How to Help Your Elderly Parents
Let’s face it, you’re not getting any younger. And neither are your parents. At this point, they’re getting up there and you’re starting to worry about their finances and security. What will happen to them? What do you need to do to make sure they have a plan in place for their finances? It can be tough to think about but taking action now and having a conversation now can help everyone. Here’s how to help your elderly parents to get their finances and care in order.
Have the conversation
The first thing you need to do to help your elderly parents is to have the conversation with them about the future. It can be awkward but it’s necessary to protect them and help you. You can sit them down and say you want to talk about the future and have a plan “if anything were to happen.” You don’t want to make it sound like they’re going to die tomorrow but the truth is that none of us know when you’re going to.
You can also say, “I’m thinking of my financial future and how I want my assets to be used if something were to happen with me. I want to make sure your money goes where you want it. Do you have a plan in place?”
You want to see if they have:
Health Care proxy
Power of attorney
All of these things can ensure that their money they worked so hard for goes to the right place and their wishes are respected. It can also make everything easier without all the legal trouble.
Life insurance will ensure that if someone dies, the survivors are left with a sum of money and are taken care of financially. This is especially important if someone is the breadwinner or sole income earner.
Naming beneficiaries is important because it designates who will get any of the remaining assets. A will can outline the wishes that someone has and can provide a guide on what to do with assets and everything else so there’s no confusion.
A health care proxy is a document that names someone to act on the behalf of someone else, when it comes to medical decisions in the event they are unable to take care of themselves. So if something were to happen where your parents were no longer able to care for themselves, you could make health decisions on their behalf. Naming a power of attorney is similar but that names someone to manage general affairs if someone is unable to manage their own.
Get your paperwork in order
Once you have the conversation, you’ll have a better idea of what you still need. They might not have ever thought about this and have nothing and you need to get all your paperwork in order.
You also want to make sure they list a beneficiary on their 401(k) and other financial accounts. A beneficiary is someone who will get the funds when the account holder dies.
Though it can be difficult, you also want to get an idea about where your parents are at financially. Do they still owe on the mortgage? If so, how much? Do they have credit card debt or remaining student loans? Do they have investments in multiple places? Knowing all of this can help you understand the big picture.
To start getting your paperwork in order, create a folder where there is a will, a list of beneficiaries, a list of passwords for financial accounts, account numbers for bank and investment accounts and more. You can then keep this in a fireproof safe or somewhere else that is secure.
Choose the right financial products
A part of estate planning and preparing for the future is choosing the right financial products. For example, you will want to consider:
Life insurance, which can provide a lump sum of money to beneficiaries and pay for the burial and other costs.
Disability insurance, in the event of injury.
Long-term care insurance, which could help cover costs associated with elder care
You may not need all of the above as it can depend on your situation, but do your research. Be sure to look at the rates, vet the companies, and choose a plan that will provide the coverage you need for your family. How much coverage to get will depend on your family finances such as earning, expenses, etc.
So for a life insurance policy, you’d want to get coverage to ensure that the beneficiaries getting that money would not face financial hardship in the event of the death. Using that money, they’d be able to take care of the burial and survive with the loss of income.
It’s always a sensitive topic when bringing up stuff like this with your parents. But if you want to help your elderly parents and make sure they’re taken care of — and that you don’t have to deal with a mess upon their death — getting things in order now can be a lifesaver.