Often, our parents need a gentle nudge or reminder to take their medication or make it to a doctor’s appointment. Other times, there’s the need for full financial intervention. The tough job is knowing the difference.
Signs That You May Need to Intervene
You may want to consider some degree of financial intervention if your parents repeatedly exhibit multiple symptoms, such as the following: inability to handle day-today details, exorbitant expenditures, grandiose thinking, reluctance to spend money, increase in the number of checks written, excessive opening and closing of accounts, uncharacteristic withdrawals of large sums of cash, unattended long-term obligations, or unpaid bills.
How to Approach Your Parents
At issue is the element of control — most seniors loathe giving up control in their lives. The best approach is to appeal to their sense of protection where you’re concerned. For example, you might say something like, “I’m attempting to do my own financial planning, but I need to know more about yours in order to plan accordingly.” This can then open the discussion about their plans for long-term care and if they have money earmarked for assistance if needed, either through savings or a long-term-care insurance policy.
In some cases, the most effective strategy may be to engage the services of a third-party expert, such as a financial planner, tax advisor, and/or elder law attorney. Parents often feel threatened when children pry into their financial matters. Utilizing the services of an outside professional will help let them know that you have their best interests at heart.
How to Organize Your Parents’ Finances
However, you end up dealing with decisions about your parents, you’ll need to draft or find the paperwork listed here:
- Sources of retirement income — If your parents don’t keep good records, this may mean checking the mail regularly to wait for income checks and bank or investment statements.
- Residential preference — You should regard staying in the family home as a temporary situation that must eventually change regardless of your parents’ wishes. Should your parents develop an illness or dementia, they will likely need 24-hour care at some point, and not many adult children can provide this on their own.
- Last will and testament — While it’s important to honor your parents’ wishes, it’s also important to stave off sibling arguments and discord in the future. Ensuring your parents write a will helps make sure assets get distributed according to their wishes.
- Durable power of attorney — This is legal authorization to take over your parents’ finances and make decisions on their behalf. A durable power of attorney for healthcare (DPAHC) allows you to make healthcare decisions on their behalf.
- Living will — A living will is similar to a healthcare DPA, but is also an advance directive of the actual wishes of the incapacitated person regarding healthcare, such as life-sustaining measures or resuscitation.
- Funeral arrangements — Many times seniors make these arrangements but forget to tell their children.
- Update beneficiary forms — These may be outdated and include everything from insurance policies to investment payouts.
- Create a plan for estate taxes — The larger the estate, the more prudent it may be to seek advice from an estate attorney or financial advisor.
The key elements to your parents’ financial security and longevity are to determine how much they need to live on now — and in the future — and be sure to factor in increased healthcare expenses.
Please call if you’d like to discuss this in more detail.