Planning for Elder Care: What Boomers Should Know for their Parents and Kids

Money is often a taboo subject in our society. We don’t like talking about money, and we certainly don’t want to talk to our parents or our kids about the intricate details of our finances. However, this is an issue that you will likely need to tackle in the coming years.

Many Baby Boomers are part of the so-called “sandwich generation.” Chances are that you are going to be caught between helping your aging parents and helping your adult children with costs like college attendance. Not only that, but as you age, you will need to talk to your children about your expectations for your financial future. As you plan for elder care, there are a few things to keep in mind:

COMMUNICATION

In all things related to money, communication is key. This is especially true as you begin to address the thorny issue of elder care for your aging parents. Your parents have long prided themselves on their financial and physical independence. The idea that you may need to step in to help arrange elder care, and help manage finances, is distressing.

One of the best things you can do is approach the subject slowly. If possible, begin talking about the future and money early on so that your parents can begin adjusting to the idea of discussing finances and different elder care options with you. Let your parents know that you care about them, and that you are most interested in carrying out their wishes, so you want to know what their plans are.

If time allows, you and your siblings can gradually become a part of your parents’ long-term financial planning. This is important because you don’t want to be caught unprepared in the event of a sudden health or financial crisis (or both). Start immediately to begin working on these issues together, and you and your family will know what to do when the time comes.

This communication is important with your own children as well. It’s not fun to recognize that your own days may be numbered, but you need to be realistic. Talk to your own children about your finances, and your wishes for long-term care. Start thinking about your long-term care options, and what you need to do to prepare your finances for the future. Then, communicate your desires with your adult children so that everyone is on the same page.

Now that you are in regular communication about finances and wishes, it’s time to review estate planning and financial documents. Some of the items of importance include: 

  • All personal information: This is including Social Security numbers, date of birth, and other records. While you don’t need to know all of this information right now, you should know where it is kept. Find out where your parents keep their Social Security cards, birth certificates, military records, and other important personal records. Consider moving this information to a fireproof/waterproof safe after making digital copies for backup in an encrypted file on your computer or stored in the cloud.
  • Medical history: You need access to your parents’ medical histories. This is especially important if your parents have health care directives and other special instructions. Be aware of whether or not your parents want extraordinary measures taken to save their lives, and whether or not they are organ donors.
  • Contact information and messages for others: Find out about important contact information related to your parents. This includes contact information for their health care providers, brokerages, financial advisors, tax preparers, close friends, relatives, and anyone else who might need to know about major decisions related to elder care. You should also find out if your parents have special messages, tokens of affection, or pictures to be sent to others.
  • Accounts and passwords: You should know what accounts your parents have, as well as the associated passwords. From email to online banking to social media, find out what the accounts and passwords are. Like personal records, these should be kept in a secure place.
  • Insurance and estate planning: You should have an idea of insurance and estate planning documents and plans. Know where the paperwork is kept for life insurance policies. Likewise, know about trust documents and wills. All of these documents should be kept in a safe place after being digitally scanned.
  • Property: Find out what property your parents have. This includes bank accounts, investment accounts (including retirement accounts), real estate, businesses, bonds, and any other property. Gather proof of ownership and other documentation for proper storage.
  • Debt: Ask your parents for debt information. If your aging parents have a reverse mortgage on the home, this is information you need, since it will affect the estate upon death, or if your parents have to move into a long-term care facility. Find out about credit card debt, investment margin, and any other debts that might be extent.
  • Funeral arrangements: Finally, discuss your parents’ preferred funeral arrangements. Have they already bought a cemetery plot? Do they prefer cremation? Perhaps they want a small memorial rather than a full funeral. This is not an easy subject to talk about, but it needs to be addressed.

Don’t forget that all of this applies to you as well. After you’ve had this talk with your parents, it’s time to sit down and have this talk with your children. Let them know where to find your important documents, and give them an outline of your wishes.

Many of the above items should also be regularly reviewed. Estate planning documents should be reviewed at least every three years, and property holdings should be reviewed every year, along with updated account information and health information. Remember that sometimes you need to make changes to your documents and accounts.

INFORMATION

Beneficiary information trumps estate documents every time, so when you review your trusts and wills, also check your retirement account and insurance beneficiaries. If you need to change beneficiaries, do so immediately. Your life insurance policy and retirement account proceeds will be paid out to the beneficiaries — no matter who is listed in your will.

It’s important to consider different methods of financial management. This is especially important if you have siblings. Simply adding someone to a parent’s account usually isn’t the best plan. You might decide that it’s easiest to just add your brother as a joint checking account holder, but all that means is that he has equal right to the money as your parent. He can, effectively, do what he wants with the money.

Consider that reality when you are planning your own future. Would you want one of your kids to be considered to have equal right to your money? Your wishes might not be honored.

Sit down with an estate planning attorney to work out a better method of financial management. Trusts and other vehicles are available that allow caregivers and others to help effectively manage financial matters without going against the wishes of parents. In many cases, it makes sense to restructure the financial workings so that your entire family is involved in a way that makes sense with your parents’ wishes.

This is where communication is especially important. Your parents’ wishes need to be known to your siblings as well, so that everyone is on the same page.

It’s important to consider different methods of financial management. This is especially important if you have siblings. Simply adding someone to a parent’s account usually isn’t the best plan. You might decide that it’s easiest to just add your brother as a joint checking account holder, but all that means is that he has equal right to the money as your parent. He can, effectively, do what he wants with the money.

Consider that reality when you are planning your own future. Would you want one of your kids to be considered to have equal right to your money? Your wishes might not be honored.

Sit down with an estate planning attorney to work out a better method of financial management. Trusts and other vehicles are available that allow caregivers and others to help effectively manage financial matters without going against the wishes of parents. In many cases, it makes sense to restructure the financial workings so that your entire family is involved in a way that makes sense with your parents’ wishes.

This is where communication is especially important. Your parents’ wishes need to be known to your siblings as well, so that everyone is on the same page.

investing for retirement ebook ipad - McClain Lovejoy
investing for retirement ebook ipad - McClain Lovejoy
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