When you have a child with special needs, estate planning requires special consideration. You'll need…
Talk to your parents about their finances as they age. To start the conversation, mention events like the Coronavirus pandemic, the impact it has on economic conditions, and how it is related to their financial security. The conversation should come from a place of love and concern. Speak respectfully about how medical emergencies have you thinking about preparing for potential problems or preventing them.
Starting the Conversation
Help your parents delve into legal and financial reviews and processes. US News recommends including essential legal documents, financial accounts, associated vital contacts, and long-term care decisions in their financial analysis. If you live far away, lay the groundwork to work with them remotely.
It’s generally more comfortable to begin your conversation with legal documents that your parents may already have in place, like a will, trust, living will, and a health care proxy. If your parents don’t have these documents, they must retain an attorney and create the ones that best suit their needs.
Durable Powers of Attorney
If you want to help your parents manage their finances, you must have a durable power of attorney. This document allows you to make financial decisions for your parents if they become incapacitated. This essential estate planning document avoids court proceedings for guardianship in emergencies. Without a durable power of attorney, 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.
A Detailed Financial Review
Once you have assessed your parents’ legal documents, it’s time for some financial discovery. Even if your parents don’t currently need help, having an overview of their finances and a durable power of attorney to help them in the future is crucial to their aging success. Begin by listing:
- Financial accounts
- Account numbers
- Employer contacts
- Insurance policies
- Insurance agent names
- Policy numbers and premium amounts
- Doctor’s names and numbers
- Medicare information
- Social Security numbers
- Driver’s licenses
Know where they keep this information so that you will know where to look 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.
Future Living Arrangements and Potential Health Care Needs
If your parents still live in their long-time home, discuss whether they will 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 circumstances. If they don’t have long-term care insurance or some other financial resources to pay for long-term care needs, talk about solutions. If they have long-term care insurance, be sure you have a copy of the policy, contact information, the name of the insurer, and the agent. Review the requirements for receiving benefits so you can help them when they need to file a claim. Most policies have a waiting period of 30 to 90 days before benefits begin. Know what to expect.
Monitoring Financial Activity for Problems
Digital technology has made oversight of parents and their finances easier than ever as long as you have a durable power of attorney and access to their account information. If they don’t 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 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 elder fraud.
Having these financial and planning conversations with your parents today can help them live more securely as they age. Parents may try to avoid these discussions because they’re not prepared to face what lies ahead. Conversations that focus on proper legal documents and gathering financial account information will help you protect your parents.