How to Talk to Aging Parents About Finances and Estate Planning
It is essential that as your parents age, you have
conversations with them about their finances. To broach the topic, you might
bring up current events like the coronavirus pandemic, its effect on economic
conditions, and how it relates to the security of their financial future. The
conversation should come from a calming place of love and concern. Speak to
them respectfully about how the coronavirus pandemic has you thinking about the
importance of their planning and preparedness.
Once you begin the conversation, move away from the pandemic as
your introductory technique as you do not want to create a sense of panic or
fear. Instead, delve into legal and financial
reviews, processes, and parameters. US News reports that your parents’ financial analysis
should include essential legal documents, financial accounts, and associated
vital contacts, long-term care decisions, and claims. If you live apart, lay
the groundwork to help them with their finances remotely.
It is generally most comfortable to begin your conversation
with legal documents that hopefully your parents already have in place like a
will, trust, living will, and powers of attorney. If your parents do not have
these documents, they must retain an attorney and create the ones that best
suit their needs. If you need to help your parents manage their finances, you
must have a financial power of attorney. A financial power of attorney allows
you to make financial decisions for your parents in the event they become
incapacitated. This is an essential estate planning document. In the absence of
a financial power of attorney, the courts become involved, and solving health
or financial issues becomes a lengthy, expensive process over which you have
little control. 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.
Once you have assessed your parents’ legal documents, it is
time for some financial discovery. Even if your parents do not currently need
help, having an overview of their finances and a financial power of attorney to
help them in the future is crucial to their aging success. Begin by listing all
of their accounts, account numbers, usernames, and passwords as well as employee
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 in case the need arises in the future. Also, learn about
any online bill paying or automated, recurring 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 insurance, 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. It is beneficial to know what to
expect.
Digital technology has made oversight of parents and their
finances easier than ever as long as you have a financial 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 about the goings-on in your parents'
accounts. 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.
Visit our website at www.ElderLawOmaha.com.
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