Estate planning attorneys need to help parents take care of their caregiving adult children as well, according to Kathryn Adams, writing about the impact of caregiving on adult children for the American Academy of Estate Planning Attorneys. “The costs associated with caregiving add up over time and often put adult children in a difficult position. While they’re spending money caring for their parents, it often means they’re unable to put money into their own retirement funds.” Aside from out of pocket costs, she points out, many caregivers must take time off from work to administer care or at least to drive parents to doctors’ appointments.
How much money are caregivers spending on average? Adams provides some eye-opening statistics:
- Nearly half spend more than $5,000 annually
- 16% spend as much as $9.999
- 11% spend as much as $19,999
- 5% are spending as much as $49,999
- A parent can leave the child an additional amount through a will or trust. (“If a parent chooses to go this route, it is important that the parent explain his or her reasoning to any other children or family members that might be upset.”)
- If a parent doesn’t have cash to compensate the child, the parent may transfer the house to that caregiver, (either through an outright transfer, retaining a life estate for him/herself, or through creating joint ownership).
- If the parent qualifies for life insurance, the child can be made beneficiary.
- Medicaid planning advantages of different transfers and other tactics
- Tax consequences of different strategies
Estate planning should be done to take care of caretakers!
- by Ronnie of the Rebecca W. Geyer blog team