Who Will Care for the Caregiver Without Children?
Strategies exist for childless boomers who wish to navigate old age comfortably, but planning ahead is key, experts say.
When my 87-year-old mother was no longer able to drive and perform other daily activities, there was never any doubt I would become her caregiver. Family members — especially adult daughters — have traditionally been caregivers for their aging parents. But this reliance on family is becoming increasingly precarious for people like me, who have no children.
The U.S. Department of Health and Human Services estimates that at least 70 percent of people over age 65 will require long-term care at some point in their lives. But as more boomers enter old age — including a growing number of childless people — the number of available family caregivers won’t keep pace with demand. According to the AARP, in 2010 there were about seven family caregivers for each person 80 or older; that number is expected to drop to four caregivers in 2030 and three in 2050. The AARP also estimates that 16 percent of frailadults who are now 85 or older have no children to assist them, and by 2040 that number will increase to 21 percent.
And while people in my situation frequently talk about what they’ll do when they need caregiving, they often fail to adequately plan for old age. A study by the Centers for Disease Control and Prevention concluded that only 37 percent of older adults who are not in nursing homes or hospices — and only about 15 percent of all adults — have appointed a legal proxy designating someone to make health care decisions on their behalf.
So what should people without children do to ensure they’ll have adequate care? Lawyers and others who work with the elderly maintain the first, and most important, step in the planning process is to find someone who can serve as your health care advocate, financial manager and surrogate child. This is the person you’ll list on your advanced directive for health care, power of attorney and other legal documents. It is also advisable to designate an alternate who can take over if the principal agent is unavailable.
“You have to think long and hard about whom you can trust explicitly with your care, such as medical decisions and possibly end-of-life issues, and your money: for example, paying your mortgage and filing your taxes,” says John Lansing, a Pasadena-based elder law attorney. “This is a terribly important decision. You are quite literally putting your life and well-being in someone else’s hands.” The person you select, he adds, should be “someone you can trust, who is compassionate, devoted to your well-being, level-headed and not a pushover.”
Ruth A. Phelps, a Pasadena-based lawyer specializing in estate planning and elder care, echoes that strategy. “You should look around for people you think will be supportive and helpful,” she says. “What is your pool of available people? And that pool, when you think about it . . . sometimes is quite extensive.” Possible caregivers can be brothers, sisters, nieces, nephews and other family members. They can be friends, but it is preferable to select younger people who are more likely to be alive when you need their help. Members of your church or temple, or the social groups in which you’ve been active, are other options.
But if no one you know personally is right for the job, you can hire a professional fiduciary, who charges an hourly rate, depending upon the task performed. Lansing, who has worked with many, estimates that Pasadena-area fiduciaries charge an average of $85 to $150 per hour for professional work (such as meeting with an investment advisor or certified public account on behalf of the client) and an average of $55 to $75 for clerical work.
A professional fiduciary can also be listed as an alternate agent in case your principal agent has died or is unable to carry out your wishes. He or she can be someone who works at a bank, trust company or other financial institution with a trust department, or a member of the Professional Fiduciary Association of California. Association members are certified licensed professional fiduciaries (CLPF), which means they’ve been licensed by the state’s Professional Fiduciary Bureau of the Department of Consumer Affairs. The association’s website (pfac.pro.org) provides a list of these people and other helpful information.
After you’ve selected your agent (or agents), lawyers advise you to obtain two documents: an advanced directive for health care and a durable power of attorney. “The advanced health-care directive specifies who’s going to talk to your doctors, who is going to look at your medical records, who is going to be there in the hospital [advocating] for you if you need them,” says Phelps. The durable power of attorney is “your feet on the ground, [someone] who can sign your income tax returns, who can get money from your IRA.”
The California advanced health care directive contains the name of your designated health-care agent; the name of your primary physician; your decision to donate or not donate your organs; whether or not you agree to diagnostic tests, surgical procedures and medication plans; and whether you agree to providers supplying, withholding or withdrawing artificial feeding and fluids and other forms of critical intervention, including cardiopulmonary resuscitation (CPR). A copy of this form and instructions for completing it are on the California attorney general’s website: ag.ca.gov/consumers/general/adv_hc_dir.
