Your parents have always taken care of you. So when you reach a stage in life where you need to take care of them, it can be a shock. This role reversal often leaves you responsible for your parents or the estate they leave behind, and if they don’t have a plan, the negative consequences of not having things in order will fall on you, not them.
Even if your parents are currently mentally and physically capable, it is time for you to step in and make sure they are prepared for the latter years of their lives. Here are some legal and financial considerations where advanced planning can make a world of difference for everyone involved.
Do They Have An Updated Will?
There is always some story in the news about a celebrity who has died without a will and the raucous legal battle that ensues as their relatives and business partners vie for a piece of their estate. Almost 40 years after his death, the family of Jimi Hendrix was still going to court to fight it out.
While you may consider your family above such squabbles, it’s better not to test that assumption. You never know how large amounts of money will affect people and their behavior. It is important for your parents to have a will that spells out their final wishes, including who will carry out those wishes as the executor of their estate.
This is especially important in situations with blended families. It’s all too common for a will to never be updated and leave an ex-wife as the sole inheritor or executor of an estate. Not only do your parents need a will, but they also need to make sure it is updated to reflect their current situation and desired legacy.
The importance of double-checking beneficiary designations goes beyond just a will. Make sure your parents have gone through all of their accounts, including life insurance policies, retirement accounts, and other savings and verified that their listed beneficiaries are correct.
Have They Thought About Long-Term Care?
If your mom is over 65, there’s a 58% chance that she will need long-term care at some point, and on average that would be about 2½ years of care. For your dad, there’s a 47% chance that he will need long-term care. (1) Those numbers are high and need to be taken seriously.
Your whole family needs to come together to develop a plan for caring for your parents in old age. Discuss topics such as: Who will provide care for them? Who will pay for the care? Does it make sense for them to purchase long-term care insurance?
All too often, the most responsible or only local son or daughter ends up shouldering the entire burden. This leads to burnout and resentment toward the other siblings. Save your family the trouble and be proactive to come up with a plan that everyone can agree on.
Who Will Be Responsible?
One out of three Americans over age 85 has Alzheimer’s disease. (2) There’s a good chance that a time will come when at least one of your parents is no longer able to make decisions for himself or herself. Who is going to make decisions for them at that point, both financial and medical?
While this can be an uncomfortable conversation, don’t avoid it. This is something you need to discuss with your parents and get the proper legal documents in place before they become incapacitated. Having simple power of attorneys written up will save you the trouble of going to court to request the right to help your parents when they need it most. And if your parents are comfortable with it, it would be worth it to have one or more of their kids added to a bill paying account. This way, if an emergency situation arises, they can access cash reserves to pay bills and debt payments immediately instead of waiting for assets to be released or legal documents to be enacted.
Have You Invested In Your Relationship?
While it is important to have all of the proper legal documents in place and have a plan for how to take care of your parents when they can no longer take care of themselves, for most people, their biggest regret at the end is simply that they didn’t have more time with their parents.
We all know that our time here on earth is limited, so we need to make the most of it. As you watch your parents age, it is a visual reminder that your time with them is coming to an end. Consider creating a routine to make sure you spend time with them frequently while you still can.
Can you make a standing date for breakfast on Fridays or a phone call on Sunday afternoons? Carving time out of your busy schedule for your parents is one of the very best ways to prepare for these final years of their lives.
You’re Not Alone
It can be overwhelming to think about writing a will, planning care, and making these critical decisions, especially with all the emotions involved. Sometimes parents aren’t receptive to these discussions with their kids, the kids who used to spit up on them and needed them to take care of their every need.
In these situations, it can be very helpful to work with an experienced financial professional, someone who knows the ins and outs of latter-year planning and can be a neutral third party in emotional family discussions. If you would like help planning for your parents’ future, contact Haydel, Biel & Associates at (626) 529-8347 or email Ricky directly at firstname.lastname@example.org.
About Haydel, Biel & Associates
Haydel, Biel & Associates is an independent financial advisory firm serving individuals and families near Pasadena, California. The firm was founded in 2004 by Chris Haydel and Ricky Biel with a desire to provide unbiased, client-centered, community-based financial advice. Together, they have built a practice that has grown into a family of caring, smart professionals committed to blending proven investment methodologies with creative financial technologies that make it easier than ever to accomplish your goals. They strive to keep things simple and fun to give their clients peace of mind and alleviate financial stress. HBA Wealth takes care of their clients’ needs first and foremost and goes the extra mile to make their clients’ finances grow. To meet and see how the HBA Wealth team may be able to help, contact them today at (626) 529-8347 or email Ricky directly at email@example.com.