Special Needs Financial Planning
My father suffered from early onset dementia prior to his death in February. He was 77 when he passed away on a cold winter Sunday – 1 week after celebrating his 51st Wedding Anniversary.  Dad’s progressive cognitive decline began about 7 years ago. Mom called one day to say she was concerned about Dad’s ability to continue to manage the finances on his own. It was the Fall of 2010 -  I was pregnant with Emily at the time that I flew to Omaha, Nebraska to help. This visit – one I recall as if it was yesterday - represented a shift in our relationships. Roles changed, I was no longer the child, I was becoming a member of a new club – one called The Sandwich Generation

The Sandwich Generation represents individuals who are both raising their own children while they are taking care of their aging parents. The Social Security Administration states that 1 in 4 65-year olds will live to be older than 90, and 1 in 10 will live to be older than 95.  I know that I am not alone, there are many women and caregivers who are members of this Club!

It is estimated that by the year 2020, women are going to control 67%
of the U.S. Wealth according to a study by Fidelity Investments. The majority of primary caregivers for children and elderly parents are women.  In fact, the number, according to the National Alliance for Caregiving is 66%. 47% of adults in their 50s and 60s have a parent
age 65 and older living with them who are also caring for their
own children.
I spent three days at my parents home with the intent that during that time, I would be able to “take over” the finances from Dad after I figured out “what” they really were.   How hard could this be, I am a Financial Advisor - this is what I do for a living? 

I brought along a Red Spiral 3 Ring Binder and was prepared to:

  • Evaluate my parents’ Net Worth (Assets – Liabilities),
  • Determine their income, spending, and savings, and decide if they had “enough” in case they lived another 20 or 25 years. 
  • Understand their plan for managing the WHAT IF's in life which would include Death (Life Insurance, Longevity (Long Term Care Insurance), Funeral Planning, etc.  
When I arrived, and shared with Dad why I was there, I knew he was anxious, and concerned.  I could understand that it was not easy for him to relinquish the role that he had during his marriage as the one who handled the finances.  He was retired, so this was his “only job”, and he took pride in it. 
In those three days we:
  • Opened all of his Lock Boxes - they were filled with Treasury Bonds, and Insurance Policies.
  • Reviewed his Coin Collection - it was hard to tell Dad that his Quarter collection probably wasn't worth much!
  • Online Access - Dad would write checks, and didn't use that thing called the Internet.  But, we  needed online access to ALL of the accounts so that I could begin to manage them from afar.  
We accomplished a tremendous amount in those 3 short days.  It was a bit more work then I had experience with my own “clients”, mainly because it was so personal.   The end result of this time together was me feeling a tremendous sense of relief that Dad had done a lot of great planning, it was almost as if he knew what his fate was going to be with the financial decisions he made for himself and his family.
Life Insurance
  • Dad purchased Life Insurance policies right after he and mom were married back in 1966. These were policies that were permanent, meaning they didn’t expire. In addition, these policies provided both a Death Benefit and a Savings Vehicle (Cash Value). He had held these policies for so long, he no longer needed to pay premiums as the policies funded themselves.  There was savings built up which allowed us another financial tool to use if their income needs were not sufficient at some time during their retirement.  Fortunately, Dad had paid off the mortgage of their home, and was focused on using the proceeds of the Life Insurance Policies for their Final Expenses, as well as Legacy Planning for his children and grandchildren.   

  • Children’s Life Insurance Policies – Dad also bought policies when each of my brother’s, and sister and I were born.   These too were permanent insurance policies that built cash value.  The Death Benefit was only $25,000 but he locked in our insurability upon our birth, paid very low premiums for many years, and gave these policies to us as a gift when we turned 21.  This gave us the opportunity to have some type of insurance as we started our careers. We could choose to continue paying premiums to build up cash value, and to make the policies paid up.
Long Term Care Insurance
Dad decided 17 years ago to purchase a Traditional Long Term Care Policy when he was 60 years old and mom was 57. This policy cost each of them $1300 a year ($2600), and would reimburse up to $170 a day ($5270 a month)if they needed care in the home or in a facility.  Although, at the time I was relieved to know that Dad had the foresight to invest in this type of insurance protection, it would be four years before I would really understand it’s value.   

$92,378 is the median cost in 2016 of
a private nursing home room in the
US – up 1.24% from 2015 (Genworth). 

This Long-Term Care policy paid for the In Home Care that Dad received the last 3 years of his life.  The care was not only for Dad, but to relieve Mom as his main caregiver from the exhausting responsibility and work that comes from caring for a loved one with Dementia.  Although we didn’t “use” the policy up – the $40,000 in care that he received was worth every bit of premium paid.

50% of Americans underestimate the cost of in home long-term care. (Genworth)
Estate Planning
Dad had a Will and a Revocable Trust Set up – but we needed to re visit his existing legal documents, and to add a few things to them.  We knew that over time his cognitive decline would require a need for Legal Documents which would include a Health Care Power of Attorney and Financial Power of AttorneyClick here to learn more about these important documents.

I would be the Financial Power of Attorney which would allow me to manage bill payment,  have access to his existing investments, and insurance accounts, and to ultimately make financial decisions on his behalf.  My sister – a Nurse and Acupuncturist took the role of Health Care Power  of Attorney. I added a call to their Attorney to my list of Follow Up Items. 
Funeral Planning
Dad and Mom had taken time – with my sister’s urging to prepare their wishes when it came to all of their funeral plans.  They had written down which funeral home they wanted services in, whether they wanted a casket, or to be cremated, even down to the details of what songs they wanted to play at their funeral. The only thing they had not done was go to the Funeral Home to Pre-Pay their services.
I added this to the list of something to research and consider.
My trip to Omaha that Fall of 2010 was one where much was accomplished. As I was leaving for the airport, my Dad was taking a nap – something Mom said he would do every day. I stopped in to say my goodbye, and noticed that Dad was crying. My Dad was a tough, bullheaded Irishman, and I could count on one hand the amount of times I saw him cry in my lifetime.  Mom said this was part of the dementia.  I asked him what was wrong, and he shared with me that this change, having his daughter come to “take care” of him was something he never could have imagined would be necessary. "It’s not how it was supposed to be".  I hugged Dad and told him that I am thankful I have the knowledge to help him but most importantly I was proud of all of the planning that he had done to protect himself, mom and his children, to manage the “what if’s” in life that may have required his children needing to financially take care of him.

As I reflect on the past seven years upon his passing, I too am proud of the work we did together.  As a Financial Advisor, I personally understand that life doesn’t always go as planned.  But life happens as do things that you can’t always plan for.  However, in my personal and professional experiences, I have seen how the decisions made during one’s lifetime do make a difference down the road, and in the end.  As difficult as it was to transition from being a child, to now a caregiver for my parents, and a member of The Sandwich Generation , I am so thankful we spent that time early on before my Dad’s decline was too much that he couldn’t assist me with helping him.  
  • 70% of adults said it is difficult to discuss financial decisions with family, especially discussing care for an aging parent.  (Forbes Magazine 2016)
  • $324,044 Total estimated lost wages, pension, and Social Security benefits for the average female caregiver.   (Metlife 2011)
... to all who attended my presentation on April 26 at GiGi's Playhouse Milwaukee!
Below are some pictures of the successful event.
Kathleen and Sumeeta with Board Members of GiGi's Playhouse
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