The California durable power of attorney form enables a designated agent to make financial decisions, including transactions involving real estate, other property, banking, business, insurance and annuities, retirement planning and taxes.
Lawyers also advise people to set up a will or a trust to specify who will receive your assets so as to avoid probate, a court-supervised process for asset distribution after death. “People are concerned about probate because it requires a lengthy court involvement — at least a year, often more — and because probate is very expensive,” says Lansing. “The benefit of the trust is to control how your assets are distributed and to make sure your family doesn’t have to deal with probate.”
But it’s not enough to just designate your agents and obtain the necessary documentation. You must also have a conversation with the agents, informing them of your wishes — and be sure to send them copies of these documents. That way, your agents will be able to carry out your instructions. “Many of these decision makers don’t know a thing about the plans or don’t know how to get their hands on them,” says Mary Winners, a gerontologist and principal of About Senior Solutions, a Monrovia-based private-care–management business, who has seen the problems created when designated agents haven’t been told their responsibilities or seen relevant documents.
Old-age planning might also include the decision to purchase long-term care insurance, which covers the cost of help with basic tasks of everyday life (sometimes called “activities of daily life” [ADL]). These policies can offset expenses associated with nursing homes or in-home care. AARP estimates that it costs about $54,000 annually for a senior to reside in a nursing home, and about $30,000 a year for home care.
As people live longer, there’s a greater probability that they will eventually need some form of caregiving. However, according to the Congressional Research Service, only about 11 percent of people 55 or older have purchased private long-term-care insurance.
But purchasing this insurance can prove difficult. “If you’re ill, you can’t get it at all,” says Jess Slome, executive director of the American Association for Long-Term Care Insurance. “And only a few companies will provide it for people [close] to the age of 80.”
The association estimates that in 2014 a 55-year-old single male will pay $925 a year for $164,000 worth of benefits, while a 55-year-old female will pay $1,225 for the same coverage. “Last year, leading insurers began charging women higher premiums,” says Slome. “Women accounted for two-thirds of the $6.6 billion in long-term care insurance benefits paid out.” He also estimates that a 55-year-old couple would pay a combined average rate of $1,795 to $3,275 a year, depending on the amount of benefits available; combined average costs for a 60-year-old couple range from $1,980 to $3,840 a year and for a 65-year-old couple from $3,620 to $5,940 annually.
“At a certain point, it’s cost-prohibitive,” says Lansing. If you take out a policy when you’re in your 40s, and maybe your 50s, and you don’t have any serious health conditions, then it might be worth it. You’re using your money to invest in a big pool of money in the event you need it.” While long-term care policies can be a godsend for people who can afford them, Lansing adds that if you’re in your 60s or older, “it may be not worth it.”
Many elderly persons who live alone consider moving in with others who can assist them if they need emergency health care, or who can share the responsibilities of grocery shopping, laundry, cleaning and maintaining a home. My childless friends and I sometimes joke that we will live together like the four women in The Golden Girls, and some elderly people are already creating these informal types of housing arrangements.
Others are choosing to live in more formal co-housing communities — typically a block of single-family attached homes, whose residents share a common area for cooking, dining and participating in group activities. Some of these communities specifically cater to the elderly.
Joani Brank of the Cohousing Association of the United States said about 120 co-housing communities are affiliated with her organization. Although only eight of those facilities are for seniors only, seniors live in many of the other communities. “All of the communities are multi-generational,” she says. “They all have accessible units for seniors.”
Brank, who is 76, cites the benefits she’s received by living in co-housing. After she broke her arm about three years ago, she recalls, she had trouble dressing herself. But help was right outside her front door. Says Brank: “I had at least five neighbors less than 50 yards from my front door who I could ask to help me get dressed.”