Paying for Senior Living Using Family Funds: 5 Steps

How to Pool Sibling Resources When Paying for Senior Living

Unless you're an only child, it's unlikely you'll be going it alone to find -- and pay for -- care for an aging parent. And as with so many things involving siblings, that can be both a good thing and a bad thing. On the upside, you've got others to talk things over with, and hopefully you can divide up the workload and spread some of the responsibility around. On the downside, it means you can't just make a decision and act on what you think is best -- every choice will need to be weighed, evaluated, and discussed. And few things bring up as many complicated issues and feelings as decisions involving money. Here's a five-step plan to help siblings work together to pay for senior care.

1. Take Stock and Talk It Out

You can't talk about how much money you need to come up with until you know what you have, so start there. Lay out the cost of care, the resources your parents have available, and how much you still need to cover their care needs. Once that estimate is on the table, let each sibling say how much they feel they can contribute. If funds are still short, discuss as a group how you can dig deeper. What might each person be able to sacrifice to make this possible? Try to have all such discussions as a group to prevent anyone feeling "talked about" or ganged up on. Other strategies suggested by experts including involving your parent as much as possible in this planning process and getting legal advice regarding the important documentation involved in financial planning.

2. Deal Openly With Differences in Income

Talking about money is never easy, and when you're dealing with inequalities in income it gets even harder. But let's face it, that's the reality -- in how many families do all the siblings make the same amount of money? More commonly, the exact opposite is true. Some siblings may have high incomes and secure savings, while others may be living hand-to-mouth. So the next question is, how do you handle such disparities? Should the expectation be for everyone to chip in the same amount, or should you consider having siblings with larger incomes contribute more than siblings who earn less? There's no hard-and-fast rule, experts say, though in many families those who have more financial flexibility contribute more generously. But there's no way to compel that kind of responsibility; it has to be voluntary. Start by making everyone feel as comfortable as possible -- no one wants to feel bullied, shamed, or called on the carpet. Then talk through what everyone feels they can afford to contribute. If it's still not enough, look for sacrifices that can be made, either collectively or individually. Note: If you've previously had conflicts over caregiving or money, those issues can color today's discussion, so you may need to resolve them. (See these tips on resolving sibling caregiving conflicts.)

3. Consider Contributions Other Than Cash

One strategy many families use is to balance out the cash cost of caregiving with the value of manpower hours. For example, a family member who has been providing long hours of parental caregiving might be exempt from contributing, while a sibling who lives far away might contribute more. Hours spent doing things besides caregiving count, too; a sibling with handyman or gardening skills might do maintenance work on a parent's or another sibling's home, for example, while a sibling with financial skills might take on the banking and budget management. This divide-and-conquer approach can go a long way toward easing sibling strains and preventing resentments. (If you're the one doing the hands-on caregiving, you should feel free to suggest such trades to less-involved siblings.)

4. Separate Present Needs From Future Expectations

Sometimes a factor underlying sibling disputes over finances is one or more sibling's concern that the cost of senior care may impact any potential inheritance from your parents. If this is the case, there's no recourse but to bring this issue out into the open and deal with it directly. The truth is, your parent's money is their money, and when it comes to deciding how to spend it, their needs come first. While your parents may hope to leave a legacy, and while you or your siblings may have hopes of inheriting, this isn't something that adult children can count on. (After all, your parents could also deed all their money to an animal shelter! It's theirs to spend as they see fit.)

5. Enlist a Professional

If you are looking into senior living communities such as independent or assisted living, those communities usually have advisors on staff who can help you budget the cost of care needed. They can also help you determine whether outside resources, such as veteran's assistance, are available and help you apply for and receive those funds. Staff may be able to work with family members so that everyone understands what's going on and what's needed; that way everyone feels part of the solution. Senior care professionals such as geriatric care managers, social workers, and eldercare and family mediators are also experienced in dealing with family dynamics, ironing out differences, and crafting solutions that take everyone's needs into account.

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