How can we help the elderly or incapacitated from being completely wiped out financially?

Boy this hit a nerve. I just returned from spending a month with my dying mother. 24/7, not any help. I have been home two weeks and now my brother wants me to return. Mom has almost one million dollars and my brother hired sitters at 18.00 an hour to give mom good care while I was gone. My husband and his brother make comments to me that every thousand we spend on her sitters is out of "our" money! It is her money! And besides I can't stay at her home for months and months. She is not very nice to me. I think my husband and his brother are way out of line. They were able to stay with their mom because all siblings live in Her area and she was able to move in with her daughter who has a very large home. I live 10 hours by car from mom. I hope to stay home until the end of May. And I don't intend for my husband and his brother to make me feel bad about.

This is how I feel. But I do understand your frustration and mom is,not likely to survive another month.

Candee - the example you used about a couple deemed unable by the state, would be a "ward of the state" legal action. It usually is the nuclear approach to dealing with elderly or those incompetent who do not have family that will step up to be guardian for their family member or if there is just so much family friction that an outside guardian is named by the court. Ward of the state does happen but imho is more of a fear-factor legend than fact.

Really the issues for dealing with elderly is not a DIY project, family will need experienced legal now to not have problems later on - whether its Medicaid's look-back or settling an estate in probate. If the elder has significant assets or if they have a community spouse situation, an experienced financial planner is also valuable.

To make your visit with legal or a FA optimum, you should gather together all your elders basic information - birth & marriage details on themselves and their spouses; if there were other marriages & divorce details; all children born to them; all their current awards letters from SS and any retirements; if military then those documents as well; and their last 6 - 12 months of bank statements for checking accounts and any CD or other investments. You need to gather these and review so that you get a feel for just what realistically the situation is for your elder. Often elderly are unrealistic as to what things cost in today's $'s & family unaware of the costs of NH & AL and how the regulations on what Medicare & Medicaid will pay for are done. This site has a series of really great articles on the differences between the M's that are good. It's easy to get confused in all this.

Clarification: it's the attorneys who generally give out coupons for a free hour's worth of advice - not the agencies which sponsor the caregiving expos.

Correction (since there's no edit function here): last paragraph should have read "even if you don't feel COMFORTABLE"....

Pam makes some good points, especially on the issue of money for a couple's elder care vs. reserving it for family, charity or property. I also agree that the money should first be allocated for the couple, not for heirs or others.

I do have some different perspectives, from cases worked on at different law firms. In one situation, siblings couldn't agree on asset management, fought verbally with each other, and eventually a guardian was appointed because they just couldn't (or wouldn't) compromise or agree.

In others, attorneys appointed as guardians blew through the "protected person's" assets and in about 6 months ran up fees close to $50K. Restriction of social activity with long time neighbor friends was also instituted. I felt it was socially and financially abusive.

Admittedly, I'm somewhat prejudiced because of these cases.
Remember that attorneys' fees crawl up into the hundreds of dollars per hour, although there may now be some restriction on what a guardian can charge per hour.

What we've done is line up people who would accept the responsibilities if anything happened to me, and keep the whole issue out of the court. We try to have as many private arrangements available as possible, but it also means that people who many never expect to handle such affairs are being asked to make commitments now.

What I'd suggest to you is to get the person's legal affairs in order: DPOA, Living Will, Will, and possibly a Trust, but that depends on a lot of issues beyond the scope of this answer. If the daughter is the only child of the parents, explore the option of other relatives, friends, church friends, or even an attorney. But they need to be on board with the parents desires, and this could get tricky if the parents want to remain at home.

The goal is to identify someone who could move in to handle affairs in the event of a situation such as you pose. You could also get a team - someone who's knowledgeable in law, someone else in financial issues, etc. That's how we've worked it.

At the time I saw the financial abuse of some guardianships, it might have been that the court system didn't have the controls in place that NY did or does now.

I'd also strongly suggest that you research elder law firms in your area, arrange for fee free first meetings and request their literature on all of these issues. Educate yourself well, then consider what course you want to take. Trusts especially can be very confusing.

You can also contact your local Area Agency on Aging and ask if they hold Caregiving Expos; do the same with senior centers at local communities. Generally they give out coupons worth a free hour of their advice. Attend, speak with the elder law attorneys who typically are there to drum up business, read all the literature you can get.

In the meantime, Pam addresses medical, insurance, legal and financial data which you should be gathering and inventorying, even if you don't feel comparable handling it....the documents need to be gathered and identified. In our situation, I handled all this anyway, so I already had volumes and volumes of data. But not everyone has that information at his/her fingertips, so start now. Even if you have to hire professionals, as you will with the legal issues, gather as much data as you can about the parents in question and their assets.

My personal opinion is that they are not losing their assets, but using them for their own care. Isn't that why we save for retirement? When the assets are gone, Medicaid picks up the tab. The charities are out of luck. The grandchild is not their responsibility. As for the house purchased with a child, the gift was already given, no more is needed.
Guardians are controlled by the court. They have to account for every penny spent and submit an annual report with bank statements and copies of cancelled checks. Here in NY the annual report is 17 pages PLUS the supporting documents! Not a small task! What the Guardian gets paid to do this is an hourly rate, and the fees are set by the Judge.
Now let's say you have a Trust. You need a lawyer to set up the trust. You need Trustees who can follow the Trust rules. You need an accountant to do the financials for the Trust AND for the beneficiaries. Tax returns. Medical documents. Banking. Tracking down Deeds, Insurance, Wills.
The average adult child is not equipped to sort all that out.