Money. It’s hard to talk about. Add the complexity of an aging parent’s declining independence, and the conversation becomes ever more difficult.
Here are some tips to help you start the conversation.
1. Recognize the need to step-in – Look for unpaid bills, repetitious donations or gifts in a short window of time, and new advisors who are unwilling to work with the children or family. This is an essential step to avoiding costly mistakes and even financial predators.
2. Don’t avoid having the conversation – Discuss what is owned and how it can be accessed. This can help you avoid the need to involve the court system to obtain account access through guardianship.
Ask whether any long-term care insurance policies are in place. While it is hard for both the parent as well as the adult child to discuss the potential for incapacitation, foraging for information is the last thing a family member wants to do during an emergency. Similarly, know where important legal documents are located, including wills, trusts, and directives.
Lastly, if you suspect your parent(s) are struggling to make ends meet, discuss your concerns now. While this may be the hardest conversation to have, confronting the challenge sooner rather than later helps to avoid a financial spiral.
3. Set expectations with siblings – Involve other loved ones in the conversation. Though it may be easier said than done, try to identify what each person is able give, both financially and in terms of their own time.
4. Make it legal – Obtain a durable power of attorney for financial affairs (an attorney specializing in estate planning can draft this) to ensure you, a sibling, or a family member are able to act should the need arise. This may include a durable power of attorney for brokerage accounts, IRAs, insurance policies, and other resources.
5. Do your homework – If your parent(s)’ finances are tight, invest time in understanding the public programs and resources available to low-income seniors. This might include assistance toward housing and home energy bills, groceries, and other essentials. The resource guide below from AARP can help you begin to identify available support in your state.
6. Develop a financial plan of your own – It will be difficult to gauge how much support you can provide without understanding the strengths and limitations of your own financial situation. Put a plan in place to ensure your own security, understand how supporting family impacts that plan, and know where to set boundaries.
While no list can be exhaustive, we hope this post provides a starting point for dealing with some of the financial challenges in assisting and caring for aging parents.
AARP Guide to Public Benefits: http://www.aarp.org/aarp-foundation/our-work/income/info-2012/public-benefits-guide-senior-assistance1.html