<p>Dharmawheel, how much do you think your mother’s house is worth?</p>
<p>Real estate prices have unfortunately dropped quite a bit here over the past five years or so… Im guessing $275,000.</p>
<p>Actually that seems a little low. from what I observe in the NYT sunday Real Estate section, I think it would be more.</p>
<p>Surfcity, if You read back I wrote about my internet research that made it clear that the full time caregiver is an employer/employee relationship, not an independent contractor one, though it could be highly likely that those with this arrangement choose the wrong, easier, course. Just google “eldercaregiver employee or independent contractor” and a wealth of info comes up. As I wrote earlier, when I questioned him, the Polish finding agency representative with whom I am dealing, wrote back that yes indeed to correctly comply with the laws, the relationship is employer/employee…</p>
<p>Dharma, I’m sorry you’re stuck in this situation. It sounds like your mother is demanding and exigent. A lot of us have found when we hire caretakers for our elderly parents, our parents fire them. Your mother sounds like a person who is not going to be chary about firing her caretakers.</p>
<p>If she insists on having in-home caretakers (until she runs out of money) I urge you to offload the entire process to an agency: they would be responsible for hiring the caretakers, paying them, replacing them when she fired them, and keeping records. Otherwise, you are going to be scrambling to hire a new employee for her every three weeks. </p>
<p>Yes, this will cost a lot of money. But you are not your mother’s butler. You have your own life to lead. You shouldn’t have to shortchange yourself and your children to dance to your mother’s tune.</p>
<p>Yes, an agency. That’s really the only feasible way to do this. </p>
<p>Regarding the value of her home - unless she has done recent renovations (kitchen, bath, curb appeal gardening…) the odds are that her home has less value than you think. </p>
<p>If your mom insists on doing things the hard way, let her - alone. Step away and let her negotiate at least some of this. When our kids were growing up, we let the experience the consequences of their actions (obviously within reason. We’d never let them touch a hot stove, but I did let me kids touch it when it was rather warm and so they learned.). Let her discover just how time consuming her demands are. Then she can learn just how financially unfeasible they are.</p>
<p>Can you find a counselor who can help you implement boundaries with your mother? This will help you immensely in the long run. </p>
<p>Re reverse mortgages:
<a href=“http://assets.aarp.org/www.aarp.org_/articles/money/financial_pdfs/hmm_hires_nocrops.pdf”>http://assets.aarp.org/www.aarp.org_/articles/money/financial_pdfs/hmm_hires_nocrops.pdf</a>
and more recently:
<a href=“http://www.aarp.org/money/credit-loans-debt/info-04-2013/are-reverse-mortgages-helpful.3.html”>http://www.aarp.org/money/credit-loans-debt/info-04-2013/are-reverse-mortgages-helpful.3.html</a></p>
<p>Most of the caveats discussed in the articles don’t seem to apply to Dharmawheel’s mom except the fact that she’s old enough that closing costs will be relatively high for the payout of the mortgage since her life expectancy is not as long as it would be for a 65-year-old or a 75-year-old. But they do seem to be a reasonable way for her mom to stay in her house with full-time caretakers, assuming the monthly payout will cover the cost of caretakers, real estate taxes (probably pretty high there), and other living expenses. And interest rates are considerably lower right now, assuming mom has a good credit score. I know more or less where Dharmawheel lives and it’s an area where home values have started rising again, for sure, and there is an active market for houses. But she can find out pretty easily about that. On the other hand, NY is a high-cost state for real estate transactions so the closing costs may be on the high side.</p>
<p>I agree completely that whatever arrangement is made, Dharmawheel should make sure that she doesn’t have to be burdened with the time necessary to supervise and pay the aides.</p>
<p>Dharmawheel, if you have aides you really like (Polish, through the matchmaker), you can ask a full-service agency if they will take them on. This is something we considered when we had someone we really liked with an agency that we didn’t like. Agencies are happy to hire someone they know will be employed.</p>
<p>Good luck with the lawyer next week.</p>
