Noel Whittaker writes exclusive weekly blog updates for the Ban Tacs Group, with IN8 Business Advisory, a member of that group. Here, he talks about the realities when our parents get old or outlive the other.
How to take care of ageing parents is becoming a huge issue for many baby boomers. The parents generally cope quite well until one of them dies leaving the surviving partner, usually mum, alone in a home, which may well be unsuitable for her. At first, she may be reluctant to move, and, even when a decision to move is made, the family is often overwhelmed by the range of options available and the advantages and disadvantages of each one. These may well include retirement villages and land lease communities.
When it all becomes too difficult, they will probably throw their hands in the air, and say something like “let’s keep it simple, mum can come and live with us.”
Unfortunately, it usually is anything but simple. A major issue is normally what will happen with the proceeds of the parents’ home when they move out. Sometimes, part of it goes to the child they are moving in with in exchange for a granny flat right. This may not sit at all well with other siblings who see it as the diminution of their own share of the estate.
But that’s just the start of it. Let’s face it, the parent may be very healthy now, but they will age and at some stage may need care. Who will be responsible for taking care of the parent as the years pass and what will happen to mum if the family want to go on the world trip, and she is unable to go with them? What will happen if the parent’s care needs change, and they cannot be safely looked after?
Furthermore, if the living arrangement continues for many years, it may be necessary to consider what the consequences would be if the adult children divorce, or if one of those caring for the parent became ill or passed away.
But a major issue here is the well-being of the parent. There may be reluctance at the time of the initial move, and the family dynamics in the home they move could be totally changed. Part of this is due to the lack of privacy, but also the extra conversations that need to be had to keep the house running. If family tensions arise this could become a nightmare.
In my view, a much better option is to move to a community of connected like-minded people in the form of a traditional retirement village or the fast-growing lifestyle communities. A major part of well-being for retirees is their social network. By moving to a community they have a ready-made social network, regular outings, and possibly facilities such as a heated pool and visiting hairdresser and increasingly health, wellbeing, and preventative health programs. Furthermore, it obviates the situation where part of the proceeds of the parent’s home is tied up in a granny flat situation with one child. When the parent eventually moved to aged care if that becomes necessary, all or part of the price they paid to enter the community will be refunded to them. it is important to check if the community has exit fees (usually lifestyle communities do not have exit fees but some do).
Above all, it needs to be clearly accepted by all family members that a move by the parent to a new residence is a major event and everybody should get together and become aware of all the implications involved. Of course, expert advice is absolutely essential.
Noel Whittaker is the author of Retirement Made Simple and numerous other books on personal finance. Email: noel@noelwhittaker.com.au
20 October 2021