How To Discuss About Finances With Your Aging Parents
Money is a sensitive subject for many people, but understanding your parents’ financial resources is critical as you consider their long-term care. It’s also worth remembering that inquiring about your parents’ finances can feel like a breach of privacy.
8 measures to help parents manage their finances and long-term care
To have fruitful conversations regarding your parents’ financial resources and wishes as they age, follow Ash’s advice.
1. Think about your parents’ perspective towards finances.
“The older generations are notoriously private about their finances,” Ash explains. “Generally speaking, baby boomers are more open.”
Recognize that your parents’ generational and cultural perspectives on money may differ from your own. Being aware of their point of view is a good start.
2. Consider your family’s parent-child relationships.
Consider whether one of your siblings would be better equipped to speak with your parents about their finances. Parents may feel more at ease chatting with their eldest child or a child whom they believe is better at money management.
3. Begin by explaining why you’re bringing it up.
Make it clear what you want. Make it clear to your parents that you want to talk about money because you’re concerned about their health or want to make financial plans for the future.
“You may say things like, ‘My hope is that we won’t need to utilize this information for a long time, but if you do, we want to be able to follow your preferences,'” Ash explains.
4. Find out what your aging parents value the most.
“Most individuals are significantly more interested in talking about what matters to them and how they’ll be cared for initially,”adds Ash
Inquire about their own experiences caring for aging parents. Do they foresee a similar scenario?
This is a good moment to talk about your aging parents’ health and your family’s medical history. What would be the optimal sort of assistance if they ever needed assistance managing activities of daily life or their health needs? Have they worked in a senior living community before? What are their thoughts on the situation?
5. Find out how much their plans will cost you.
Once you’ve figured out what your parents want in the long run, look into elder care prices. If they wish to stay in their current houses, they should check into home care costs together. If assisted living is an option, they should research the cost of assisted living in their state. Do they seem to be forgetting things? If this is the case, you should discuss memory care costs with your parents.
6. Discuss financial resources to help them achieve their goals.
Now that you know what kind of care your parents desire as they age and how much it will cost, it’s time to look into their financial resources.
“It may be quite straightforward to shift into asking your parents about their finances if you’ve started by talking about what’s essential,”Ash says
You might want to consider the following questions:
Are you working with a financial advisor? Many financial advisors require their clients to sign a paper authorizing them to disclose information, which may also include the situations under which financial information should be shared and with whom.
- Do you have a investment or retirement plan?
- Do you have long-term care or life insurance?
- Where are your crucial legal documents?
- Do you have a will in place?
- Do you have a power of attorney that will last for a long time?
7. Look into lesser-known options for paying for senior housing.
Investigating strategies to reduce elder care expenditures before they become necessary could provide elderly parents and their family peace of mind. If your parent is a veteran, learn about the VA’s long-term care benefits. If they own their house, a reverse mortgage may be able to help them get the money they need. Life insurance can sometimes be used to help pay for long-term care.
8. Determine whether your parents expect you to make a financial contribution.
According to Ash, some people’s ultimate ambition is to spend their last dollar on their deathbed. If they are faced with unexpected long-term care costs, they may decide to enroll in Medicaid or move in with their children. However, the vast majority of people want to pay for long-term care if they can, and they don’t want to burden their families.
However, if it is your parents’ expectation, knowing now can help you prepare.
“I’ve only had one client family out of 300 say they want to go with ‘the Medicaid plan’ or move in with their children,”Ash says
Why is it important to start discussing now to avoid regrets in long-term care financial planning?
The most common mistake people make, according to Ash, is not making financial arrangements for long-term care needs.
“Everyone,” she argues, “needs a strategy.” “We’re all getting older; scientists haven’t yet devised a means for us to live indefinitely.” Many people require assistance. Not everyone requires a top-of-the-line solution, but having a partial answer is preferable than having none.”
Some elderly parents may have given considerable attention to their future plans and finances. Others may deny that they need to think about their finances or future at all. You won’t know unless you start talking about your parents’ priorities and the financial resources available to assist them.
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