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The Best Way to Discuss Estate Planning and Finances With Aging Parents

As your parents age, it’s important for you to become familiarized with your parents’ finances and obligations so you are in the best position to assist them, should it become necessary. This topic may be difficult to bring up, therefore it is important to take a soft approach. To broach the topic, you might bring up events like the coronavirus pandemic, its effect on economic conditions, and how it relates the need to always be prepared for unexpected circumstances, and how such situations could impact financial security in the future. 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

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. From there, you could transition to finances and long-term care considerations.

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
  • Usernames
  • Passwords
  • 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 whether they are considering downsizing to a retirement community or perhaps moving closer to where you live. Help them come to a decision that is best for their circumstances, while being sensitive to what they are feeling and want.

If they don’t have long-term care insurance or some other financial resources to pay for long-term care needs, talk about solutions. Be sure to take the appropriate steps in safeguarding their assets by consulting an elder care attorney. 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, so the proper timing is everything. 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.

We would be happy to help you and your parents with critical planning documents. To speak with one of our experienced elder law and estate planning attorneys, please contact our office today at 1 (800) 680-1717. We look forward to the opportunity to work with you.

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