Finances is one of those topics that many families avoid talking about. The stigma around talking about money can leave many wondering what to do as our parents get older. But financial experts agree that waiting to talk about finances with your aging parent is a mistake, especially if they are already experiencing cognitive decline or signs of dementia. It takes time to gather all the information you need to ensure your aging loved ones have their financial and estate planning in order. The best way to avoid surprise expenses down the road is to start having these difficult conversations now. Asking these questions while your parents are younger, even still working, is the best time to begin thinking about financial planning for aging parents.
Financial Planning For Aging Parents
Perhaps your parent is talking about downsizing, taking a long cruise, claiming Social Security benefits, or a friend of theirs is entering long-term care. These are situations that can provide an optimal moment to address their future financial needs and ways you can help them plan. Estate and financial planning for your future is best done in stages. You may want to talk to your aging parents about the following topics:
Where does your parent store their estate planning and financial documents? What do they own, and what do they owe?
Ask for introductions to your parent’s various advisors. Become familiar with the estate attorney, financial consultants, insurance specialists, and other specialists. The more you are tapped in, the easier it will be to manage a crisis quickly.
Who are your parent’s medical professionals, including doctors, and can you best contact them? Copy or create a current list of their prescriptions and find out what pharmacy they use.
Long-Term Care Planning
Inquire about long-term care planning. What type of care does your parent prefer if they need help with activities of daily living such as bathing, toileting, dressing? Do they want to remain in their home or move closer to family? Do they envision moving into a retirement community? Is their current financial situation secure enough to pursue the high cost of long-term care?
What are your parent’s wishes regarding end-of-life care, including estate planning documents such as advance medical directives; living will, power of attorney, and health care proxy? In a medical crisis, these documents will provide the legal right and medical guidance for you to make choices that reflect your parent’s desires.
Does your parent want a funeral, and have they made those plans? Is there money to cover the funeral expenses?
How your parent responds to these inquiries will indicate their understanding of their financial situation. What if their answers are incomplete or they do not seem to map out their reality? In that case, you will need to carefully read through their financial statements, estate planning documents, and other relevant documents to better understand their desires and how to realistically help them.
When To Seek an Elder Law Attorney for Your Aging Loved Ones
If your parents’ financial situation is complex, it may be time to consider consolidating their assets and begin Medicaid planning with their elder law attorney to conserve assets in a trust. The sooner these assets are legally protected, the faster your parent can become eligible for federal assistance and still protect their most important assets, such as their home. Many aging adults are concerned about the possibility of losing their home when faced with long-term healthcare, especially once Medicaid gets involved. We talk more about this in our blog titled: Medicaid, Long Term Healthcare, and Your Home.
An elder law attorney will be able to guide your parent and your family on next steps, including what forms to fill out and documents to sign before your aging parents start experiencing cognitive decline. If your parent is already showing signs of dementia, and you are concerned about possible elder abuse or worried about long-term care options, this would also be a good time to seek the guidance of an elder law attorney.
However, even before estate documents are needed and everyone is in good health, would be the best time to get those estate planning and financial planning documents in order. Know your plan and options before an emergency strikes, and everyone will be on the same page when something does happen. The founder of Enduring Wealth Advisors, Ralph Bender, explains, “Waiting until a senior’s decline is evident may already be too late. It would be best if you were talking to them about it while they’re still working because they’re still competent and still able to fund (long-term care) and pay the premiums from income”.
The Power of Financial Advocates for Aging Seniors
If your parent does not have a designated financial advocate, now is the time to select one. Usually, this person is a family member or trusted friend, bonded and insured, or at least under the oversight of a third-party professional. This advocate will assist with the parent’s primary financial responsibilities such as:
- Daily financial management
- Health insurance and other insurance policy management
- Investment and retirement income sources management in concert with the parent’s financial advisor
- Home and other property management
Starting these financial conversations and early planning will maximize your older parent’s independence, make their dollars stretch further, and provide them some peace of mind. When all involved parties understand and agree to the strategies, you will have streamlined the process and your loved one will experience the best outcome possible. To connect with an estate planning attorney for an aging loved one in your life, call Michaelson Law to schedule a consultation today. Our estate planning and elder law attorneys are ready to help your family with estate/financial planning documents and next steps if your loved one is already experiencing cognitive decline.