While this can be a difficult topic to broach, it’s important. You have to be open and honest with family members and tackle it head on. At some point, many of us will be in charge of our parents’ or elderly relatives’ caregiving and finances. We should be preparing our strategies now so we are ready when it happens.
1. When is it time to help?
Have you been considering taking over as a caregiver for a loved one, but you’re not sure if they are ready? There are a few simple things you can do to determine if it’s time. When you visit, check for unopened mail or undeposited checks lying around. These both become very common. This could be a sign that they are no longer able to go to the bank or may not understand why they should. Are everyday activities becoming difficult for them?Subscribe to Kiplinger’s Personal Finance
Be a smarter, better informed investor.Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail. Profit and prosper with the best of expert advice - straight to your e-mail.2. How to get the conversation started.
No matter when these discussions happen, they’re going to be difficult. But avoiding them altogether can lead to major problems down the road for you and your loved one. Start by coming up with a strategy — don’t go into this conversation without a plan. You don’t want to upset your loved one or make them uncomfortable.For many of us, discussing money is a very private issue. Reassure your loved one that this isn’t about taking over their finances, it’s to help set them up for future success.Think about who you want to be included in this conversation. Other family members? Any friends? It might be beneficial to have an outside perspective to help ease any tension or give any pieces of professional advice. If you can get help from a financial adviser or an attorney who can lead you in the right direction, that is a great start.
3. Where to begin?
After you have these conversations, it is now time to take a closer look at your aging loved one’s financial situation. This includes annual income, credit card debt and how much they receive in Social Security.
Make sure you have an understanding of their monthly expenses, how much money is coming in and how much is going out. How are they paying their bills? Are they automatic? Being paid online? Or are they using paper checks?They might have a life insurance policy that you don’t know about, and you don’t want them to lose those benefits because it stops being funded. Gathering all of these documents and putting them somewhere secure is key.
4. Important questions to ask.
Does your loved one have an estate plan? If not, they should. Many people think you have to be wealthy to have one, and that is not the case. Whether they are a multimillionaire or they have only a few bucks in the bank, they need an estate plan. I always recommend my clients find a good elder law attorney. They can collect the correct documents for you and your loved one, ensuring you are making the decisions, rather than the state, should they pass away.
You also want to choose a healthcare power of attorney. This is something you would ideally want to do before it’s too late so your loved one can pick that person on their own. This will ensure that you, or another family member, is legally empowered to view their medical records and decide where and how they are treated.
This is a critical part of an overall financial plan. You don't want something to happen to a loved one and be unable to legally decide for them even though you know their wishes.
Assessing the financial needs of a loved one will be easier with a good plan. Working with a financial adviser can help identify what needs to be done for your loved one and help reduce your out-of-pocket costs as a caregiver.Drake & Associates is an independent investment advisory firm registered with the U.S. Securities & Exchange Commission. This is prepared for informational purposes only. It does not address specific investment objectives, or the financial situation and the particular needs of any person who may view this report. Neither the information nor any opinion expressed is to be construed as solicitation to buy or sell a security of personalized investment, tax, or legal advice. The information cited is believed to be from reliable sources, Drake & Associates assumes no obligation to update this information, or to advise on further development relating to it. Past performance is not indicative of future results. Registration as an investment adviser does not imply a certain level of skill or training.
Related Content
- Is Your Estate Ready if You Experience Cognitive Decline?
- Caring for Your Aging Parents: A Seven-Step Guide
- Three Mistakes to Avoid in Retirement Tax Planning
- What to Discuss With Your Aging Parents as They Get Older
- Stages of Retirement: It’s Not Just About Your Savings
Disclaimer
-
Should You Pay Cash When You Downsize? Here Are Three Scenarios The proceeds from selling your current home have made it possible to pay cash for your retirement home, but should you skip the mortgage?
By Evan T. Beach, CFP®, AWMA® Published
-
Can’t Afford It? There’s No Shame in Saying So Trend of loud budgeting emphasizes being open about skipping unnecessary purchases and sticking to your budget, while older generations still struggle to talk about their finances.
By Neale Godfrey, Financial Literacy Expert Published
-
Can’t Afford It? There’s No Shame in Saying So Trend of loud budgeting emphasizes being open about skipping unnecessary purchases and sticking to your budget, while older generations still struggle to talk about their finances.
By Neale Godfrey, Financial Literacy Expert Published
-
How to Plan for Retirement’s Go-Go, Slow-Go and No-Go Years When retirement planning, it’s best to expect to do the big (and more expensive) stuff early on, when you’re healthier, then slow things down as you get older.
By Scott M. Dougan, RFC, Investment Adviser Published
-
How Life Insurance Can Help You Preserve Your Wealth Life insurance not only provides liquidity for your family to cover immediate expenses after you pass, but it also can minimize estate taxes.
By Justin Stivers, Esq. Published
-
Are Bonds Back? A Fresh Look at Fixed Income in 2024 With interest rates poised to possibly start falling, investors might consider shifting to longer-term fixed-income securities to lock in higher yields.
By Adam Lampe Published
-
Wealth Transfer Is About More Than Just Money Families have many forms of capital beyond their money. Here are five of them, plus ways to easily ‘transfer’ them to younger generations.
By Alex Kirby Published
-
Should You Enroll in Medicare if You Still Have a Job? This question is being asked more than ever these days, so here’s what you can do when it comes to making Medicare decisions while you’re still working.
By Jae W. Oh Published
-
Three Big Ways That Life Insurance Can Be a Lifeline Life insurance not only provides a safety net for loved ones and leaves behind a lasting legacy, but the cash value can also help during financial hardship.
By Steve Sugumele Published
-
Romance Scams That Target Older Adults Rising: What to Do Here are some tips to help you avoid falling for a scam, especially when a scammer tries to prey on your affection.
By Patrick M. Simasko, J.D. Published