Updated April 27, 2002 – When your parents live longer than they thought they would and end up outliving their savings – what do you do? What can they do? It’s something not many families plan for but if you having elderly parents, I urge you to take the time to talk to them about this issue.
So what can you do with aging parents who have no money? – Know what they have and what they owe. Raise funds by selling, moving and/or working. Ask your family, friends and community for help. Look into and use the many federal, state and local resources available for low income seniors.
It will take a team effort to help you and your parents get through this type of situation.
My Elderly Parents Are Broke
If you are dealing with parents who are impoverished then you are dealing with much more than just the standard issues that are related to caregiving of elderly parents. You are also being burdened with this additional financial problem as well – and I’m sorry that you are having to go through that.
Two very good and old friends of mine are in this type of mess right now with their parents and we (all their friends and family) are working together to brainstorm what can be done for them and their elderly parents.
Here are their stories:
My friends Sarah and Zachary and their parents live in Georgia. Sarah has a father who is 93 and a mother who is 89. The father has severe Parkinson’s and is living in an assisted living home. Their mother is living in a house in a 55+ community. The parents are living on social security and an annuity which ends next year.
Once the annuity ends – their father will have to leave the assisted living home because they cannot afford it any longer and he will be moved to a nursing home. Their mother will have to sell their home to pay for the nursing home and move in with her daughter who lives on Long Island. That means not only moving but leaving all her friends and family here in Georgia.
My friends Angela and Steven and their parents live in South Florida. Angela has a father who is 91 and a mother who is 88. The parents both continue to live in the same home that they have lived in for the last 35 years. Angela’s father is showing signs of dementia and her mother has severe arthritis which makes it very difficult for her to walk without assistance.
They have no savings and live strictly on their social security. Their home and cars are in constant need of repair and their children are currently all sending money to their parents monthly to help them pay for utilities and food.
In the past 2 years the children have had to pay for a new roof on the house, a new television, engine repair on both cars, various plumbing and electrical repairs in the home and smaller miscellaneous other charges.
The majority of caregivers (78%) say they incur out-of-pocket expenses as a result of caregiving and, on average, are spending one quarter of their income on caregiving activities. This kind of spending can have a significant impact on your long-term financial security.morganstanley.com
The main problem with Angela’s mother is that she has an addiction to online shopping. Her spending habits keep her and her husband in poverty and the children resent sending money they feel will be spent frivolously. It’s a difficult situation.
When your parents have no money – and the situation may be due to no fault of their own – it’s much easier to help them out.
But, when they contribute to their own financial problems due to poor judgement or an issue such as a shopping addiction – it’s easy to see how regrets and anger can become part of the daily conversation.
With our parents living longer and longer, the prospect of outliving your savings gets very real.
In 1950, 8.4% of the U.S. population was over 65, and 1.2% was aged 80 or above. In 2000, the 65+ share of the population went from 8.4% in 1950 to 12.3% in 2000.Forbes.com
So, what does a family do when their senior loved ones are either without money or their habits and lifestyle have forced them into poverty?
Well, read on.
How Do You Financially Help Aging Parents?
If the situation has gotten to the point where you will need to help your elderly parents financially, then there are going to have to be some difficult decisions and tasks ahead for you and your parents.
Here are some tips on what you can do:
- Have a serious conversation with your parent(s) about their situation. It may be beneficial to bring in a 3rd party such as a financial planner to help. Of course, discuss this with your parent(s) first. There’s a great book that I can recommend called Mom And Dad – We Need To Talk by Cameron Huddleston that can help you through this.
- Before any actions are taken – sit down with your siblings and/or family members to discuss the situation. I would recommend to include your parent(s) in this conversation but that will depend on the cognitive level and willingness of your parents to work with you.
- Make a detailed list of how much money may already be saved in savings accounts, investments such as stocks, mutual funds, etc. as well as any debts owed. You need to have an accurate account of your parents’ assets as well as debts.
- Make a detailed list of any steady income such as social security, pensions, annuity funds, etc.
- Decisions will have to be made on what assets can and should be sold to raise cash. Also, what lifestyles changes will need to be made. This could include:
- if your parents are living in a home they own, selling the home may be necessary
- downsizing to a smaller space
- moving to a rental vs. purchasing another house
- moving in with a family member, room mate, etc.
- selling unnecessary furniture, clothing and any other items to raise cash
- if your parents are capable – working part time is an option. In my community, I see quite a few retirees working at fast food restaurants, retail shops, the library and grocery stores. For some seniors this is not ideal – but it may be a necessity.
- You may also have to raise some extra cash to help your parent(s). Again, selling some of your possessions, possibly downsizing your own home, etc. So, please do not discount this as a possibility, if it’s needed.
- Create two separate budgets. One for your own family and one for your aging parents. This helps you and your family keep track and allocate the monies going in and out of their “account”.
- Consult with your accountant. Hopefully you have an accountant who may be able to help you with budgeting, possible tax breaks, etc.
- Rally the troops. All siblings and other family members (and sometimes friends) could all help to contribute either with money or a service. An example would be that cousin John could mow the lawn and care for the yard so that your parents don’t have to pay for a lawn service.
