings as one or more take on the role of caretakers. Resentments build up towards siblings who make no or little effort to pitch in and help with the parent’s situation. In talking to elder care attorneys and listening to their experiences, they tell story after story of these family battles precipitated by the perceived inequity in the care taking responsibility. This can lead to deep rifts and emotional stress which eat away at the fabric of the family.

Then comes the decision, "what do we do with the family home now that the parents are in assisted living?" Keep it, rent it, or sell it are all alternatives. But in our case the house was across the country in a small town with a limited rental market, and while in a good area, if left uninhabited could have been subject to home invasion, even someone trying to live there on an extended basis. There are also tax issues. If a house is sold prior to the death of the parents, there may be capital gains to pay on any increase in value over the parents purchase price. Holding the real estate until after the parent’s death under current law allows the house basis to step up to date of death value thereby avoiding any potential capital gains tax. Consulting tax experts can help in coming to a rational decision.

Assuming the decision is to sell, what to do with furniture that is often dated, not very well kept, and not desired by any of the family becomes a problem. A few cherished items may be kept by family, and hopefully who gets what has been sorted out prior so conflict does not arise when more than one sibling wants Dad's prize $12,000 shotgun - and a fight ensues. What to do with the rest?? There are companies that will come in and for a fee, auction off or take all the left over furniture and "stuff". In our case a "silent auction" was held and people from our church and other friends bought almost all of the furniture remaining. But whatever the result, having a plan between family members laid out well in advance will save hours of agonizing decisions. The second rule is to have the parents begin to sort through and throw out things defined as "stuff" they have been saving for decades (ex. I still have college textbooks--they go post haste). The children or grandchildren do not want the stuff and only items of historical interest to the family should be conserved.

An example of this, a friend of ours, who has lost both sets of parents, related a personal story over a dinner discussion of this dilemma. She has begun an "I am Dying Day", which she communicates to friends. On this day she spends the entire day sorting through their her considerable "stuff" and throwing away those items she believes none of their children have any interest in. This is so far a month’s long project dedicating one day every two weeks to sorting out and getting rid of things. She has thrown away boxes and boxes but admits there is still much to be sorted out. A morbid but effective approach in removing much of the mess the children would have been faced with.

We learned much from our experiences while seeing our parents lose capacities and eventually living through their passing. While emotionally draining, there were lessons to be learned. One, appreciate what we have while we have it. As the skills diminish, the ability to communicate and have those precious conversations will forever be gone. Gather as much of the family history as possible and preserve it for future generations. But practically, while people don't like dealing with the tough issues with their parents when they are healthy, it is much more difficult dealing with them after the tsunami hits and mental cognitive abilities are diminished. Develop a plan of action agreed upon by the family and the parents. Unfortunately, this problem is inevitable and approaching at a rapid rate. It is time now to develop a plan of action. Please set a deadline and set the family meeting to discuss a plan of action and then put your plan into motion!

Tools to help:

  1. Plan ahead with your parents. Having prior conversations about these very difficult subjects while everyone is cognizant and rational is vital. Make sure that all offspring are involved in a conversation about plans and responsibilities.

  2. For the “elder” generation, be sure you document your goals and wishes for your care, disposition of assets and where everything is kept (e.g. safe deposit boxes, insurance documents and passwords!). For a great “checklist” for this, see Bonnie Brown Hartley’s book “Sudden Death: A Fire Drill for Building Strength and Flexibility in Families”

  3. Regular “purging” of possessions.

  4. Hire an elder care specialist and an elder care attorney to walk us through the maze of government regulations and paperwork.

  5. Make sure that someone has legal access to manage financial matters.

  6. Interview (and video!) elder generations about their stories and memories so that these can be preserved for future generations

 

See also:  Before it’s too late: A Continuing Story (about Leslie Dashew’s experience taking over her father’s financial affairs) 


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