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Caring for your elder relatives

Discussion in 'Asset Protection/Taxes/Legal' started by AroundTheWorld, Sep 18, 2007.

  1. AroundTheWorld
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    AroundTheWorld Be in the Moment Speedway Pass

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    Tax question...

    If you start to care for (they move in with you) your elder relatives - do they become a dependent? Can you deduct health care expense? (Diane ? ) :confused:
     
  2. Runum
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    Runum Platinum Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

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    I built an addition for my house several years ago and my mom has been living with us ever since. Haven't had to pay for any health care yet but I do claim her as a dependent because I pay for her housing. :cheers:

    Greg
     
  3. AroundTheWorld
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    AroundTheWorld Be in the Moment Speedway Pass

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    Thanks Greg... that makes sense.

    It is mostly the health care I am concerned about. My grandmother is 89 and living on her own at the moment - but those days are numbered. It is either with me or into a nursing home.
     
  4. Diane Kennedy
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    Diane Kennedy Bronze Contributor

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    I'm sorry to hear that your family is going through this right now. It's nice that you're able to provide a place for your grandmother.

    You can take a deduction for caring for a relative, provided you provide over half of the support. In calculating that, you can take into account the FMV of care, room and board. Typically, if you provide those things, you're providing over half the support.

    Another thing to consider if you have your own business:

    - (quickest thing to do) set up a Cafeteria Plan (aka Sec 125) that allows you to take deductions pre tax out of your pay. That money can be used for medical expenses, day care AND elder care.

    - (few more steps) set up a C Corporation. You can then do a Medical Expense Reimbursement Plan and pay for expenses as they occur, pre tax. This is a little more complicated, because you need to make sure that the C Corp strategy works with other things in your business...ie, don't just set it up for the tax break.

    Best of luck.
     
  5. TNT
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    TNT New Contributor

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    I live with my parents...they are both disabled so I help them and they help me take care of my son who I have custody of....I am happily Div. We go tomorrow to find out about my father and his demintia. He is having some real problems with his memory and other things. they said he does not have altimers yet but at 73 who the heck knows...we will see tomorrow . he is going to a nero psyc. not sure how he can help but hope he does..it is really hared on my mother and me the way he acts sometime. oh well not the form for that sorry about that. time to move into the fastlane and make things happen for my family. It is all on me now for them and for my son.

    Talmadge
     
  6. Bilgefisher
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    Bilgefisher Bronze Contributor Read Millionaire Fastlane

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    This is a very good thread and something I want to be ready for. I have had several relatives with alzheimer's disease. The costs can be enormous, especially if they become violent, which is common. A "quality" nursing home can cost 80k+ per year and live in care can easily surpass that. From family experience, if you can afford live-in care, do it!

    Sorry ATW, didn't mean to pull off topic, but I believe many folks are not ready for the financial costs of taking care of there parents.
     
  7. AroundTheWorld
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    AroundTheWorld Be in the Moment Speedway Pass

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    It is a very important topic... caring for your parents and grandparents.

    If you catch it early enough... you can really make a difference.

    About 3 years ago - I had a frank conversation with one of my parents about if they were prepared for retirement. They were not.

    We brought them in on one of our properties - and they now have enough income to be "okay" for retirement. It is a huge relief to all of us.

    Now my grandmother... I did not think ahead quite early enough on this one. She has always assumed she would go to the nursing home. It is where 8 of her 14 siblings went... but it would break my heart. I'd rather have her with me. I think we probably have --- who knows 6 monts to a year to plan for it -- but a fall could happen tomorrow. Fortunately we are in the planning stages of building a house. We are considering the need to care for her - later some of our other relatives - as we design the house. It is really the cost of care that is staggering!

    Along with this issue... how do you decide when it is time? Loss of independence is a difficult thing for one to go through.

    Anyway... anyone else that has been through this or is going through this - I would love your input or advise.
     
  8. TNT
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    TNT New Contributor

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    Aroundtheworld

    I am glad you have the means to help your family like you do. My mother had to put her mother in a home and it broke my moms heart. The thing was taking care of my grandmother was truely killing my mother she needed care far more than my mother could provide and afford so there was no choice. I know if I do not do something here soon I will be in the same place. That is One of the things that has gotten me motivated and looking at my options. If I can answer any questions about care or anything let me know. I grew up helping with my grandmother and I am now taking care of my 2 disabled parents.

    Talmadge
     
  9. Sid23
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    Sid23 Bronze Contributor

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    Do any of you care for relatives that live far away? My mom is single, 67 years old, makes $10/hr, and in slowly failing health. I'm 29 and my brother is 26 (he also lives across the country from her).

    We are beginning to talk about what to do with her. Do any of you face this same issue? How do you help someone across the country?
     
  10. nomadjanet
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    nomadjanet Contributor

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    First of all 67 is not old. But poor health can be an issue at any age. If she does not want to move across the country and you are truly concerned the best thing to do is start planning now while she is not old. One of the best things that can happen to an older family member is that they develop a network of friends to count on. My husband’s aunt moved into an assisted living facility, not a nursing home but a complex for seniors. She has her own condo with privacy. In the complex there is a cafeteria style restaurant with very reasonable meal plan similar to the cost of meal plans at a college. There are recreational & transportation opportunities for the residents yet they are independent and can come & go as they please. There is a nurse on duty 24-7 in case of emergency and each unit has a call button to the nurse’s office. It has really been wonderful for her; the cost with her meal plan is about twice what a similar condo on the open market. But for the extra money you get a really good value. Don't know what one bedroom condo's go for other places but you can get a pretty decent one here for about 900.00 a month, so her unit costs us about 1900.00 including her food plan, transportation & 24-7 medical backup. She has formed friendships with other residents and no longer depends on us for everything. It has helped her keep her mind active and she is physically stronger since participating in the activities there. All in all it’s a good fit for many seniors that are not ready for a nursing home but still need a back up plan.
     

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