Aging parents can be an extremely underrated stressor in life. On top of full-time jobs, raising families, and serving in the community, it can feel extra burdensome to care for aging parents. One of the things that could make it worse is not being on the same page with our parents about their finances. While this stage of life is never easy, understanding the financial situation of our parents can take off some of the sting towards caretaking.
Key Takeaways
- Proactively understanding your aging parents’ financial and care plans can significantly reduce future stress and ease the transition into caretaking responsibilities.
- Have early, honest conversations with your parents about their end-of-life care preferences to guide future decision-making.
- Secure and review key legal documents, including wills, trusts, durable powers of attorney, and living wills, to ensure your parents’ wishes are clearly documented and accessible when needed.
- Identify and simplify your parents’ financial accounts and income sources to ensure clarity, reduce confusion, and make future management easier.
- Caring for aging parents is challenging, but understanding their plans, organizing documents and finances, and maintaining flexibility can make the process more manageable and compassionate.
Reality is Different
You always hear that some parents want kids so the kids will take care of them when they are old. Well, that theme has a whole new meaning once you are the child actually living up to that request. So many people struggle with health and cognitive issues as they age. Then, the complicated financial world we live in today, with passwords and bank accounts, can magnify those issues and make it nearly impossible to live day-to-day. As a result, many adult children step in to help manage the “small things”.
The small things stage may be the most important. There are no best practices to take over the small things, and sometimes, this stage is a brief luxury that quickly closes. Since that is the case, and since predicting the rate of declining parents is futile, there can be a lot of change and a lot of responsibility thrown onto the adult children. That learning curve can be extremely hard and could last longer than most people want to admit.
Trying to shorten or eliminate that learning curve can be one of the best things you can do now, before it is too late. You never know when a diagnosis will occur or when a fall will happen. But when it does, it would be much better if you knew what your parents’ plan is. Not just financially, but for health care, housing, help, etc. Among others, I think there are 5 main things that you could do today to help prepare for when that season comes.
#1: Understand The Plan
I have had too many meetings with clients who know next to nothing about their parents’ estate plan. Whether someone’s parents are in stage four or are still going to Florida every year, it is important to understand what the plan is. Do they have a will? Do they have a trust? Do they have a sense of what would happen if one parent passes away before the other? Are there professionals who helped them (an advisor, attorney, etc.)? If you do not know the answer to these questions, it may be easier to ask for understanding now, as opposed to after the health issues kick in. Seldom do I hear that elderly parents specifically do not want the kids to know. More times than not, it is just never asked or talked about.
#2: Talk About End-of-Life Care
In the process of understanding the plan, there are two main concepts: what are your wishes after you are gone, and what are your wishes while you are living. The earlier you can have the conversation about end-of-life care, the better. I don’t need to explain the difficulty of deciding whether (and when) to move a parent into a nursing home, for example. There will always be a lot of grey areas around caretaking for parents, but having the early conversations can provide you with a tremendous amount of comfort.
Asking now about nursing homes, or in-home care, or moving can give you a window into their wishes. Asking about hospital procedures, whether surgeries, medicines, etc., can be helpful. There may be situations down the road where you can’t fully live up to their wishes, but you will look back on this conversation and know you at least talked to them about it.
#3: Get The Documents (Or Create Them)
To the extent that you can, get access to the physical documents for the estate plan and end-of-life care. There should be a few basic but important documents that outline the plans.
First, find the will and/or trust. This should be the written version of what you heard from your parents in the previous two sections. Review everything to make sure it aligns with what your parents told you. If you need to, include an attorney or other professional if needed; many times, the legal writings can be confusing to read.
Second, if it is not already created, strongly consider creating a Durable Power of Attorney (POA) between you and your parents. Specifically, a well-crafted Durable POA can allow you to sign and act on their behalf, even if they are incapacitated. The durable nature is essentially designed specifically for declining health issues like Dementia.
Third, a Living Will should be the written document of your end-of-life care conversation. This is where the answers of “do not resuscitate” or “no extensive surgeries” will live. Having a written copy of their wishes with you can help when those hard decisions need to be made.
#4: Access and/or Understand Where the Money Is
Money is just a means for us to interact with the world. As a result, many people (us included) have used the same “money system” for decades. I can’t tell you how many times I have looked at someone’s financial plan, and when I ask why they have 4 or 5 bank accounts across different banks, the answer is “because that is just the way I have always done it”. Especially for elderly parents, they could literally still receive checks in the mail from multiple places. Again, to the extent that you can in their current stage of life, go through the mail and figure out where all the statements, checks, and bills are coming from. Work on consolidating as much as possible, whether that is setting up direct deposits or closing bank accounts, to make things as smooth as possible.
#5: Focus On Flexibility
Lastly, especially when the adult children take over the money, make an extreme effort to focus on flexibility for both your parents and your family. Many times, people are scared to spend their parents’ money for fear that it may run out, or that they are not allowed, or that their parents don’t need it, or that their other siblings will object. This will obviously depend on the current financial resources, as well as their wishes, but do not be afraid to spend money to make the small things better. Doing renovations to make their house more conducive to their life, or getting a better/safer car, or providing something to you to make caretaking easier, should be strongly considered.
Caretaking
At the end of the day, taking care of elderly parents is hard. No amount of money or planning will make it easy. Focusing on these five areas can ease the journey and help you manage the challenges. Understanding what the plan actually is and what your parents want is step one. Finding the documents and accounts and making sure that they match what they say is step two. Then build a flexible situation that works for you and your parents, to make the declines and the small things as bearable as possible.
TC Falkner 