Updated: May 5, 2020
“We’re getting older, we’re living longer, and we’re changing what it means to age. We’re also entering new territory. How do we plan for longevity, what does it mean to age well, and how can we – and those we love – live safely, securely, and independently for as long as possible?”
This excerpt from a guide created by Fidelity Investments hits the nail RIGHT on the head.
The day may come — if it hasn’t arrived already — when you’ll be parenting your parents.
Whether it be looking after their groceries, taking them to appointments or setting up home care, chances are they will require some level of help.
They may also be losing their ability to stay on top of routine money matters. Or they may lack the knowledge to handle some of the more involved issues of later years, such as tax and estate planning.
If you’re lucky, your parents are willing to accept your help and are open to help and discussing their financial situation with you. But for many people, it’s not so easy.
Some parents simply aren’t comfortable asking for help or sharing financial matters with their children, and a strategy may be needed to begin the conversation.
A recent article published by Assante Life suggests a few tips:
Initiating the talk
Easing into the theme often works best. You might broach the subject by mentioning a real-life financial situation involving a relative, friend or co-worker, such as a conflict among siblings over an expected inheritance, or a case of fraud that targeted a senior. Or you can talk about some element of your own financial life, perhaps updating your will, then lead to a question about your parents’ will or whichever subject you raised.
If you think the money talk is going to be overwhelming for your parents — or for you — consider having a series of little chats now and again. For example, one time you might ask if they have a power of attorney or enduring power of attorney. On another occasion, you might ask about their will. If you have siblings, it may help to share the effort.
Finding out about finances
Very important to find out, but possibly difficult for your parents to divulge, is their financial status. Is their retirement income sufficiently covering their expenses and lifestyle? Do they have the financial resources to meet future contingencies such as health care needs?
Ask what insurance coverage they have — not only life insurance, but also any long-term care coverage. It’s important for someone — whether it’s you, a sibling, or your parents’ lawyer — to know where these policies are and who the issuer is, in case a claim needs to be made.
If your parents have significant assets, such as a vacation property or investment portfolio, they may not be aware that their death could trigger a sizeable taxable capital gain. An estate plan, possibly including one or more trusts, might help preserve their assets.
Find out if your parents are aware of senior fraud and how it’s perpetrated. You may want to suggest they check with you first whenever an individual or business asks for money or offers a service.
How you’re affected
Once you’ve gathered information from your parents, you’ll have a better idea how you can help them. That might range from simply helping them with their day-to-day banking to providing them with financial support.
If you are named executor or co-executor of their will, you’ll want to know where the will is kept, along with any other important items, such as a safety deposit box key. You’ll also want the names and contact information of their lawyer, accountant, financial advisor, banker and other professionals.
Do you have financial power of attorney and/or power of attorney for personal care for your parents? These documents allow you to make financial and personal care decisions on behalf of your parents. You’ll need contact information for your parents’ physicians and medical specialists.
If you have siblings, it can be very beneficial to encourage your parents to communicate their plans for your inheritance. Any unexpected issues among siblings can be dealt with now, avoiding conflict after your parents’ passing.
Helping your parents is all about finding out if they’re in control of their financial life and stepping in if they are overcome by financial issues. The sooner you start talking, the better. If you wait until a health or financial issue develops, it means starting off in a stressful situation. If all goes well, your parents will not see your involvement as an intrusion, but as a way to show you care.
These are great starting points and should be considered when dealing with your aging parents. It’s also a good exercise to planning out this stage of life for when you get there.
Let’s face it, the idea of getting old and having to depend on anyone is scary for everyone but it’s important that baby boomers and gen Xers break the cycle of the silent generation by having these important conversations with your children.
Sometimes, it can be beneficial to have a knowledgeable, impartial third-party present for family conversations around financial matters. If that is the case in your family, please remember that we are here to help you.
Fidelity Investments created an excellent guide that allows you to navigate this journey with a useful tool.
The first section provides information on aging goals and preferences.
The guide then provides useful conversation starters and worksheets that allow you to work with your family (aging parents or your kids for your own plan) in order to put in place a strategy with supporting documents that will be very helpful for everyone involved in the process.
Here it is for you to download: Aging Well: A planning, conversation and resource guide