As kids, siblings often fight about things like who gets the best seat in the car or who gets the last slice of cake. But as adults, conflicts can be a bit more serious. As the baby boomer generation continues to age, one challenge many boomer adult siblings will face is deciding how to divvy up their parents’ caregiving costs.
Research shows that roughly 70% of elders will need some type of long-term care during their lifetime,1 and this comes at significant financial cost with homemaker services costing $163 per day on average and a semi-private room in a nursing home costing $260 per day on average.2
Meanwhile, only about one-quarter of adults nearing retirement have seriously considered getting long-term care insurance or a savings account for long-term care expenses.3 In many cases, the burden of paying for long-term care will fall at least partially on the shoulders of adult children.
Are you and your siblings grappling with your aging parent’s caregiving costs and wondering how to fairly split the burden? Check out these six tips that can help you navigate this prickly scenario while avoiding family feuds and frustration.
1. Don’t get swept up in “keeping score.”
There’s a lot of family baggage that can surface when siblings begin the conversation about how to split up their parent’s long-term care costs. You could deal with issues ranging from financial (“Dad helped with your down payment, but not mine.”) to favoritism (“Mom always loved you more!”) to distribution of labor (“I’ve helped dad more than you.”). Try to set aside the tit-for-tat mentality and instead focus on developing a harmonious solution.
2. Get professional help.
There are professionals that can help you and your siblings navigate the division of your parent’s caregiving costs. Consult professionals first to stave off conflict and ensure you’re taking the right strategy. For example, elder law attorneys and financial planners can help you achieve consensus and structure financial documents. And a family therapist could help you and your siblings constructively navigate conflicts by helping you express your feelings, understand other’s perspectives and solve problems together.
3. Use your parent’s money first.
If your parent has funds that can be used for long-term care, use those first before tapping into your money. This could possibly help your parent qualify for Medicaid in the future by using the “spend-down” strategy.
4. Consider dividing costs based on individual income percentage.
If you and your siblings’ incomes vary widely, an equal split of your parent’s caregiving cost may not be fair. Instead, you could divvy up costs based on income percentage. To calculate this, add up everyone’s adjusted gross income from their latest tax return, and then divide each sibling’s income by the total to determine individual percentage. For example:
- Jane and her siblings earn $200,000 total
- Jane earns $75,000
- $75,000 ÷ $200,000 = 0.375 (or 37.5%)
- Mom’s total caregiving cost is $1,500 per month
- $1,500 x 37.5% = $562.50
- Jane’s monthly caregiving contribution is $562.50
5. Factor in sibling-provided caregiving.
If a sibling is providing a significant amount of caregiving to your parent, consider assigning a monetary value to their time and subtracting that from their monthly caregiving contribution. The median cost of home care in the U.S. is $27 per hour, according to A Place for Mom.3
6. Get it in writing.
Get a legal document drawn up outlining how much each sibling is contributing every month. If your situation is a straightforward divvying up of caregiving costs, you could use a do-it-yourself legal forms website to create this at a low cost. If your situation is more complicated (like if one of your siblings is providing care, for example), then it’s best to consult an attorney, who can help you develop a legally binding personal care agreement.
Thinking about your own future.
Do your parent’s caregiving costs have you reflecting on your own life and wanting to be prepared for the care you may need someday? Long-term care insurance is designed to help you maintain control of where you will receive care, safeguard your savings, and protect your loved ones from the burden. Schedule an appointment with a local Bankers Life agent to learn more!
1U.S. Department of Health and Human Services, How Much Care Will You Need?, https://acl.gov/ltc/basic-needs/how-much-care-will-you-need, 2020.
2SeniorLiving.org, Nursing Home Costs in 2023, https://www.seniorliving.org/nursing-homes/costs/, 2023.
3A Place for Mom, How Much Does Home Care Cost? A State-by-State Guide, https://www.aplaceformom.com/caregiver-resources/articles/in-home-care-costs, June 2023.
