Talking to your Aging Parents about Finances
While you may encounter some resistance, it’s important to talk with aging parents about their finances and work through potential issues they may face as they age. Waiting until past due notices start piling up, or worse, your parents fall prey to a scam, can make life more difficult for everyone. Preparing now to try to prevent these problems, coming from a place of love and understanding, is far easier than trying to pick up the pieces after everything falls apart.
Here are some suggested steps you can take right now:
1. Discuss Financial and Estate Planning Goals
Talk to your parents about their lifestyle, needs, and priorities as they age. Check if they have an estate plan in place, or are working with an estate planning professional. If they haven’t done so recently, they may want to ask a financial professional to test their asset management plan against various scenarios.
2. Make a Document Checklist
Determine what your parents have in place, and check that they have proper, up-to-date documentation. Some of the main documents they may have are:
- Current will
- Living trust
- Financial power of attorney
- Medical directives
- Insurance policies
- Health records
- Tax returns
- Credit card and loan documents
- Bank and investment statements
- Social Security information
- Location of safe deposit boxes and their keys
- Contact information for all professionals
3. Enlist Some Help
If you have siblings, include them in your conversations. They can help relieve some of the emotional burden on you and provide support while you talk to your parents. You may want to consider including a financial planning professional in your conversations, to act as an objective third-party as you navigate some of the more emotional conversations around aging and finances.
4. Explore Long-Term Care Payment Options
A private room in a nursing home can quickly deplete assets. Setting up a plan ahead of time to cover these costs can help make the decision to transition out of independent living and into assisted living easier.
Respect Their Dignity
It can be hard for parents to let their children help with their finances, especially if they’ve been independent for several decades. They’ve spent a large part of their lives managing a household and being in charge. Many of these suggested steps can be taken gradually, and you can adjust as your parents become more comfortable with discussing their financial picture. If you'd like more assistance planning for the financial and living needs of an elder in your family, contact your Cranbrook Wealth investment professional.