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<p>And that’s the problem right there. Say the house is worth $275,000. She can borrow about 80% of that, but some of the loan will go to paying interest and financing the loan costs. So call it about 75%, or about $200,000. Also, we’ll assume that the Social Security will be enough to pay medical expenses, house maintenance and taxes, and living expenses, leaving the reverse mortgage to pay for the caretakers.</p>
<p>What are those caretakers going to cost? Dharmawheel says that her mother proposes to hire two fulltime caretakers at $170 per caretaker per day. Assuming fulltime here means each one is paid for a five-day week, that means that the caretakers will cost $1700 a week, or $88,400 a year. So in about two and a half years, all the money will be used up. It’s expensive to run an assisted care facility for one person! And notice I’ve been generous here about the cost of the caretakers. Actually, if Dharmawheel offloads the employment responsibilities to an agency, as we all have been urging, the caretakers will cost even more, and the money will be used up even more quickly.</p>
<p>To me, burning up a quarter of a million bucks in something between two and three years, leaving DharmaMom destitute, is a short term solution to what we are to assume is a longer term problem. </p>
<p>It costs a lot to go to assisted living. It costs a lot more to try to run an assisted living facility for yourself. </p>
<p>Yes, the cheapest HR companies I’ve worked with want at least a 10% overhead fee (above wages) for handling the paperwork, paying worker’s comp and doing proper withholding and timesheets as well as HR manual and training. </p>
<p>I’m sure your mom isn’t the first confronting these choices which the attorney has worked with. Good luck with that appointment. It’s possible that you may need to schedule a 2nd appointment with your mom present for her to hear from the attorney face to face what her options are and what will happen if she refuses to face these options realistically.</p>
<p>Two caretakers sharing the week, is what I thought- one 4 days and one 3 -?. That made me think it’s one person/day on a 24 hour shift. 7 days @ 170/day. $1200/week? Plus any/gas/mileage reimbursed. And likely some form of paid vacation and the cost of a replacement then. Maybe the ladies cook better than Mom was and food costs go up a bit. Even that takes you over 60. Plus, yes, the higher costs for going with an agency. Or payroll costs. </p>
<p>Agree with whoever said the trick with Medicaid is to get into a facility before assets are depleted. Otherwise, you can lose choice. I also agree counseling can help one understand how to set limits without guilt. </p>
<p>LF, I thought it was a matter of 24/7 care. So two fulltime caretakers, to handle all the waking hours. But, whatever; even $1200/week, plus the agency costs, plus the additional living costs, doesn’t lengthen the time much. So it’s three years instead of two and a half; the problem still exists.</p>
<p>POA questions - I have DPOA forms prepared by a lawyer for both my parents. My understanding is that all financial institutions have their own forms to be filled out. I have gathered those and making this my weekend project. However, I called one investment firm, talked to my parent’s contact, and he is asking me to send him a copy of my DPOA. He is discouraging me from filling out the financial institution forms as they are more limited and will be void when my parents are no longer competent (now as far as I’m concerned). Yes, I agree my DPOA should be sufficient. Should I fill out the institution’s forms? Or just get online access which gives me control (my parents don’t do well with passwords) and depend on my DPOA for legal standing?</p>
<p>Dharmamom, I agree with bookreader. Your mom should try to make arrangements and make the finances work if she insists on a very difficult situation. If she can’t and is unable to do that, then you can act on what is in her best interest. </p>
<p>Gt, my understanding that at least one major investment firm requires you to use their form and will not accept a DPOA. Don’t know about others.</p>
<p>Feels very consoling and surrounded by friends to get these useful posts, thank you. First, to address the salary. Because I have thrown out the independent contractor idea at $170 a day (I have told the Polish agency representative that the salary is $150 a day–we, not the employee will handle taxes "paying taxes"was what the extra $20 was for) ) as an employer/employee relationship only.He said that is what his women get, no problem. So that is $1,050 a wk, certainly a small fortune. If I farm out the payroll etc details, of course that will be an added expense. Workman’s comp,someone told me, is $47 a yr (I guess I’ll need it twice…)</p>
