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Taking Care Of A Elderly Family Member’s Health And Finances

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The following is a guest post by reader Dave Scott who shares his experience of taking care of his 97 year old grandmother. I’m thoroughly impressed with Dave’s sense of duty and attitude throughout this entire article. You can tell he feels it’s an honor to take care of his grandmother and he’s looking for more insights on how to be a better caregiver. I’d like to have an open discussion during the holidays addressing the issues of cost, environment, emotions, responsibility and estate planning. 

It can be a great honor and a huge sense of responsibility to manage all the aspects of a aging family member’s affairs when they are in need of your help. For approximately 20 years, I have been managing my grandmother’s investment portfolio. All other aspects of her life were managed by her with a little bit of help from my father.



In late 2010, all that changed. At the age of 97, my grandmother needed to move into assisted living and was no longer capable of fully taking care of herself. During the same time period, her relationship with my father, her only living child, began to become strained and my father was battling his own health issues. As a result, I made the decision to move my grandmother from her current independent living home in Arizona to reside near me in Texas.

The responsibility dynamic changed, almost overnight, whereby I had just agreed to manage 98% of all of my grandmother’s affairs. I was definitely up for the challenge and thought I was the best suited to take it on. However, it doesn’t diminish the fact that this is not a trivial  undertaking.

Managing all aspects of a family members’ life

This is not about a ‘power grab’ to control all aspects of a family member’s life. For me, it is only about effective management. I approached this as just another offshoot of managing my own affairs. If you are going to effectively take on such a role, it is prudent that you do it in an all  inclusive, non piece meal, way. You are the quarterback for their team and, as such, you need  to ensure that their life is being managed to maximize their well being and quality of life.

When I  am referring to managing all aspects of their affairs, I mean everything from ensuring they have an ample amount of household supplies, to insurance, to utilities, to doctors, to dealing with management at their assisted living facility, to managing their investment portfolio. While it may be obvious, the most important thing is having someone that is willing and able to take on this role. Some family members may be willing but are clearly not capable. It takes a large amount of organization to ‘operationalize’ all the aspects of another person’s life. However, I have found  that once a good set of processes are established, everything generally runs on autopilot.

Managing the cash flow 



My main goal is to ensure that my grandmother will not outlive her assets and that she will maintain a healthy, active lifestyle. She is thriving in assisted living and I want to ensure that his remains for as long as possible. As such, I have paid careful attention to the balance between maximizing income and reducing expenses where feasible.

Lets start with income. As many of you know, assisted living can cost ~$5K/month or more (depending on the level of care needed and the location in the country). While my grandmother has a reasonably sized portfolio for her age, it doesn’t generate enough cash flow to only enable her to live off the dividends / interest without touching the principal.

I have structured her portfolio in a conservative manner so as to generate reasonable cash flow while ensuring it isn’t too negatively impacted by a market downturn. I try to keep her portfolio as simple and consolidated as possible through the use of only a few funds and ETFs. For example, Vanguard Wellesley Income Fund has worked well for her for many years. It provides a conservative balance of equities and bonds with a low expense ratio.

I was a bit concerned about her bond exposure earlier this year so I lightened up on any bonds that were too far out on the yield curve in favor of shorter term ETFs. While her portfolio was negatively impacted during this year’s downturn in bonds, it wasn’t enough to cause significant concerns. As you would expect, if you estimate an approximate 4% return on  a conservative portfolio and account for an average 7% increase in the annual cost of assisted living (and associated expenses), it doesn’t take too long to identify when the portfolio will be exhausted.



It is a bit scary to think that the seniors in our society who are fortunate enough to live to be 80+ and live in assisted living are still confronted with the possibility of outliving their nest egg in their final years. One aspect of maximizing her income that I gathered information, but didn’t pursue, was the option of having my grandmother take advantage of spousal veterans benefits.

The government currently doesn’t have a look back period on veterans benefits unlike Medicaid which does have a 5 year look back period. Your loved one could theoretically gift away all of their assets today and apply for veterans benefits tomorrow with no impact on the amount they would receive as a result of their recent gifting.

