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Elder care program helps protect seniors' interests

Posted online

by James M. Lewis

for the Business Journal

Improved diets, an emphasis on health care and advances in medical care are contributing to more people living longer than at any time in history. Life expectancy at birth was 47 years in 1900; by 1991 it had increased to 76 years.

Not only are people living longer, but the U.S. Bureau of the Census projects that the percentage of persons 65 years of age and older in the entire population will increase from 12.76 percent in 1996, to 16.48 percent in 2020, to 20 percent in 2050.

Along with the aging of the population, families have become widely separated, geographically, and can no longer be relied upon to live nearby and assist with the care of elderly family members. Therefore, the need for care services is increasing.

Elder care is a service designed to provide assurance to family members that care goals are achieved for elderly family members no longer able to be totally independent. The American Institute of CPAs estimates that between $11 trillion and $13 trillion of wealth is controlled by persons age 65 and over.

This concentration of wealth attracts all kinds of "predators" who prey on senior citizens and make them frequent targets of various fraudulent schemes. The elder care service relies on the expertise of other professionals, with the CPA serving as the eyes and ears of the family members or responsible party.

The purpose of the elder care service is to provide assurance in a professional, independent and objective manner to third parties (children, family members or other concerned parties) that the needs of the elderly person are being met.

In other words, to provide the elderly the opportunity to live out their lives in their own homes with dignity and protection from predators who would take advantage of them. Following are three service areas involved in providing elder care services:

Consulting services. The consulting services portion of elder care looks to the CPA to provide information to family members about potential services available in the community, Þnding out whether home care is an option in a particular community and making a determination of the services that will be needed from outside professionals.

By utilizing a CPA to coordinate these services, as well as assisting the elderly person with Þnancial and tax affairs, family members have a central person to contact to verify that services of a certain pre-determined standard are being provided. Each plan has to be tailor-made to the needs of the particular elderly person.

As part of consulting services, the CPA can assist family members in selecting a care provider for each type of assistance required (the family members should always make the Þnal decision), communicate the family's expectations to each caregiver (in writing) and work with the caregiver to establish performance measurement systems.

All systems should allow for independent veriÞcation of the information being produced. Periodic reports should be made to the family members responsible for the elderly person's care.

Direct service provision. In some cases, the CPA may be asked to take a more active role in the management of the elder's care. This might include routine matters such as:

1. Receipt, deposit and accounting for income, or verifying that expected revenues are received.

2. Supervision of investments and accounting for the estate.

3. Occasional visits and inspections of logs, diaries or other evidence to determine that care is being provided in accordance with agreements and periodic reports to family members.

4. Arranging transportation for the clients.

5. Supervising household expenditures and making arrangements for unexpected repairs, medical emergencies, etc.

6. Periodic reporting of the client's Þnancial activity to the responsible family members. These vital services can all be provided by a CPA when family members do not have time to coordinate them, do not live close by, or both.

Assurance services. Elder care assurance services are close to traditional services rendered by CPAs except the engagement does not involve traditional Þnancial matters. Assurances might be given on the following:

1. Review of Þnancial transactions for reasonableness.

2. Inspection of logs and diaries to determine whether the caregivers are providing the services previously agreed on.

3. Reporting to the client or to a family member. The frequency of the reports to the family should be agreed upon at the beginning of the engagement.

In summary, the CPA, in the typical elder care service engagement, is at the hub of the wheel of providers, helping to plan, oversee and coordinate the care, and then conducting continuous and objective review of each service provider's performance.

In this manner, family members who are unable to directly oversee the care of their elderly relatives can have the peace of mind that their loved ones are being properly provided for.

Although the type of care envisioned in an elder care arrangement will probably be more expensive than institutional care, allowing an elderly relative to remain at home and live with dignity may be well worth the price.

(James M. Lewis, CPA, CFP, is a shareholder in the SpringÞeld-based CPA Þrm Kirkpatrick, Phillips & Miller.)


The American

Institute of CPAs

estimates that

between $11 trillion and $13 trillion of wealth is controlled

by persons age 65

and older.[[In-content Ad]]


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