As your parents’ age, some issues and concerns arise. There are medical decisions to be made, care to facilitate and finances to be protected. Money and investments can be a delicate topic, and discussing final plans can be even more difficult. Let’s talk about some ways to protect your parent’s finances and give you both peace of mind.
Before any issues arise, while your parents are of sound mind, have a conversation about their finances, investments, and plans for the future. Consider these three documents when discussing plans for future finances.
- A health care proxy is a document that assigns trusted individuals with the power to make health care and life decisions if your parent is not able to do so. Having a healthcare proxy is a way to guarantee that healthcare decisions are followed through as decided. Not having a proxy can potentially add to hospital bills and unnecessary or unwanted financial responsibility.
- A durable financial power of attorney is a legal document that names a trusted person to take care of your parent’s finances if they are no longer able to do so on their own. With a durable financial power of attorney, you can give as much or as little authority as you wish.
- A will gives your parents the platform to determine how they want their assets distributed once they pass. Creating a will before health becomes an issue makes things clear and concise, giving you a roadmap to follow when the time comes.
Our parents are the ones that teach us and lead us through life, so talking to them about money can be especially tricky. Make sure when you approach your parents about making the decisions about their assets, you keep the conversation on the topic at hand – their wishes and what they want.
When talking about the details, you may want to decide if you or another family member will be a joint account holder on your parent’s accounts. While having a joint account can be beneficial, it also comes with drawbacks and should not be taken lightly. This article from Next Avenue gives some additional insight on this.
Ask for help
If you feel that you are in over your head, get a trust officer at a bank involved. Having a managed account at the bank assures that bills are getting paid and you are getting the assistance that you need. There may be a management fee required, so check with your bank. Having a neutral party involved will help alleviate some family issues.
Money will always be an emotional subject, so remember to approach your parents with kindness and respect and go at their pace. They may be willing to discuss everything at one time, or you may need to have multiple sittings. Either way, speak to them as one adult to another and be patient. It will make the whole situation much easier on all of you.