By MICHAEL EDLEN | Special to the Palisadian-Post
The vast majority of seniors that I have consulted with over the last 30 years have strongly desired to continue living in their current homes, rather than move in with family or into retirement communities or places that were easier to maintain.
We have written many articles about how to make one’s home a safer place, ways to downsize if necessary, and guidelines to help make moving more feasible and comfortable if that becomes the next course of action.
The focus in this article is on money or financial issues, insofar as they pertain to the ability to remain in one’s home for as long as possible. The assumption is made that the owners have already considered and tended to basic legal actions, such as placing the ownership of property into a family trust, and consulted with financial advisors regarding overall long-term tax planning.
To remain in place for many more years requires that immediate attention be given to safety. It can be useful to have an audit done in and around the home to identify any current or potential future hazards or conditions that might result in accidents or other risks to health.
Although there would be little sense in choosing to age in place and have the place be one that could lead to harm, I have seen many senior home environments where that is exactly the situation. For example, while it may cost a bit to replace a tub-shower with an easy-to-enter shower with seat, that is not an action to wait to have done until mobility might suddenly become an issue.
Home maintenance must also be given serious consideration in order to remain for many years. For example, people living in homes built before the 1970s quite likely may be having plumbing problems they are not even aware of yet.
A comprehensive examination of the piping and sewer lines may disclose some major issues that very soon could lead to costly repairs. Having such work done without the pressure of emergency immediacy will make the process more comfortable and allow for more thoughtful decision making.
Perhaps one of the most common challenges arises when trying to figure out who can help managing daily chores and activities when the senior either suddenly or gradually needs the assistance. Sometimes an adult child is drafted for that role, other times different family members rotate being caregivers, and often a professional caregiver is engaged either directly or through an agency.
Even when professionals are hired, someone in the family has to coordinate schedules and be sure all caregivers know the important daily routines, etc. that the seniors will expect and depend on.
The cost of non-family or friend caregivers is directly related to the number of hours per week or month that they will be on the job. Once the routine has become 24 hours a day, the family can expect that the cost would be in the range of $9,000 to 12,000 per month.
While that may be difficult for most seniors to accept, the reality may be that it is well worth investing in for everyone’s peace of mind. In fact, it may ultimately be the only way for them to continue ageing in place.
One creative solution to providing the cash to pay for such monthly costs is for the family as a whole to consider the big picture. One aspect is that a large proportion of seniors who don’t want to sell their homes have made that choice influenced at least in part by the capital gains taxes that it will save their heirs.
It could well be that this anticipated tax savings might be greater than the costs of full-time caregivers even over several years. For example, the average senior in Pacific Palisades who has owned an average home for 35-plus years might have $300-500,000 taxes due even after deducting the still-available exemptions.
Most seniors have a large equity in their homes, and many do not have a great deal of liquidity or cash flow to cover full-time caregivers. A solution in that situation might include if one or more of their children who have high incomes could advance the money on a monthly basis.
They could keep record of all such costs and be reimbursed later from the eventual sale of the property after the senior has passed. This way all of the heirs would participate equally, as the money would essentially be coming out of their future inheritance.
Michael Edlen has counseled nearly 2,000 seniors over the last 30 years and his website, edlenteam.com, includes dozens of articles covering many useful topics. He can be contacted to arrange for a complimentary session at 310-600-7422 or firstname.lastname@example.org.
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