Navigating a clear course toward your financial security.

Helping Your Parents

As children, many of us were taught never to talk about money.  As we grew up, it was easier to have money-related discussions with our parents.  As adults, we now need more than ever to have financial discussions with our parents.  Many adult children find themselves responsible for their parents’ finances at some point, such as helping them pay their bills, driving them to doctor appointments or even arranging for nursing care or ultimately administering their estate.  The ideas below will help each of us prepare for these financial and personal responsibilities.

Step One: Start an open dialogue about estate planning

We have found that parents are more open to discussing their affairs if the adult child discusses his or her own personal estate plans.  This signals to the parents that the adult child has faced the temporality of life as well, permitting parents to open up a bit more about their own sunset-age concerns.

The adult child’s opening statement might go along the following lines: “Bob and I just met with Attorney Smith and she was so helpful in getting our estate planning documents completed.  Mom, what have you and Dad done about your estate planning, if you don’t mind my asking?” This open-ended approach will lead to a definite response, usually one of relief that you finally asked! Your parents will appreciate the demonstration of concern that you have shown.  It will be comforting to them to know that you want to assist them when the time comes that they are in need of help.  Let them know that you will respect and go along with their decisions.  Share with them your own preferences and plans.

Step Two: Review their documents

It is extremely important to ensure that proper estate planning documents exist.  Ask them about the following: wills, living wills, durable powers of attorney (DPOA), letters of instruction, trusts, and final arrangements.  Who are their trusted advisors? It is not a bad idea to contact these advisors and introduce yourself so that the communications path will be easier in time of need.  For example, Bearing Point Wealth Partners records in our database contact information for relatives.  We also track the names and addresses of other professionals with whom a client has a relationship.

Step Three: Ensure that their policies, contracts and beneficiary information are up to date

Insurance policies and retirement plans are necessary components to create financial security for family members for years to come.  It is very important to review the following facets of these documents:

Life Insurance Policies: Review the policy’s ownership, beneficiary and coverage amount every few years to make sure they still reflect your parents’ wishes.

Health/Medical Insurance Policies: There are four main types of insurance that will protect your parents’ assets:

  • Major medical insurance safeguards them from the high rising costs of medical care.
  • Disability insurance aids in the loss of employment income.
  • Medicare supplements help fill in the gaps of Medicare.
  • Long-term care covers the cost of health coverage for your parents either at a facility or in their home.

Pension Plans: You should review your parents’ pension plans as they may have different benefits, payout schedules, and beneficiary designations.  Record the types of plans, the plan sponsors, and the location of any related documents.

IRA, 401(k) and Other Retirement Plans: Once again, be aware of the type of plans your parents have, who sponsors them and where the documents are located.  Review the beneficiary information to be sure it reflects your parents’ wishes.  Check that the beneficiary information does not conflict with the provisions of estate planning documents, such as wills and trusts.

Military Retirement Plans:
Your parents may need help in determining the kinds of benefits they may receive from these plans as there are many different types.  Review the beneficiary information to be sure it reflects your parents’ wishes.

Step Four:  Write down important information

Here’s a list that may help you in serving as an executor.  With your parents’ consent, jot down the location of the following documents:

  • Deeds
  • Car titles
  • Military records (DD214)
  • Military benefit documents
  • Veteran’s Administration documents
  • Veteran’s Administration claim numbers
  • Birth certificates
  • Marriage certificate
  • Divorce decree
  • Social security documents
  • Safe-deposit boxes
  • Secured file boxes
  • Other items in safekeeping
  • Keys
  • Driver’s license numbers

Do your parents have the following?

  • Bank accounts
  • Credit cards
  • Mortgage information
  • Home insurance
  • Consumer loans
  • Auto loans
  • Auto insurance
  • Personal loans
  • Medications
  • Memberships

Whom do they rely on?

  • Family members
  • Friends/neighbors
  • Attorneys
  • Financial Advisors
  • Insurance Agents
  • Stock brokers
  • Tax preparer
  • Physicians
  • Dentists
  • Pharmacy
  • Veterinarian
  • Church
  • Utilities

The advances in modern medicine have permitted us to live longer.  Some seniors certainly question whether this is a good thing or not.  No matter, it is now being said that children may spend more time caring for their parents in their senior years than their parents cared for them as children.  There certainly is some truth to this.

The challenge is to make these senior years good years for our parents.  One of the ways is to call or visit your parents often.  They need to know that you care.  If they need help with paying bills, open a joint checking account so that you may handle this task with ease.  If your parents are becoming forgetful, have the routine bills (utilities, etc.) sent directly to your home for payment from the joint checking account.  Alternatively, you may want to consider having the utility company directly debit the checking account so that no one has to pay the bill – it will be done automatically.

Obtain a telephone book for your parents’ community and keep it at your home.  This will permit you to help with senior resources for your parents’ area.

You may also want to consider an emergency monitoring device to alert a designated person to attend to your parents when necessary.

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