Elder mediation can help families navigate thorny caregiving issues

Dear Savvy Senior, Are there any services that you recommend that can help families resolve elder parent caregiving conflicts?

My 86-year-old father was recently diagnosed with earlystage Alzheimer’s disease, and to make matters worse, my sister and brother and I have been perpetually arguing about how to handle his future caregiving and financial needs.

Conflicted Siblings

Dear Conflicted,

It’s not unusual when adult children disagree with each other regarding the care of an elder parent. If you and your siblings are willing, a good possible solution is to hire an “eldercare mediator” who can help you work through your disagreements peacefully. Here’s how it works.

BY DONALD PETERSON

Dear Readers,

What are variable annuity charges?

You will pay several charges when you invest in a variable annuity. Be sure you understand all the charges before you invest. These charges will reduce the value of your account and the return on your investment. Often, they will include the following:

- Surrender charges. A surrender charge is a type of sales charge you must pay if you sell or withdraw money from a variable annuity during the “surrender period,” which is a set period of time that typically lasts six to eight years, but sometimes 10 years or longer, after you purchase the annuity. Surrender charges will reduce the value of, and the return on, your investment. Generally, the surrender charge is a percentage of the amount withdrawn, and declines gradually over a period of several years, known as the “surrender period.” For example, a 7 percent charge might apply in the first year after a purchase payment,

Elder Mediation

While mediators have been used for years to help divorcing couples sort out legal and financial disagreements and avoid court battles, eldercare mediation is a relatively new and specialized service designed to help families resolve disputes that are related to aging parents or other elderly relatives.

Family disagreements over an ill or elderly parent’s caregiving needs, medical care, living arrangements, driving issues, legal and financial decisions are just some of the many issues that an elder care mediator can help with. But don’t

6 percent in the second year, 5 percent in the third year, and so on until the eighth year, when the surrender charge no longer applies. Often, contracts will allow you to withdraw part of your account value each year - 10 or 15 percent of your account value, for example - without paying a surrender charge.

- Mortality and expense risk charge. This charge is equal to a certain percentage of your account value, typically around 1.25 percent per year. This charge compensates the insurance company for insurance risks it assumes under the annuity contract. Profit from the mortality and expense risk charge is sometimes used to pay the insurer’s costs of selling the variable annuity, such as a commission paid to your financial professional for selling the variable annuity to you.

- Share classes. A variable annuity may offer different share “classes” with different charges (including mortality and expense fees) and different surrender charge periods. For example, “L class” shares may have a shorter surrender charge period, but may have higher ongoing fees, while “B class” shares may have a longer surrender charge period and lower ongoing fees. Consider how long you expect to own the variable annuity and your need to access funds when you think of any confuse this with family or group therapy. Mediation is only about decision-making, not feelings and emotions.

The job of an elder mediator is to step in as a neutral third party to help ease family tensions, listen to everyone’s concerns, hash out disagreements and misunderstandings, and help your family make decisions that are acceptable to everyone.

Good mediators can also assist your family in identifying experts such as estate-planners, geriatric care managers, or health care or financial professionals who can supply important information for family decision making.

Your family also needs tradeoff between the length of the surrender charge period and the level of ongoing fees. Also, because fees are paid from the amount you invest, they can reduce your potential investment return.

- Administrative fees to know that the mediation process is completely confidential and can take anywhere from a few hours to several meetings depending on the complexity of your issues. And if some family members live far away, a conference or video call can be used to bring everyone together.

The insurer may deduct charges to cover record-keeping and other administrative expenses. This may be charged as a flat account maintenance fee (perhaps $25 or $30 per year) or as a percentage of your account value (typically around 0.15 percent per year).

- Underlying fund expenses. You will also indirectly pay the fees and expenses imposed by the mutual funds that are the underlying investment options for your variable annuity.

- Fees and charges for other features. Special features offered by some variable annuities, such as a stepped-up death benefit, a guaranteed minimum income benefit, or long-term care insurance, often carry additional fees and charges.

- Initial sales loads, or fees for transferring part of your account from one investment option to another, may also apply.

Tip: You should ask your financial professional to explain to you all charges that may apply.

If you’re interested in hiring a private eldercare mediator, you can expect to pay anywhere from $100 to more than $500 per hour depending on where you live and who you choose. Or, if available in your area, you may be able to get help through a community-based nonprofit program that offers free or low-cost services by volunteer mediators.

Finding a Mediator

To locate an elder mediator in your area, start by asking for referrals from health professionals or hospital social workers or search

You can also find a description of the charges in the prospectus for any variable annuity that you are considering.

What are the four key medical/estate plan documents you need now?

Many of my clients have asked what are the critical documents needed, particularly in view of the COVID-19 pandemic. Simply being married does not give you the legal right to gain access to your spouse’s medical records or make medical decisions on your spouse’s behalf, even in an emergency. To avoid this problem and to help others care for you and to achieve your overall estate planning goals, the following documents create an effective medical/ estate plan package:

1. Healthcare Power of Attorney;

2. General Financial Power of Attorney;

3. Advanced Directive for Medical/Surgical Treatment (“Living Will”); and online at The Academy of Professional Family Mediators website (apfmnet. org) or Mediate.com

4. Will (or a Will with a Trust).

Both sites have searchable directories.

Or, to search for free/ low-cost community-based mediation programs in your state, see the National Association for Community Mediation website (nafcm. org). Unfortunately, not all states offer them.

There is currently no universally accepted credential or professional standard for eldercare mediators, so make sure the person you choose has extensive experience with elder issues that are similar to what your family is dealing with. Also, be sure you ask for references and check them. Most elder mediators are attorneys, social workers, counselors or other professionals who are trained in mediation and conflict resolution.

Careful medical/estate planning should include preparation and signing of these documents, to accomplish your goals and protect you, both during your lifetime, and at the time of passing. The Power of Attorney documents allow you to designate those agents whom you authorize to help you on your behalf during your lifetime, and the Will/Trust documents allow you to nominate others to help with your estate after your passing, as well as to identify the beneficiaries and the distributions to them, to accomplish your estate planning goals.

Selected information in this column has been taken with permission by Continuing Legal Education in Colorado, Inc., from the Colorado Senior Law Handbook, 2020 Edition (Chapter 17: Annuities, Rebecca L. Franciscus, Esq.), which is a copyrighted publication and may be accessed and downloaded for free at: www.cobar.org/For-thePublic/Senior-Law-Handbook.