You shouldn’t wait to discuss finances with your aging parents, who may be in cognitive decline, according to financial experts. It will take time to gather all the information you need for a complete assessment of their finances, goals and wishes and any estate planning documents they already have. Asking your parents questions while they are younger, even still working, is the best time to begin.
The founder of Enduring Wealth Advisors, Ralph Bender, says, “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”.
What Topics Should You Discuss with Aging Parents?
Perhaps your parents are talking about downsizing, taking a long cruise, claiming Social Security benefits, or their friend is entering a long-term care facility. These situations provide optimal moments to address your parents’ future financial needs and ways you can help them plan. Planning is best in stages, from the least uncomfortable inquiries to the most. Questions may include but are not limited to:
- Where do your parents store their estate planning and financial documents? What do they own, and what do they owe?
- Ask for introductions to your parents’ various advisors. Being familiar with their estate attorney, financial consultants, insurance specialists, and more will make getting up to speed in a crisis moment much more manageable.
- Who are your parents’ medical professionals, including doctors, and how can you best contact them? Copy or create a current list of their prescriptions and find out what pharmacy they use and copy or create another list of their past surgeries and the doctors who performed them.
- Inquire about long-term care planning. What type of care do your parents 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 or assisted living community? Is their current financial situation secure enough to pursue the high cost of long-term care?
- What are your parents’ wishes regarding end-of-life care? Do they have advanced medical directives, such as a living will 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 parents’ desires.
- Do your parents want a funeral, and have they made those plans? Is there money to cover these expenses? Do they want to consider pre-planning by purchasing an irrevocable funeral trust?
How your parents responds to these inquiries will indicate their understanding of their financial situation. Suppose the answers they provide do not seem to map out their reality. In that case, you will need to carefully read through their most recent financial statements and other relevant documents to understand how to realistically help them.
When Should You Seek an Elder Law Attorney for Your Aging Parents?
If their financial situation is complex, it may be time to consider consolidating your parents’ assets with their financial advisor(s) and begin Medicaid planning with their elder law attorney to preserve assets in a trust. The sooner these assets are legally protected, the faster your parents can become eligible for federal assistance such as Medicaid and start the clock running on the five-year lookback rule for Chronic Care (nursing home) Medicaid benefits and two and one half year look back rule for Community Care (home) Medicaid benefits.
Your actions as their financial advocate permit you to mirror your parents’ values and preferences when guiding their financial decisions. Elder law attorneys often have a client consent to permitting attorney discussion among the adult children and your parents’ financial advisor(s). This is helpful to address the issue of clients exhibiting changes in behaviors and the expression of different desires from previously stated objectives.
Other relevant service providers such as your parents’ insurance company have similar “designation of representative” or “authorization to release information” forms that permit discussions about the parents’ account. Filling out these relevant forms provides needed access to data and lets you make more informed decisions.
The Importance of Establishing Financial Advocates for Aging Parents
If your parents do 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 parents’ 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 parents’ financial advisor
- Home and other property management
Starting these financial conversations and early planning will maximize your older parents’ independence 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 parents will experience the best outcomes possible. Please contact us today at (631) 686-6500 to discuss setting up a complimentary consultation for your parents.
