Your parent is getting on in age, but you don't have a clear idea if there is a plan in place for their care. It is a difficult topic to broach; no one wants to talk about death and the financial realities that come with aging. Instead of having a proactive conversation early in a parent’s aging process, most families have a reactive discussion under high levels of stress and emotions while their parent is experiencing an adverse health event. According to PBS, 85 percent of decisions about long-term care are made during a health crisis.
The message is clear, be proactive.
Start these points to discuss with your aging parent.
Prepare Yourself
Your parent will feel more comfortable and at ease if you have processed your feelings before talking to them. Conduct research so that you are knowledgeable enough to present a clear and concise set of options for your parent. Having options allows your parent and family to make decisions and feel in control of the process. You are seeking progress, not perfection. It may not all become settled in one conversation, but the price of silence about your parent's plan may be very costly to you.
Review Documents
Two of the most critical personal legal documents are a durable power of attorney (DPOA) and a healthcare proxy. All older adults should have these documents as it gives legal authority to a designated representative to make financial, legal, and health care decisions on your parent’s behalf. If your parent does not have a DPOA and becomes incapacitated, you will have to go to court to get appointed as your parent's guardian which can be a complicated legal process at a time when your energy is better spent in the care and decision making for your parent. If they do not have a DPOA and health care proxy in place make arrangements for them to meet with a trusted elder law attorney to properly draft the legal documents.
Often a parent will have a will, retirement account information, and insurance policies that have not been revisited or updated in years, sometimes decades. Have your parents recently reviewed the beneficiaries for their accounts and policies? Family circumstances change, and the birth of a child, death, or divorce can affect how your parent may want beneficiaries designated. It is best to review financial and insurance data annually with your parent and make adjustments if necessary. For instance, if the parents have grown children, they may want to reduce their life insurance coverage to reduce annual premiums.
Long-Term Care Plan
Address the issue of long-term care. According to the PBS, a full 70 percent of all seniors will need some long-term care as they age. Even if your parent is healthy today odds are they will require long-term care and the costs are staggering. Some life insurance companies will add a long-term care rider to an existing policy. Medicaid also can cover some long-term care costs, but neither standard health insurance nor Medicare will cover your parent's long-term care expenses.
Meet the Team
Ask your parent about their financial advisors and request a brief introduction to them. Find out who they are and how you might contact them in the event your parent is unable to do so. This information will allow you to keep an eye on your parent’s accounts and be confident the advisors are trusted, objective, and well versed in elder financial issues. Oversight by you in a slightly detached way provides your parent's privacy and independence about their finances but allows you to protect them from unscrupulous advisors.
Understand Filing System
The last thing to discuss is the location of vital information so that you know where to quickly find important documents, online passwords, and forms of ID needed to care for your parents before a crisis arises. While you do not have to see all the specific contents of the information, particularly the financials, knowing where they keep the data is critical in a crisis. Remember that as your parent ages they may start to change the location of the information. Check with them a couple of times a year to ensure the information is still in the same place and physically look to be sure it is. The best time to talk about your parent’s plan is when your parent is in good health.
Proactive planning is the best way to help your family as your parents age, so discussing these 5 key points with your aging parent can facilitate that process.
Contact our office today and schedule an appointment to discuss how we can help you and your family. Reach us at (207)848-5600 or check our CONTACT page for more ways to reach us.
