The topic of money can be off-limits in many families. Parents guard their privacy and children find it difficult to broach the subject. But, just as family members need to monitor changes in parents’ health as aging sets in, they also need to be aware of financial health and money management issues..
If you suspect that your parents need some assistance with their finances, communication is critical. Be sure to approach the subject sensitively and with their needs in mind. They have worked a lifetime to build their wealth, so it is important to allow them their dignity and to the degree possible, their independence in making decisions about money.
As part of your conversation about finances and financial needs, here are four key areas to explore:
The state of your parent’s finances – What are their monthly expenses? What is their annual income and what is the source of it? What form of assistance do they currently receive, or are they eligible for, including Social Security, Medicare and Medicaid? Are the bills being paid on time?
The essential documents. – Have your parents made arrangements for a Durable Power of Attorney (POA) so that someone can step in and handle their finances in the event they become incapacitated? Do they have a Last Will and Testament or, better yet, a trust? If not, contact an estate and elder-planning attorney to arrange for these documents as soon as possible.
Resources they own. – Make sure you know where your parents keep their financial records and the account numbers and names of their financial institutions. Do you know if they use a financial advisor, attorney or an accountant who can assist with many of these matters and how to reach him or her?
Health Insurance Coverage. – Find out where their health insurance comes from such as an employer or as part of a pension. Check to see if they have long term care insurance that may cover the expense of living in an assisted living or nursing facility. This will give you a better idea of what may or may not be covered in terms of their medical costs and future living arrangements.
By having a better understanding of the state of your parent’s finances, you will be in a better position to determine how you can best help them.