Financial Matters

Tips for Helping Aging Parents

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If you were born between 1946 and 1964 then you are the generation known as Baby Boomers and it is likely that at least one of your parents is still living. According to the Center for Generational Kinetics, the generation born 1945 and before is known as Traditionalists. The Social Security Administration estimates a man reaching age 65 today can expect to live, on average, until age 84.3, and a woman turning age 65 today can expect to live, on average, until age 86.6. That means it is likely that Baby Boomers are not only raising their children, aging themselves, but also caring for aging parents.

Adult children who need to care for their parents face many challenges as their role changes from cared-for to caretaker. It is a difficult time for parents who realize they need help, just as it is a difficult time for adult children to see their parents become needier. Families need to approach these changes with sensitivity and most importantly, with a plan. Planning is the key to making sure everyone feels like their wishes are being respected. Here are some things to consider when helping aging parents.

  1. When it comes to making a plan, the sooner the better. The biggest concern is your aging parent’s mental capacity. The legal term is competency which is defined by Black’s Law Dictionary as the ability “to understand the nature of his acts, to understand and recollect the nature and situation of his property and his relations to persons having claims on his bounty and whose interests are affected by his will”. Therefore, plans must be made while your parents are able to make decisions about their financial and healthcare issues. Once they start to lose their mental capacity they will no longer be able to make these decisions legally binding.
  2. Help your parents work with an estate attorney to create an estate plan. Your parents should meet with an attorney to have all the all the necessary documents drafted and signed. If a plan already exists then make sure the documents are updated as laws and wishes may have changed. When and if they lose their mental capacity they will not be able to sign these documents. State laws vary but most estate plans will include wills, trust(s), and powers of attorney. These documents will state what your parents’ wishes are once they become incompetent and cannot make decisions for themselves about their financial matters and healthcare. The will and or trust will state what happens to their property at each other’s death. These are not comfortable topics to discuss but it is important to know what they want to have happen when the time comes.
  3. Be open about who is named as power of attorney for each parent. If there are several children have an open conversation about who is named and in what capacity. One child might have power of attorney for healthcare decisions and another for financial decisions. Understanding your parents’ wishes while they can talk about them will help avoid hurt feeling when the time comes to execute the power of attorney. The same applies to the successor trustee of any trusts, meaning who will control the distribution of trust assets after the death of both parents.
  4. Ask your parents to share information about their financial matters. Adult children should know where bank accounts are located, and in whose name they are titled. Your parents should have accounts that are jointly named, and if not have a designation that clearly states the beneficiary of the money upon their death. Frequently known as a TOD designation for Transfer on Death. If parents agree, an adult child could be named a joint owner on an account avoiding the need for a TOD designation. Parents should also share where important documents are located, be that in the home, attorney’s office, or safety deposit box for example. This would include estate documents, life insurance policies, real property documents (deeds), titles to cars, and other important documents.
  5. Become familiar with your parents’ health insurance. Once people reach the age of 65 they must sign up for Medicare. Understand which plan they have, traditional Medicare or Medicare Advantage. If they have traditional Medicare they may also opt to sign up for a Medicare Supplement Plan, also known as Medigap. Supplement plans can change year to year, so making sure your parents have the most up-to-date information and plan is important. There are resources available in each state to help them understand their options.
  6. Find out if they have a long term care policy. This is a policy that will cover certain expenses at a long term care facility. Benefits can be available for care in-home or facility-only, depending on the policy. With your parents’ permission, speaking with the financial professional who sold the policy will help clarify the benefits and under what circumstances they can be claimed. This will be important when deciding on what type of care can be provided as health worsens.
  7. If your parents have been working with financial professionals ask for an introduction. A personal relationship with these trusted advisors will help as your parents need more and more help with their finances. This might be a financial advisor or the bank manager where their accounts are located, anyone with whom your parents work with frequently.
  8. Plan for elderly parents’ future healthcare options by becoming familiar with the different types of facilities and the different options. Aging parents might need in-home care, assisted living, memory care, and or skilled nursing care. Visiting the different types of facilities and understanding the costs associated with the different levels of care will make things easier when it comes time to make a decision.

Asalyn Coachman is a Registered Representative of and offers Securities through The O.N. Equity Sales Company, Member FINRA/SIPC, 39395 W Twelve Mile Road, Ste. 102 Farmington Hills, MI 48331 (248) 482-3600. Investment Advisory Services offered through O.N. Investment Management Company. Financial Architects, Inc. is not affiliated with The O.N. Equity Sales Company or O.N. Investment Management Company. Asalyn earned a degree in Economics from Harvard University and a law degree from the State University of New York at Buffalo. She lives in Lake Orion with her husband and two children where she is active in organizations such as the Harvard Club of Eastern Michigan, Lake Orion Schools, and the Baldwin Center of Pontiac, Michigan, where she serves as board president.

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