The best time to discuss finances with your parents is when they are competent, self-sufficient adults. Planning ahead and seeking out the appropriate professional financial assistance on their behalf can help ensure your parents enter their golden years in the most comfortable, stress-free and secure way possible.
You may dread having the "financial talk" with your aging parents, but this is one conversation that needs to happen sooner rather than later.
A recent article on KARE11.com, titled "Helping aging parents with financial matters," wisely advises approaching this topic in a respectful manner. The article stresses that you be extremely mindful of the delicate nature of your parents' financial and emotional needs, and that you should not step in if it is not necessary.
Diplomacy is a good start. A measured approach should help you determine when your parent requires some help, rather than relinquishing all control. Remember, not having financial independence when one grows older can be frustrating and depressing. Being aware of this can be very beneficial when you have these conversations with your parents.
Make a list of your parents' income and expenses. Make sure you include any monthly pensions, disability or government assistance your parents receive, as well as any monthly expenses they have (e.g., auto loan, mortgage, utilities, etc.). Keep track of their bank and investment information, such as PINs, savings and checking account numbers, investment accounts, CDs, and stock and bond information. Also, make a list of the contact information of their financial institutions, and think about setting up automatic bill pay for their monthly payments.
Get organized. Make a note of the important papers of your parents. These papers may include birth and marriage certificates, Social Security cards, insurance policies and mortgage information. Check the status of the will and estate plan of your parents. This should include updating the designations for their health care power of attorney and durable powers of attorney. Keep track of the originals and copies. Obviously, if they do not have a will and estate plan, make arrangements for them to speak with an experienced estate planning attorney.
Brush up on Medicare, Medicaid, and healthcare coverage. Do some reading on Medicare and Medicaid, which will help you help your parents now and in the future.
In the end, the best time to have discussions of this nature with your folks is when they are competent and self-sufficient adults. As always, plan ahead. Consulting with an estate planning attorney on their behalf can help you make sure your parents are comfortable and secure in their senior years.
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Reference: KARE11.com (August 13, 2014) "Helping aging parents with financial matters"