Welcome to our three-part series on a challenging and important topic – helping your aging parents navigate end-of-life planning. As financial planners, we understand the emotional and financial complexities involved. And just as we help many clients plan for major purchases, education costs, retirement income and other life goals, we also help them plan for care, safety, and end of life for their loved ones.
In Part 1, we cover the importance of certain conversations and provide you with a checklist of potential actions to consider.
All in the Family
In the United States, elder care is primarily provided by family members. Many of us will find ourselves in this situation at some point – a 2015 Pew Research study found that nearly one quarter of the U.S. population reported having a parent over the age of 65 who needed assistance with errands, finances, and personal care. About 79% of that assistance is provided by family, and only 13% is provided through custodial care nurses or nursing homes.
The Importance of a Will
When Aretha Franklin died intestate—without a legal will—in 2018, she joined a surprisingly long list of prominent people, including Prince, who did the same. By not preparing an estate plan, she complicated the task of settling her affairs for her survivors. This situation could have been avoided with a clear, legally binding will.
Why Have ‘The Talk’?
Conversations about end-of-life planning may not be easy, but they are also not as overwhelming as is often feared. Here are some concrete steps to get you started:
Establish and Communicate Roles and Responsibilities
Communicate as specifically as possible about roles and responsibilities, recognizing that they may change over time. Some families share responsibilities regarding aging parents, and some decide on a trusted person, such as a bank trust department or independent trustee, to help.
If a trusted person is used, be sure to let other family members know who that person is, and what responsibilities they are taking on. Encourage your parents to work with the trusted person and their family to help them monitor their personal, financial, and medical issues. It’s possible they might not need someone to fully take over their affairs in the beginning – or ever.
It’s also important to have conversations about what the rest of the family can do to help with specific duties and costs involved. When appropriate, you may wish to put agreements in writing to prevent misunderstandings that could cause family fights in the future.
Ensure Estate Planning Documents are in Place
Make sure your parents have a current durable power of attorney, a healthcare power of attorney, and a living will/advanced directive. These legal documents name a responsible member of the family, a friend, or other trusted person to make decisions during periods of incapacity. Keep them in an accessible location so they can be readily available in an emergency.
Other Essential Topics to Cover
- Financial Overview: Understand their financial situation, including income sources, assets, debts, and expenses. This knowledge will be invaluable in making sound financial decisions.
- Long-Term Care Insurance: Determine if your parents have long-term care insurance or other arrangements for potential assisted living needs.
- Funeral and Burial Plans: Know your parents’ preferences for their final arrangements, including whether plans have already been made and paid for ahead of time This information can ease the emotional and financial burden when the time comes.
- Digital Assets: Discuss what should happen to their digital accounts, such as social media, email, and online financial accounts. Make sure passwords are kept in a secure, known place.
In Part 2 of this series which we’ll share next week, we offer steps to help you and your parents plan for health care and staying safe at home.
Note: Planning for your aging parents has many aspects to consider depending on your family’s unique circumstances. If you have questions or would like to discuss your options, please reach out to professionals who can guide you, including an estate attorney and your financial planner.