- Take advantage of the resources available for low income seniors.
- Of course Medicare is the most popular resources for seniors – if you’re not familiar with Medicare – here’s a great primer to help you out.
- Medicaid is a program run by your state and each state is different. Here is a list of contact information for the Medicaid office in each state.
- State Pharmaceutical Assistance Programs (SPAPs) assist low-income seniors with their prescription drugs. Here is a list of the states that do offer this type of help.
- There are many pharmaceutical companies that offer Patient Assistant Programs (PAPs). “Patient Assistance Programs (PAPs are programs created by pharmaceutical and medical supply manufacturers to help financially needy patients purchase necessary medications and supplies. Via these programs, prescription medications may be made available at no cost or at a minimal fee for individuals who do not have insurance or are underinsured. ” – payingforseniorcare.com
- The Supplemental Nutrition Assistance Program (SNAP) helps low income individuals buy food. Along with SNAP are multiple other programs across the USA that may be able to help. You can find what programs are in your area by visiting the BenefitsCheckUp.org website.
- Veterans Benefits should be taken advantage of if you are a veteran or a dependent or a spouse of a veteran. Check with your local VA office for information on what you may be eligible for.
- Multiple other programs available and what you are able to get depends on what you are eligible for and where you live. BenefitsCheckUp.org created a little questionnaire that you can fill out (no need to sign up) and it will give you lists of resources depending on what you are seeking help with. Check it out by clicking here.
- Grow your own food – if you have a green thumb and the space and physical capability to do so – growing your own food can certainly help to trim the grocery budget.
- Shop at the discount stores such as Aldi’s and if you shop at other stores, make sure to find out if they offer a senior discount.
- Check with your utility company to find out if and what types of discounts they can provide to your elderly parent. You may be surprised to find out that you can save some money by doing this. The same would be true for phone companies, cable companies, trash companies, etc.
- Check into the multiple services (hopefully in your area) that provide very low cost or free transportation for seniors. For all the information on this check out our article on Can Senior Citizens Get Free Rides?
- To save on caregiver costs use the resources within your own private community. That means siblings, family members, friends, your church, clubs, etc. Most people want to help but don’t know how so don’t be shy to ask. If your elderly parent requires someone to be with them 24/7, you could use someone to be with them 1 or 2 days a week – saving you the cost of the caregiver. It’s difficult to ask, I know but now is the time when YOU need the help. You can pay it forward in the future.
Are Children Financially Responsible For Their Parents?
I do want you to be aware that in some US states and some countries, there are Filial Responsibility Laws. If you live in Puerto Rico or any of the states listed below, you may be responsible for your parents’ care. Although these laws are not often enforced – they still are the law so legally – you could be made to pay.
Filial responsibility laws (filial support laws, filial piety laws) are laws in the United States that impose a duty, usually upon adult children, for the support of their impoverished parents or other relatives. In some cases the duty is extended to other relatives.Wikipedia.org
There are currently 28 states plus Puerto Rico that have filial responsibility laws.
- New Hampshire
- New Jersey
- North Carolina
- North Dakota
- Puerto Rico
- Rhode Island
- South Dakota
- West Virginia
Other countries such as Germany, France, Taiwan and Singapore have their own versions of a Filial Responsibility Law as well.
These Filial Support Laws also may “…require adult children to pay for a deceased parent’s unpaid medical debts, such as those to hospitals or nursing homes, when the estate cannot.”Money.cnn.com
Am I Responsible For My Parents Debt When They Die?
Well, there may be some unique circumstances in certain cases but generally, you would only be responsible for someone’s debt if your name is also on the account.
The way it goes is that the estate is responsible for paying off any debt after someone dies.
If there isn’t enough monies in the estate to cover debts, then other assets are tapped. This could include monies left to their heirs so if you were to inherit some money, it may be that you end up inheriting less or none at all – depending on how much debt needed to be left to pay.
Now, having said that I will tell you that when my father passed away – he had no estate and about $60,000 of debt mostly in credit card bills. Although he was the only person on those credit card accounts – bill collectors kept contacting my family for months after he passed away trying to collect those funds.
So, yes we were not legally responsible but that didn’t stop them from trying.
I do recommend that you contact an attorney about this issue and I would say to do it before your parents pass away. It will put your mind at ease and if anything needs to be prepared (for whatever reason) you and your parent can work together to make that happen.
What happens to elderly with no family or money? – If an elderly person with no family or money is of diminished capacity and unable to make decisions and/or care for themselves then they are often made a ward of the state or county they are in. All matters concerning their care will be made by the state or county. Otherwise, elder orphans who can still care for themselves may go on welfare and receive aid from their local government.
We define elder orphans as aged, community-dwelling individuals who are socially and/or physically isolated, without an available known family member or designated surrogate or caregiver.U.S. National Library of Medicine
The National Council on Aging is a resource to help low income adults.
I know it’s an extremely difficult situation to be in, to care for aging parents AND to deal with the lack of monies. But don’t despair – there is help available. You just need to be willing to ask for it.