Financial Caregiving

Should I Plan for Financial Caregiving?

Age, illness, or injury can affect our ability to handle our finances. It’s a difficult subject to think about, and it can be even harder to discuss with loved ones. But having a plan in place is essential to protect your financial wellbeing and future.

Who Should Think About Planning?

Preparation is for everyone. A sudden illness or injury at any age can disrupt our ability to handle our own finances. The need for assistance can be long-term and permanent, or short-term — such as if you’re temporarily incapacitated while recovering from a surgery. It’s an important part of long-term planning and managing your assets with an estate plan. Financial caregiving is also an essential part of providing care for aging and special needs family members.

What is Financial Caregiving?

A financial caregiver provides support for someone who is unable to manage their finances. A financial caregiver can be an individual or a team, and can be a family member, caregiving specialist, or other professional.

The amount and frequency of support varies depending on the needs of the person being cared for. Some may need help with daily tasks, like depositing or withdrawing money, and others might just need help with their annual tax return. Over time, financial caregivers typically provide more extensive support.

Common tasks that financial caregivers assist with include:

  • Paying bills
  • Depositing/Withdrawing money
  • Balancing income & expenses
  • Reviewing statements
  • Monitoring accounts for fraud
  • Monitoring for elder abuse
  • Filing insurance benefits & claims
  • Filing tax returns
  • Applying for benefits
  • Investment decisions
  • Managing documents
  • Short-term budgeting
  • Assisting with major transactions
  • Budgeting for long-term care
  • Managing trusts & estate

How Can I Start Preparing?

1. Organize Your Financial & Legal Documents — Catalogue your important documents and contact information. This will help you get a clear idea of your situation, and will be a valuable resource when you discuss your needs and plans with professional advisors and your future financial caregiver. Use the checklist below to get started:

Financial Caregiving Checklist

2. Consult Professional Advisors — Professional advisors, such as lawyers, financial advisors, doctors, insurance representatives, and caregiving specialists can help you navigate financial caregiving and long-term planning.

3. Consider Your Fiduciary — A fiduciary is the legally appointed guardian of your assets, and there are several options you can explore. A Durable Power of Attorney is the most comprehensive, allowing the fiduciary to act on your behalf per the authorizations stipulated in the legal document. A Trust allows your fiduciary to access and control certain assets. There are also options for professional fiduciaries. Speak with your professional advisors to decide what option or combination of options work best for your situation. The person (or persons) you choose to act on your behalf as a fiduciary must be a capable, trustworthy adult with a clear understanding of their role and responsibilities. If you are incapacitated without an appointed fiduciary, the courts appoint a conservator or guardian to take care of your affairs. This process can be costly and time consuming, and the result may not be in line with your wishes.

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