How Will You Handle Your Aging Parents’ Finances
The older generation were raised to not talk about money with other people. They think it a very personal subject. Although it might be hard to talk about money with your parents, how will you handle your aging parent’s finances without having a conversations with them, about their financial goals.
It’s best to start financial conversations early with your parents. Discussing your parent’s financial situation can feel awkward. Estate planning conversations can be upsetting for you and your parent. It’s hard to consider a time when your parent may not be making his own decisions. Expect to have many conversations to build comfort and get the facts you need. Consider opening the conversation with an example from the media or someone you know who has had financial issues. When talking about the difficulties that others have faced ask how your parents would do it in a different way.
Even if your parent will not discuss financial details, you can encourage him to organize his information so that you or someone else can step in to handle your aging parent’s finances during an emergency. Tools like financial power of attorney and living trusts should be put into place before they are needed.
Respect your parent’s money style. Keep in mind that strategies and investments that are right for you may not be right for your parents. By talking with and observing your parent you should develop a clear understanding of your parents’ financial goals and needs.
When you are faced with significant changes to your parent’s long term care, you may wish to enlist the help of their financial advisor to revamp their portfolio to better meet your parent’s current needs. It can be helpful to create different scenarios about how long your parents’ funds will hold out at current and projected levels of care.
An important part of handling your parents’ finances is Medicaid planning. If it looks like your parents’ money will be used up via long term expenses, hire a Medicaid planning lawyer to help ease the transition to Medicaid.
When you begin to handle your aging parents’ finances, regular check ins and reporting to your parent and with your parents’ permission to your siblings are a good idea. You may find that using a personal accounting tool like Quicken is helpful so you can easily track income and expenditures and create reports for your family.
Other steps you can take to streamline the daily chores of handling your aging parents’ finances:
Create a chart or list of all the usual deposits and monthly bills can be really helpful. This can help you discover if anything is missing.
Create a complete list of your parent’s assets. Include other important financial tools like life insurance and long term care insurance policies.
Keep copies of your parent’s living trust and financial power of attorney in your files along with the supporting documentation when you begin to serve as successor trust or your parent’s agent so you can provide copies to financial institutions.
Receive and pay bills online. Set up automatic payment of recurring bills like utilities and insurance payments from your parent’s bank account. Consolidate accounts when appropriate. Over time your parent may have set up accounts at various banks and brokerage companies. This may be a good time to simply the number and type of accounts.