Iowa advisor Jean Mote is thrilled that her parents, now in their nineties, live in the same building as four of their six adult children. The Cedar Rapids siblings have divvied up day-to-day chores to help their parents. After her mother was diagnosed with cervical cancer at age 87, she was accompanied to every medical appointment, while other members of the family kept Mote's father company. "The peace of mind of having the whole team in place and always there is indescribable," Mote says.

But planners see few clients with such peace of mind. Instead, families often cobble together plans after a parent is already in crisis.

When siblings are unprepared, bickering about responsibility and unsure of one another's desires, skills, financial resources and availability, planners are stepping in to help families sort out their roles. It may also be a good idea to ask older clients what arrangements their children have made - or, when tending to their own elders, if they have discussed the division of labor with a brother, sister or grandchild.

If you are hired by one sibling, it's important to be sure other siblings have accepted your role. Dan Serra, a financial planner with Strategic Financial Planning in Plano, Texas, recalls a client with two siblings who wanted Serra to manage his parents' finances.

But all three were trustees for their parents' assets and one sibling wasn't convinced Serra was the right choice. The siblings never agreed on a planner.


THE 50-50 RULE

One way to set clients on the right path is to invite them to look at the new guide, The 50-50 Rule, from Home Instead, a firm in Omaha, Neb., that provides nonmedical caregivers to seniors. The name of the guide refers to the age at which many adult children begin caring for an aging parent. Created with the Boomer Project, a marketing and consulting firm in Richmond, Va., The 50-50 Rule is a set of free, web-based materials that can help adult children consider the many options for caring for an aging parent, as well as potential pitfalls.

The guide recommends clear communication and consideration among adult siblings and their parents as they work together. It points to online resources, suggests ways to sidestep potential problems and provides advice on hypothetical situations: a brother who won't pitch in, a sister-in-law who won't give up jewelry that mom planned to give to someone else.

"We can't always be great forecasters of what we would do in a particular situation," says Ingrid A. Connidis, a consultant on The 50-50 Rule who studies family ties and aging at the University of Western Ontario. "It's good to know something about what help siblings might volunteer, avoid surprises and know what's taken care of and what isn't."



You may not be eager to host meetings for clans with aging parents that could combust into emotional issues and family politics, but these meetings can be enormously helpful for all involved, says Terry J. Siman, managing director of United Capital Private Wealth Counseling in Philadelphia. "Most financial planners really do care about their clients, and this is a great way to show that you care," he says.

Your comfort may increase, he adds, if you focus on helping clients define caregiving roles. Families may need siblings who can manage investments, handle cash flow, provide personal care, scout assisted-living facilities or nursing homes or serve as a medical or legal proxy.

The discussion should "set the qualifications for each role," Siman says. Then, "people can objectively think about whether they're right for the job."

In one such meeting that Siman hosted recently, two siblings agreed to lend money to Siman's clients - a cardiologist and his wife - so they could buy a home with space for their elderly father. The siblings will inherit equally, and the father will live comfortably with the couple until the end of his life.

It's best for financial planners to state clearly that they are advocates for their clients, while underlining that clarity benefits the entire family, Siman says. Steer away from potentially explosive emotional issues, focusing instead on practical considerations. A geriatric social worker, counselor or psychologist can also help guide families toward workable decisions for themselves and their aging parents.



When clients are thinking of paying for a parent's care, they need to consider many issues. These include tax consequences and the best way to be reimbursed if they will need the money later.

Each month, the IRS publishes acceptable interest rates for intrafamily loans, which currently range from under 1% for short-term loans of less than three years to around 4% for loans of more than nine years. Jim Ciprich, a wealth manager at RegentAtlantic Capital in Morristown, N.J., says his clients have often made family loans that they then forgive, a bit at a time, through annual gift exclusions.

"Each adult child could give a parent $13,000 a year, the maximum amount that isn't subject to gift tax. Or one or more adult children could pay directly for a parent's medical expenses, which could potentially include skilled in-home care." Children can pay policy premiums on long-term-care insurance without owing gift tax, as long as they pay the insurance company directly.

Your client could also pay for care and be reimbursed through the death benefit on life insurance. This is easiest if a parent already has life insurance with a sufficient payout or can buy more coverage without underwriting. "The earlier you can get more life insurance coverage, the better," Ciprich says.

It helps to remind clients to consider both money and time when evaluating the contributions of siblings. Ciprich had one prosperous client who suggested to his sister that he lend his elderly mother money and be reimbursed at her death. He never thought about the fact that his sister had been helping their mother for years, making sure she had groceries, filling prescriptions and doing other chores.



A client who expects to be reimbursed in a will must understand the risk that the parent will use up the assets. Unequal inheritance is also tricky emotionally, says Richard Schroeder, a principal at Schroeder Braxton & Vogt in Amherst, N.Y.

Even when siblings have very different financial situations but agree in advance, children who know they will inherit less - or nothing - can feel left out. "It's about family and a sense of belonging," he says.

Talking honestly about emotional, logistical and financial desires, abilities and expectations can help adult children weather their parents' sunset years without damaging their relationships. "The key is transparency," Siman says.

The wealth manager adds that he's seen many clients display great generosity and willingness to sacrifice for their parents and siblings during what can be a difficult and trying time. "I try to encourage people to make decisions that they are not likely to regret, because regret is a very heavy burden."


Ingrid Case is a financial writer in Minneapolis.

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