It’s often a shocking moment when you realize your parents, who taught you much of what you know and guided you to adulthood, now need your help. This role reversal can leave you responsible for your parents or the estate they leave behind. If their affairs aren’t in order, it’ll be up to you to take care of the details in an already-stressful time.
Even if your parents are currently mentally and physically capable, now is the time for you to step in and make sure they are prepared for the latter years of their lives. Here are some legal and financial considerations where advanced planning can make a world of difference for everyone involved.
Is Their Will Up To Date?
How many times have you heard a story in the news about a celebrity who died without a will and left their relatives and business partners with a raucous legal battle? Case in point: Almost 40 years after his death, the family of Jimi Hendrix was still going to court to fight it out.
While you may consider your family above such squabbles, it’s better not to test that assumption. You never know how large amounts of money will affect people and their behavior. It is important for your parents to have a will that spells out their final wishes, including who will carry out those wishes as the executor of their estate.
This is especially important in situations with blended families. It’s all too common for someone to neglect to update their will and leave an ex-wife or ex-husband as the sole inheritor or executor of an estate. Not only do your parents need a will, but they also need to make sure it is updated to reflect their current situation and desired legacy.
The importance of double-checking beneficiary designations goes beyond just a will. Make sure your parents have gone through all of their accounts, including life insurance policies, retirement accounts, and other savings and verified that their listed beneficiaries are correct.
Have You Had The Long-Term Care Conversation?
If your mom is over 65, there’s a 58% chance that she will need long-term care at some point, and on average that would be about 2½ years of care. For your dad, there’s a 47% chance that he will need long-term care. (1) Those numbers are high and need to be taken seriously.
Your whole family needs to come together to develop a plan for caring for your parents when the time comes. Discuss topics such as: Who will provide care for them? Who will pay for the care? Does it make sense for them to purchase long-term care insurance?
All too often, the most responsible or local son or daughter ends up shouldering the entire burden. This leads to burnout and resentment toward the other siblings. Save your family the trouble and proactively come up with a plan that everyone can agree on.
Who Will Be Responsible?
One out of three Americans over age 85 has Alzheimer’s disease. (2) There’s a good chance that a time will come when at least one of your parents is no longer able to make decisions for himself or herself. Who is going to make decisions for them at that point, both financial and medical?
While this can be an uncomfortable conversation, don’t avoid it. This is something you need to discuss with your parents and get the proper legal documents in place before they become incapacitated. Having simple powers of attorney written up will save you the trouble of going to court to request the right to help your parents when they need it most. And if your parents are comfortable with it, it would be a good idea to have one or more of their kids added to a bill-paying account. This way, if an emergency situation arises, they can access cash reserves to pay bills and debt payments immediately instead of waiting for assets to be released or legal documents to be enacted.
Have You Invested In Your Relationship?
While it is important to have all of the proper legal documents in place and have a plan for how to take care of your parents when they can no longer take care of themselves, for most people, their biggest regret is simply that they didn’t make the most of their time with their parents.
We all know that our time here on earth is limited, so we need to spend it investing in those we love. As you watch your parents age, it’s a visual reminder that your time with them is coming to an end. Consider creating a routine to make sure you spend time with them frequently while you still can. Can you make a standing date for breakfast on Fridays or a phone call on Sunday afternoons? Carving time out of your busy schedule for your parents is one of the very best ways to prepare for these final years of their lives.
You Don’t Have To Do This Alone
It can be overwhelming to think about writing a will, planning care, and making these critical decisions, especially with all the emotions involved. Sometimes parents aren’t receptive to these discussions with their kids, the kids who at one time needed them to take care of their every need.
In these situations, it can be incredibly helpful to work with an experienced financial professional, someone who knows the ins and outs of latter-year planning and can be a neutral third party in emotional family discussions. If you would like help planning for your parents’ future, HFG Wealth Management is here for you. Call 832-585-0110, email info@hfgwm.com, or contact us online to request a complimentary consultation.
About HFG Wealth Management
HFG Wealth Management, LLC is an independent financial planning and wealth advisory firm serving individuals, families, and business owners in The Woodlands, Beaumont and the Port Arthur area, and nationwide. HFG is committed to building meaningful relationships with clients that seek to span time and generations, helping clients live the lives they desire while also helping achieve their financial goals. Founder and CEO Larry A. Harvey, ChFC, with 35 years of experience and leading a team of experienced financial planning and support professionals, takes a highly personalized approach to financial guidance. HFG Wealth Management has integrated the complexity of financial life planning and investment management services into a customized wealth management offering. HFG is committed to keeping clients balanced, yet seeks to be flexible in response to constantly changing market conditions, all while providing ongoing support to help clients maintain a disciplined approach to realizing their financial objectives. To learn more about HFG Wealth Management, connect with them on LinkedIn.
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(1) https://www.morningstar.com/articles/879494/75-mustknow-statistics-about-longterm-care-2018-ed.html
(2) https://www.alz.org/media/documents/alzheimers-facts-and-figures-2019-r.pdf
