It is inevitable, and not necessarily enjoyable, to begin financial planning for elderly parents. Discussing finances with your aging parents can be tough, but necessary. In this article, you will glean a few tips on how to begin financial planning for your elderly parents.
Start Early – Before a Crisis
If your parents are in good health, do not procrastinate on having “the talk” about finances. It is important to start the discussion early on before an emergency or crisis rears its ugly head. Initiate a conversation with your folks about whether they have made any long-term plans and where to find important documents.
Keep in mind that your parents have been independent for most of their lives, and discussing their personal finances could make them fearful they are losing their independence. Keeping a positive approach to the subject and reassuring your parents that you want them to maintain their independence for as long as possible may help squelch some of their fears. It might be beneficial to have multiple mini-conversations about financial planning.
Start with the Will: Make it a Family Goal
One important document for every adult is a will. A will names who will inherit assets when you die, allows you to select guardians for minor children in the event of your death, and enables the testator to distribute assets as he or she sees fit. No one wants to think about dying, but it is unavoidable.
Engage your parents about their wishes in the event of their death by starting a discussion about whether they have created a will. Make it a family goal for everyone to acquire a will because it will make the life transition more bearable for everyone involved. There have been many instances when families have been torn apart because of fighting about assets due to lack of planning. A will can alleviate these situations.
Another important document is a living will, which is a document that will describe your parents’ medical treatment preferences, including, but not limited to, DNR directives.
Ask About Legal Matters: Talk About Your Own First
Talking about legal matters could be a potentially sensitive topic when you are financial planning for elderly parents, but it can be made easier if you talk about your legal matters first. There are a few items that should be discussed, and it will probably take more than one conference.
As mentioned above, start gathering information before a crisis so everyone can be prepared and informed while financial planning for elderly parents. Keep all relevant papers and information together so it can easily be found when it is needed.
Find out who your parents have assigned as power of attorney. A durable power of attorney acts on the behalf of your parents for property and finances if they are incapacitated. It might help to share your own situation with your parents, since planning your estate is not an issue only associated with age.
A health care power of attorney will make medical decisions on behalf of your parent. Know where to find a list of medications and dosages. It is also a good idea to have contact information for doctors and pharmacies.
Income and Expenses
It could be helpful to set up automatic deposits and bill payments when financial planning for elderly parents to make sure bills are paid on time. Make sure you know where to find the following list of items to help efficiently plan:
- Location of safe deposit boxes and keys.
- Contact information for financial advisors.
- Sources of income and assets.
- Insurance policies.
Other Important Documents
It is important to know where the following items are in case a parent is incapacitated:
- Social Security numbers.
- Birth and Marriage Certificates.
- Deeds to property and cemetery plots.
- Vehicle titles and registration.
Consider Asking About Lifestyle: Do Your Homework
Have an open discussion about your parents’ expectations, their available funds, and the available options for their future living arrangements.
An independent living facility is usually like living in your own home, but there is someone else to take care of home maintenance. Generally, there are a variety of social activities and events to keep the residents entertained and give them opportunities to make new friends.
An assisted living facility might be a better choice if your parents need help with daily living activities. Oftentimes an assisted living facility will assist seniors with many of the responsibilities of everyday life. Laundry, transportation, medication management, meals, bathing, and dressing are just some of the tasks that an assisted living facility can facilitate.
Keep in mind that elderly financial assistance is available for those who might need assistance with some of the living costs.