February 26, 2021
THE IMPORTANCE OF TALKING TO YOUR AGING PARENTS ABOUT FINANCES AND ESTATE PLANNING
As your parents’ age, it is important that you have conversations with them about their changing life situation. Make sure it is clear to them the conversation comes from a place of love and concern, and that you want to find out what you need to know to make sure their wishes are honored, and their autonomy and quality of life is maintained.
Important things to discuss include essential legal documents, financial accounts, and associated vital contacts, and long-term care decisions. If you live apart, lay the groundwork to help them with their finances remotely. Here is a good article from U.S. News to read in advance.
There are certain legal documents that hopefully your parents already have in place like a will, trust, living will, and a health care proxy. If your parents do not have these documents, it is a good idea to retain an attorney and create the ones that best suit their needs.
At the very least, suggest creating a good quality durable power of attorney. A durable power of attorney is a cornerstone document that will allow you to help your parents in the event they are incapacitated or hospitalized.
If your parents already have their legal documents drawn up, find out where they keep them and review them carefully. If any documents need to be amended, suggest that your parents meet with an attorney to make the relevant changes. Be sure their documents reflect the state law in which they reside.
Even if your parents do not currently need help, if they are open to it, having an overview of their finances will put you in a position to best help them should the need arise. Begin by listing all of their accounts, account numbers, usernames, and passwords as well as contact names. Include insurance policies, the agent’s name, and where the policy is, as well as how they pay their premiums. Include any online medical accounts or list their doctors’ names and office numbers. The idea is to create a comprehensive list of all of these accounts. Gather your parents’ Medicare and Social Security numbers and their drivers’ license numbers. Know where they keep this information so that in the future you will know where to look. Also, learn about any online bill paying or automated, re-occurring activity. These usually include monthly bills like electricity, natural gas, water, etc. but may also include quarterly payments or annual subscriptions.
If your parents still live in their long-time home, discuss if it is viable that they live out their days there, or if downsizing to a retirement community or moving closer to where you live appeals to them. Help them come to a decision that is best for their set of circumstances. If they do not have long-term care insurance or some other mechanism to aid them in times of need, talk about the topic, and try to come up with a solution. If they do have long-term care, be sure you have a copy of the policy, contact information, and the name of the insurer and agent. Review the requirements for receiving benefits so you can help them when they need to file a claim as most policies have a waiting period of 30 to 90 days before benefits begin. Know what to expect.
Digital technology has made oversight of parents and their finances easier than ever as long as you have a durable power of attorney and access to their account information. If they do not yet pay their bills online, or use auto payment, help them set up this option for their monthly bills. Remind them you will provide oversight to ensure proper billing. Offer to help them with their annual tax filings. Your help relieves some pressure on them and provides you with information that will allow you to help them. For your parents’ peace of mind, you can establish a monthly video chat to let them know their bill payments are progressing normally. Your involvement will allow you to identify any abnormalities in account activity, which may indicate scam attempts.
Having these financial and planning conversations with your parents today can help them live more securely and with less stress as they age. Most parents will try to avoid these discussions with their children because they may not be adequately prepared for what can lie ahead. Conversations that focus on proper legal documents and gathering financial account information will give you the data you need to help protect your parents.
We would be happy to help you and your parents with critical planning documents. We are open and taking new clients, and we hope to talk with you soon about your particular needs. Please contact our office or give us a call at 1 (941) 777-4696.