Helping Your Aging Parents With a Financial Plan

Helping Your Aging Parents With a Financial Plan

September 23, 2022
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As our parents age and we assist them with more and more of their day-to-day lives, there may come a day when that includes helping with financial matters as well. Having a plan in place can help ease the burden during a stressful time of transition—for both you and your parents. Keep in mind these 5 tips when assisting your parents with their financial and estate planning.

1. Finalize/Update the Will

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: The battle over Jimi Hendrix’s estate continues to this day (more than 50 years later!) all because he had no will. (1)

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. Your parents need 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. 

2. Talk About Long-Term Care 

If your parents are over 65, there’s a 70% chance they’ll need some sort of long-term care services in their lifetime. (2) That’s a high possibility that should 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.

3. Task Individuals With Roles and Responsibilities

Approximately one in nine people age 65 and older are living with Alzheimer’s. (3) There’s a 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.

4. Make Your Relationship a Priority

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.

5. Work With a Professional

Assisting your parents with their financial situation can be stressful, especially if your parents are not receptive to having these difficult conversations with their children and the role reversal they find themselves in. This is where partnering with an experienced financial advisor can make a world of difference for everyone involved. Having the expertise of an impartial financial professional who can help you make important decisions about such things as wills, retirement, and estate planning can be a great asset in these sensitive situations—and make things a bit more comfortable for everyone involved.

At Wilkinson Wealth Management, we provide advice tailored to your needs, so you can focus on what matters most. Whether preparing for retirement, planning for your family’s education, or adapting to major life changes, we serve as a trusted partner to help you figure out the path forward. If you would like help planning for your parents’ future, call 434-202-2521 or email susan.wilkinson@lpl.com to schedule an appointment.

About Susan

Susan Wilkinson is founder, president, and financial advisor at Wilkinson Wealth Management, a financial services firm in Charlottesville, Virginia, providing customized financial planning and strategies with a personal approach. With over 25 years of experience, she has a passion to come alongside her clients to help them fulfill their dreams and grow their wealth so they can be financially independent. Susan is known for listening to her clients, digging deep into their values, concerns, needs, and goals so she can build a financial plan tailored to their unique life. She prioritizes building long-term relationships with her clients and being the person they call when life throws a curveball or questions arise.

Susan is a CERTIFIED FINANCIAL PLANNER™ professional and has an MBA from Webster University and a Bachelor of Liberal Arts in Economics and Sociology from the University of Mary Washington. When she’s not serving clients, you can find Susan outside, either gardening, biking, or hiking. She’s a homebody at heart who loves music, especially playing the piano and cello. One of her favorite things to do is spend time with family, including her husband, Terry, her children, and her twin granddaughters, whom she affectionately (and appropriately) calls the “twinados.” To learn more about Susan, connect with her on LinkedIn.

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(1) https://www.guitarplayer.com/news/the-estates-of-jimi-hendrix-and-noel-redding-and-mitch-mitchell-are-suing-each-other-heres-whats-going-on#:~:text=The%20estates%20of%20all%20three,from%20streaming%20and%20digital%20media.

(2) https://acl.gov/ltc/basic-needs/how-much-care-will-you-need

(3) https://www.alz.org/alzheimers-dementia/facts-figures