The 5 Most Important Things You Should Talk About Your Aging Parents Finances
By: Rosemarie Tamunday Casanova — RN, BSN, MHA
If you are the primary caregiver for your parents or other aging relatives, you will soon come to realize that your responsibility is not limited to their personal health but will also include their finances. In this particular period of time, you need to plan ahead and be proactive.
Start now having a conversation with your parents about their finances while they're still able to communicate with you and tell you exactly what they want with their accumulated wealth.
Communication is Key
Before you can even begin to start organizing for your elderly relative's finances, you need to work out exactly where they stand with their money. Sometimes your parents may see you as a challenge when you begin asking them questions about their finances.
But if you discuss to them that you will be sincerely taking care of everything and will do this for their own security and benefits, you will soon earn their trust.
In this case, you may need to bring out a lot of specific questions like who's your attorney, do you have insurance, do you have the will, etc. You may not know those things until they fully discuss these details with you, and it's a very important thing to consider.
Tips in Taking Care of Your Elderly Finances
Senior Care advisors recommend that certain things should be discussed when talking to your elderly parents. The tips below will make that process easier for you.
Make sure your loved one has a power of attorney for both health care and finances in addition to a will. If a relative is frail or incapacitated, these documents will allow an appointed person to make medical or financial decisions for them.
It is crucial to apply for and obtain power of attorney in order to take care of the financial affairs of an elderly relative. In this day and age of fraud and security issues, privacy laws are such that no one individual can interfere in the financial affairs of another unless they have the express permission by the individual in some way, shape or form. If you do need regular access to their finances then you will need power of attorney. Since the individual remains the legal owner of any assets, it is legally binding and allows unlimited access to any affairs, though it is dependent on the individual's permission. In effect, it gives you the ability to run their finances for them.
Other important documents include an advance directive, living will, birth certificate, marriage certificate, deeds to property, deeds to cemetery plots, military discharge papers, insurance policies, and pension benefits.
Do you know what they owe? Could you pay their bills if you needed to? Be sure to ask these questions, in case your loved one gets to a point where they can’t physically write checks or take care of bills.
Debt can be severely detrimental to the mental health of an elderly individual and thus should be made a priority as soon as you realize that they are in fact in debt. There may have been a build-up of this over a period of time that you were unaware of. Most elderly people are very private and will rarely reveal their problems to others, especially those that are embarrassing. It is therefore possible that the damage may be extensive and far worse than it would have been had your elderly relative sought help as soon as their debt problems escalated.
When dealing with elderly debt, you should first sort out their existing finances. You should assess their income and outgoings. Household bills and credit card bills are included in this section, as well as any amounts used to purchase groceries and similar items over the past twelve months. You are essentially trying to determine how much your elderly relative can afford to live on and how much expendable wealth they have after all other expenses are paid. It may be an idea to work out the outgoings based on the last year or so.
Prior to taking over a particular set of finances, you should review all household bills and payments towards outstanding debts.
Are there assets that need to be monitored, such as property, accounts at other financial institutions, or heirlooms? All important topics to bring up in conversation with your family members.
Pension income and other sources should be taken into consideration, as well as the amount of wealth available for general provisions in the coming year if you apply the previous year's outgoings. Income is a vital key to your ability to budget. You must research the source of this money to ensure that bank credits will remain at the same amount. In the event that you fail to do this, you might find yourself in a financial mess on behalf of your aging relative, and that would certainly throw a wrench in your budgeting plans. However, if you do complete the necessary research then you can then begin budgeting from there.
Can you locate important insurance policies? Are you aware of the type of insurance they have and what it will cover?
Many types of insurance policy such as Long Term Insurance was primarily designed to help with payment for the costs of custodial & personal care of seniors.
If you are the primary caretaker then you actually should understand who they listed as a beneficiary on their insurance accounts once something happens and you need to access that, if you're not the beneficiary you won't receive any information from the company or the insurance agency that keeps it.
Timing and Empathy
Try to make sure that you don't feel rushed when making the conversation with your elderly parent .If more family members must be involved, choose a time when everyone will be available. Recognize that you respect your parents and that they could find this a challenging talk to have. By making plans in advance, you can demonstrate your commitment to support their independence.
Aging is a part of life. It does not have to be a time of fear and uncertainty, for you or your parents. If you are the primary caregiver, start having a conversation with your parents about their money matters. The bottomline here is to approach the conversation in a respectful way and allow them to lead the conversation if they were able. And you have to ask the tough questions above because if you don't, you may be left wondering and looking and searching for those things at a time when you really don't have the energy or your grieving.