By Katie Braun, Financial Advisor, Ameriprise Financial
Caring for a family member is complex. While deeply meaningful, it can be emotionally taxing and presents unexpected challenges, often financial ones.
If you foresee stepping into a caregiving role, itís a good idea to plan a financial strategy today, before it becomes an added stressor. Here are some questions to help you get started:
What do you know about your loved oneís financial situation?
Knowing the particulars of your loved oneís disability, life and health insurance policies, savings and financial obligations can make it easier to step in on a momentís notice. Obtain contact information for the financial professionals your loved one works with so you know where to go if you have questions.
What is your strategy to pay caregiving expenses?
First, think about the bills and expenses your loved one is currently paying that you may need to make on his or her behalf. Encourage your loved one to set up automatic bill pay, or to add you as a second signer on a bank account to make handling expenses easier. Next, consider potential expenses you might incur in your caregiving role, such as out-of-pocket medical care or home improvements needed to accommodate your loved one.
What is the financial impact if you need to take time off from work?
If you are employed, you may be covered by the Family Medical Leave Act (FMLA). Under this federally-mandated program, eligible employees can take up to 12 weeks of unpaid leave to care for an immediate family member while health benefits continue. Some companies allow employees to stockpile sick days and vacation days; if you can use this kind of accrued time off, youíll still get paid. Liquid savings of your own can help cover expenses if you need to take unpaid leave from work.
Are your loved oneís assets legally protected?
Being proactive from a legal standpoint can help ensure your loved oneís wishes are known, and assets are protected during a prolonged illness. Power of attorney, or a durable power of attorney, gives a trusted party the ability to make important decisions about finances and health care. Another helpful legal document is an advanced directive, which outlines specifics for medical and end-of-life care. When these documents are in place, you have clear guidance on how to manage your family memberís affairs.
Whom would you turn to for support?
Talk with other family members about their willingness to help, and how responsibilities might be divided. Research social service and community organizations in your area to see what support is available for caregivers.
How will you balance your financial goals with caregiving expenses?
Caregiving often entails more immediate expenses that can make it challenging to focus on saving for your childís college education or your own retirement. Developing a plan to continue saving toward long-term goals can help reduce your financial stress down the road. Financial planning, under the guidance of a financial advisor, can help you anticipate and prepare for caregiving and other future events that may impact your finances.
Ameriprise Financial and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation.
Investment advisory products and services are made available through Ameriprise Financial Services, Inc., a registered investment adviser. Ameriprise Financial Services, Inc. Member FINRA and SIPC
© 2016 Ameriprise Financial, Inc. All rights reserved.