While there are a lot of people that have taken this route to curb the costs of assisted living, and there is pending legislation in congress to close this loophole and implement a look back period on VA benefits, it just wasn’t the right course of action for my grandmother at this time.

From the expense side, there are several things that can be done to minimize unnecessary expenses. This is an iterative process as your loved ones needs change or circumstances change.



Note: In order to be eligible to receive Medicaid coverage while in a nursing home, an individual can have no more than $14,400 in countable resources. Certain assets, such as the home and retirement accounts, may be exempt in some circumstances. The idea is to give away your assets to loved ones to qualify for government assistance before the five-year look back period begins, or else you will be disqualified. 

A few expense reductions  I implemented are:

1. Evaluate Medicare Prescription Drug Plan (PDP) options on an annual basis – identify if there is a more cost effective plan in my area based on the latest medications that my grandmother is taking.

2. Purchase grandma a big button cell phone with a basic $10/month plan – tether it toher wheelchair so that she is always available for a call. Cancelled her land line thus saving her $20-$40/month in unnecessary phone costs.

3. Eliminate all monetary gifting to family members – this one could be a bit more controversial. My grandmother has always been very generous to her family during birthdays & holidays. However, this was adding up to be several thousand dollars per year that could be used for her care. Therefore, I set the expectation with the family through a message that started something like this: “I think we would all agree that grandma’s assets should be, first and foremost, used to benefit grandma….”. Everyone agreed and there has been no discussion since.

4. Negotiate with Assisted Living – this is not always effective but I try to have the assisted living facility reduce the annual increase as much as possible. If I can get them to reduce the increase from 7% to 5%, that can make a marked impact.

Maintaining Your Loved Ones Quality of Life for as Long as Possible 



When deciding on a location of an assisted living home, there are the expected tradeoffs of  location, quality and cost. For my grandmother’s situation, I wanted her to be close to me  such that I could be seen a lot. I wanted to get to know the staff and the daily workings of my  grandmother’s assisted living facility. I have found that this is invaluable when first taking on such an endeavor.

Just as no one cares about your money more than you, no one cares about your loved one more than you. Therefore, if you are visible and the staff knows you, you can get a lot done, immediately course correct if something is not to your liking, and ensure that your family member’s quality of care is maximized. I was fortunate as the assisted living facility close to my home has a great reputation for quality.

One key aspect of quality that you can look for is how long has the staff worked there. In the case of my grandmother’s place, the same  management team has been together for 15+ years. This demonstrates a continuity of care and  dedication that I think is critical. In the short term, I was willing to tradeoff the slightly higher cost of this facility in favor of its great reputation and location.

A practice run for retirement

If you are fortunate enough to have the experience of caring for all the aspects of a loved one’s affairs, it will give you a new appreciation for what we all will face when we hopefully are there as well. For me, I feel like this is a practice run for when I retire and certainly a reality check on the costs associated with maintaining a balanced, high quality of life. In hindsight, we probably should have established some type of long term care insurance for my grandmother years ago. While it wouldn’t have addressed all the cost concerns, it would probably have helped to alleviate some of them.

There are other financial options that I continue to explore in the event that her health deteriorates and she needs skilled nursing care.

The changing role of grandchildren in caring for aging grandparents

In the past few years, I have been fortunate to have the opportunity to deepen my relationship with my grandmother. If it wasn’t for a set of unique circumstances, I may never have been given this opportunity – and for that, I am grateful. My situation has enabled me to reflect on the possibility that grandchildren may play an increasing role in helping to manage their grandparents affairs in the future.



Besides the opportunity to deepen your relationship with your grandparent, the relationship is different than a parent/child relationship, and thus may be better suited, for these types of situations. Grandchildren don’t carry the same ‘baggage’ that children do when dealing with an aging parent. In my experience, where my grandmother may have given more pushback to my father in a decision he may have made on her behalf, she doesn’t question me, her grandson, in the decisions that I make on her behalf (well, maybe she  questions me sometimes).

Once my grandmother realized that I had everything under control, she was willing to let go and enjoy her days without worrying about the details.

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