Preparing for Paying for End-of-Life Care


As you start to get your affairs in order, it’s a good idea to stop and think a bit about what sort of end-of-life care you’d want — and how you’re going to pay for it. No one wants to think about these things, but bills are going to come at you when you don’t want to deal with them. Just because you’re talking about really sacred human moments, doesn’t mean capitalism isn’t going to stick its sociopathic nose in the middle.

Your Family Wants to Be With You, Not Manage Money

My neighbor Shay is currently experiencing this as her father is dying. My heart breaks for her because of the insult on top of injury she received when the hospital discharged her dad to a hospice facility and they asked his grieving children for big gobs of cash up front to let him in the door. Their Dad, at this point, isn’t communicative. If he had big gobs of cash set aside for his care, it wasn’t readily apparent to his kids. They were there to hold his hand and tell him that they loved him, not be his personal comptroller and manage his cash flow.

Fountain from Angels in America

So let’s get ourselves prepared for end-of-life care, as a gift to our loved ones, if not ourselves.

Dying is a bit like being born. Even when it is close, you don’t know how long it will take. And like a birth, death is accompanied by changes in our usual activities. Birth and death are BIG, life changing events, and they are followed by a period unlike any other time of your life (grieving after a death or caring for a newborn after a birth) that often require the participants take time off of work — often at an unplanned time, usually unpaid. In Shay’s case, it also required she travel to where he is and move from AirBnB to AirBnB as her Dad’s dying takes as long as it takes. So in addition to the emotional toll and the expense for end-of-life care, being there for a family member’s end of life brings a host of new expenses and less money to handle them. Again, you can help ease things for your loved ones with some planning. 

How Much Is This Going to Cost?

Shutting down a body is long and slow. The time from when you know there’s nothing else to do can be six weeks or so. When a dying person takes to their bed and starts sleeping all the time, there might still be three weeks or so to go. If they stop eating (much), it may be another two weeks. If they give up fluids entirely, it’s closer to four days. It’s not unusual as the brain shuts down to have some psychotic episodes, scrambling to escape death or being upset and the people “killing” you — it’s heartbreaking for the witnesses — but death often comes within a few days of that. 

I remember my Grandmother telling me she kept hearing her mother calling her. My husband’s cousin told his parents he kept seeing angels waiting for him just beyond them. It’s super variable and individual, though, and a big question comes up: where will you do this? 

Few people get to just wake up dead with no infirmity first. (And if that’s you, sheesh, overplanning isn’t going to kill you, so may as well do it.) Most people enter a period sort of like the spring of 2020: just when you start to get used to the new normal, the whole world tilts again. Get used to being resilient. Just be aware that this is a season FOR resiliency, and don’t expect to know what’s going to happen next.

To get prepared, you can determine whether you’d like to try to stay at home. In that case, get hooked in with a visiting nurse or hospice or palliative care association. At least research what’s available in your area. Check with your local Council on Aging for some places to call, or just Google. Getting a relationship set up before you need it can be the difference between dying at home or in some institution.

When we say institution, we’re probably not talking about a hospital. Dying in a hospital isn’t actually as easy as you think: hospitals need the beds for people who need medical intervention. Dying, like being a newborn, isn’t all that necessary to medicalize. Chances are you’ll be discharged to either a nursing home or, if you’re lucky, a hospice facility.

If you end up going to a nursing home or hospice facility, expect that to cost about $4K a week. This is NOT covered by Medicare! (It’s complex, of course, but the basic rule is that Medicare pays to get you well from an unwell state, i.e., rehab, and it provides some medical services to the dying, i.e., pain meds, but the room and board and personal care attendant parts are basically private pay.) Note that this relates to how stays in long-term care in nursing homes are not covered, either, once your Medicare-allowed rehab days are used up.) More details here: https://www.medicare.gov/Pubs/pdf/02154-medicare-hospice-benefits.pdf

If you are at home, expect to need round-the-clock caregivers, typically at $30/hour × 24 hours for up to maybe six weeks. That’s maybe $30,000. When my brother-in-law was dying, my sister was concerned about the huge cost of his care, about $16,000/month. I advised her to just pay it: the cold comfort was that it wouldn’t be for long. (Comfort is thin on the ground when your husband is dying.) And it wasn’t – he was gone within three weeks of that conversation.

And How Do We Pay for It?

So, where would you get $30,000 for end-of-life care? This is just another version of saving for your old age. I tell my financial planning clients that the average spending on health-care in the last two years of life is $42,000 a year. (I’ve also heard $59,000 for just the last year.) Basically, a pot of money needs to be held back because longevity needs to be funded OR end-of-life, (although not both.) 

When I’m setting up a retiree’s buckets of money, I like to separate the money into three pieces and I use the analogy of a farm: the investments (money growing out in the field), the short-term savings/CDs (money growing in the kitchen garden), and the pantry (money sitting in the checking account ready to use). Many people are surprised by how much cash I have people keep on hand in the checking account, but it gives that resilience I mentioned earlier to have nearly a year’s living expenses already on hand in case anything happens. And by “anything” I mean end-of-life care.

So here’s the idea: take at least $30K out of your investment portfolio or let a CD not renew and leave it in your checking and/or savings account as the base. 

  • If you have standard checking and savings accounts, EITHER appoint a Durable Power of Attorney access to it – the forms need to be updated regularly , OR simply open up a joint checking account with whoever might want to pay the bills and keep $30,000 or so in there. (Note that this can screw with your estate planning as that money passes directly to the joint owner without before the rest of the estate is totalled up.)
  • If you have a revocable trust, consider adding a co-trustee or resigning as trustee and appoint the successor right now. Or simply open up a joint savings or checking account with whoever might want to pay the bills.

No investments or CDs? There’s something called a HECM Line of Credit that could be helpful, where you take out a line of credit against the house. It’s not for everyone, but in some cases it is. Another option is to sell some things that you really aren’t going to use going forward: a timeshare or the RV, the boat or the camp … things that are meaningful to you and you will miss, but selling them is both part of getting the money you need AND part of cleaning things up for those left behind. It’s important to tell your loved ones WHY these things are important, too: sometimes the closing out of an era gives you an opening for really meaningful conversations. 

I suggest that you explicitly talk about the bills of your grieving family members. In our family we have a tradition that the parents pay for the airplane tickets. I think we might also want to add to this that the dying person pays for the AirBnBs and perhaps 50% of lost wages that family members suffer from this weird form of maternity/paternity leave. Financial stress on top of everything else just feels like one thing too much. If you go that route, it’s another thing to think about when you set up our buckets of money. 

End-of-life care isn’t always easy to think or talk about. You may be resistant, your family may be resistant, but you make it easier for everyone, if you don’t shy away (because talk about it or not, ready or not, it will come.)