<p>As for the services of an agency that “does everything,” I might be really wrong here, but I called 7 agencies in my wide region and all of them act as go-betweens the employer and what they call the “independent contractor” . This “independent contractor” model seems to be the norm (over the phone a few days ago a quite nice generous Director spent a long time justifying it to me, and he represents a branch of an agency that operates in 50 states). After the arrangement is made between the caregiver and the employer, the agency takes its fee and steps out of the picture.This seems to be the standard and wrong “independent contractor” model practiced by many, many agencies/clients. Certainly there are agencies that I could find if I delve in again that “do everything.” But,oddly, early on in this process, a Director of my County’s Office of the Aging, told me (I don’t know why and should have asked) that these women are “less good.” I could satisfy myself much further on this “full service agency” (which will undoubtedly cost more) vs a "go-between"representative, but to follow my instincts,I have formed a very good relationship with this Polish professional who emails and calls me back instantly and has gone to a great deal of trouble for us already. But what impresses me most,as I wrote before,was that when I questioned him somewhat sternly in an email that an employer/employee agreement is correct, not an "independent contractor"relationship,
unlike the Director of the big so-called agency, he told me I was quite correct and that was the correct way to work within the law. So If I hire the women as employees and hire a payroll service to process taxes,ss, and do workman’s comp, I think I should be okay without a “full service” agency. As for my mother firing the women, the answer would be a BIG NO. If she insisted, we would have to go back to Jakub again, pay him another $2K to find another woman/women,but if that’s what she wants, fine. But we interviewed the women at some length in the nursing home, and their loving attentiveness, eagerness to assist and cook,and much more, pleased me, and my mother especially, very much. So NO FIRING.</p>
<p>Last night I filled out an online form for Vanguard Refinancing Bank and was called this afternoon by a professional to whom I posed many hard questions, and I feel well informed about the pros, cons, and considerable costs of a RM. Just as Cardinal Fang predicted,if the house if assessed at $275,000,she will get about $200,000. (The house, by the way, is immaculate.) He was very happy that I am seeing an eldercare lawyer on Monday and was eager to talk with her, if she wished. The RM man and I will speak again on Tues. If we go with them,they will travel to my mother’s home to make all arrangements, which take about a month. </p>
<p>As I wrote privately to a friend, the big question in my mind at the moment is whether, at age 87 and in failing health, I should see it as necessary and responsible to say to my mother, Mom, do you realize these arrangements will last, at most, about 3 years? And then spell out to her the unfortunate future that would follow? I don’t want to lead her into a fantasy. But if my judgment is correct, I should leave that conversation alone for a year, by which time she may die, or need to be in a full-time nursing facility? I will pose this question to my sister who lives in Reno, has a chronic illness that is somewhat disabling, but she works as a nurse. Sadly, the last contact she had with my mother was a Mother’s Day card; she does not return my mother’s phone calls. </p>
<p>If you are reading along, thanks a lot. It means a lot to me!</p>
<p>Okay, like a terrier I can’t let go of some things and I googled “Full service caregiver agencies”-- called THREE who called themselves “full service” and ALL THREE were NOT full service but operated on the “independent contractor” model. Enough. I will curl up with my book and my Standard Poodle and wait till Monday and see the lawyer.</p>
<p>GT, just read your post. Completely over my head. Is DPOA Power of Attorney? Good luck with whatever you’re trying to get accomplished!</p>
<p>Yes, DPOA is the durable power of attorney that should give me the unlimited ability to act as an agent for my parent’s interests. </p>
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</p>
<p>Yes. </p>
<p>Now I’m reading more about POA’s, I see what the investment guy is telling me. I have a durable power of attorney that takes place immediately and continues through incapacity. The banks are asking me to sign a standard POA which ends with incapacity. This makes little sense to me as I would not act for them unless they are incapacitated. If you google this issue, it is illegal for the banks (investment firms as well?) not to recognize my durable power of attorney and courts are starting to hold them responsible for court and legal fees involved. </p>