Financial Assessment: What to Look at Before Any Care Decisions Are Made

Here's a mistake families make constantly: they start exploring care options before they know what they can afford. They fall in love with a facility, or a care plan, or a solution — and then discover that the finances don't support it.

The financial assessment comes first. Not because money is more important than care quality, but because the money shapes the realistic universe of options. You need to know what you're working with.

This doesn't have to be a grueling process. It's mostly a matter of knowing where to look and what questions to ask.

What You're Trying to Find Out

You need a clear picture of four things:

1. What income does your parent have coming in each month?
2. What assets do they have — savings, investments, property?
3. What existing benefits or insurance coverage applies to care?
4. What does their current spending look like, and what might care cost on top of that?

That's it. You're not trying to build a 20-year financial model. You're trying to understand the realistic range of what's possible.

Income

Start with the basics: Social Security, pension if they have one, any part-time work. If your parent has investments that generate income, include that.

The key number: monthly income. Write it down.

Assets

This one requires a bit more digging, and it requires your parent's participation. If they're not ready to share this, that's a conversation to have separately (see: when parents refuse to talk about the future).

What you're looking for:

• Savings and checking accounts — total balances
• Investment accounts — 401(k), IRA, brokerage accounts
• Real estate — home equity, any other property
• Life insurance with cash value — sometimes overlooked
• Any other significant assets — a business interest, inheritance expected, etc.

You don't need exact figures right now. You need order of magnitude. Is the total picture $100,000? $500,000? $1 million-plus? That changes the options significantly.

Insurance and Benefits

This is where people leave money on the table.

Long-term care insurance — Does your parent have a policy? If so, get the details: what does it cover, what's the daily benefit, how long is the benefit period, what triggers it? Many families have policies they've never looked at carefully.

Medicare — Important to understand what Medicare does and doesn't cover for long-term care (short version: less than most people assume — more on this in another article).

Medicaid — If assets are limited, Medicaid may eventually come into play. Understanding eligibility and look-back periods matters for planning purposes.

Veterans benefits — If your parent is a veteran, there may be benefits available — including the Aid and Attendance benefit, which is underutilized and can be meaningful. Worth looking into specifically.

Current Spending

What does your parent spend in a typical month right now? Housing, utilities, food, transportation, healthcare copays, medications, entertainment.

This baseline matters because care costs get added on top of it — or replace some components of it. If your parent moves to assisted living, they might stop paying for a mortgage and utilities, but start paying for room and board plus care fees. The math isn't always as dramatic as the sticker price suggests.

Getting Help With This

If this feels overwhelming, a few professionals can help.

A fee-only financial planner with experience in elder care planning (sometimes called an elder care financial specialist) can run the numbers and model out scenarios. Unlike commission-based advisors, they don't have a financial incentive to push particular products.

An elder law attorney can help with issues that intersect law and finance: Medicaid planning, trusts, asset protection strategies. If there's real complexity in the financial picture, they're worth consulting early.

The Honest Part

Talking about money with your parents is uncomfortable. For many families, it's more uncomfortable than talking about health or death. There's something about money that feels private, even sacred.

Push through it. The alternative — making care decisions in the dark — is genuinely worse. You can navigate an imperfect financial situation if you know what it is. You can't plan around a picture you refuse to look at.

Start with a simple ask: "Can we sit down together and make sure I know where things stand financially? Not to pry — just so I can help if and when you need it."

That's a reasonable request. And it's the right first step.