Over the course of time, the caretaker roles of parents and children often reverse, especially if one or more parent experiences health problems. For example, an elderly parent may no longer be competent to handle his or her own affairs. This can raise sensitive financial and personal issues within the family.
The optimal approach is to discuss “eldercare planning” frankly and openly with your parents. Include siblings and anyone else who should be involved. Here are four practical suggestions.
- Move slowly. It is usually not necessary to cover everything in one or two sittings (unless the parties live far apart). In most cases, your relationship will not change overnight, but it will occur gradually.
- Be gentle. If you hit your parents with a barrage of information, they may be overwhelmed. Instead of opening up, the lines of communication can close. You might start by showing your parents a relevant clipping or post from an outside source. If you give them time to talk with friends, they will find out that there are others in the same position. That may soften their resistance.
- Show you have your parents’ best interests at heart. If they are like most elderly people, they will want to maintain their independence for as long as they can. You may be able to provide some options that allow them to keep some degree of control over their lives and finances.
- Ask the critical questions before taking action. This may include the following:
- Do you have a will, power of attorney, living will or similar document? Where is it located? Have you prepared a letter of instructions?
- Do you have life insurance, disability income insurance and long-term care insurance policies? Who are the insurers and how much is the coverage?
- Are you covered by a pension plan or other retirement plan? What about traditional and Roth IRAs? Who maintains them and what is the value? Who are the beneficiaries?
- Do you receive Social Security benefits? How much? Are you collecting on a spouse’s earnings history?
- Are you receiving income from other sources, such as annuities, stocks and bonds or certificates of deposit (CDs)? What are they and how much?
- What are your real estate investments? Is any property owned as a “life estate” where ownership ends at death?
- Do you have any other assets? What is their value and where are they located? How about bank accounts and safe deposit boxes?
- Have you already transferred some of your assets? Who did you give them to and how much?
Develop a plan that satisfies the main objectives while taking all the factors into account. For example, you may be able to shelter parents from the exorbitant cost of nursing home stays by having them transfer assets to a qualified trust within certain limitations.
Final words: Be aware that the laws can vary widely from state to state. Obtain expert professional assistance.