By Craig Childress, CFP®
Caring for aging parents can be a heavy responsibility that many may not feel prepared to handle. With the right plan in place, however, you can have confidence knowing their financial legacy is preserved even during time of transition. To help ease the burden during a potentially emotional season, we invite you to consider the following legal and financial matters when planning for your aging parents’ financial future.
1. Get That Will in Place!
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.
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. Start the Long-Term Care Conversation
If your parents are over 65, there’s a 70% chance they’ll need some sort of long-term care services in their lifetime. 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. Assign Roles and Responsibilities
Approximately one in nine people age 65 and older are living with Alzheimer’s. 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. Invest 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.
5. Enlist the Help of a Professional
With so many decisions to make and various family opinions to contend with, attempting to manage your parents’ financial situation on your own can feel overwhelming. Parents may also not be receptive to these difficult conversations with their children and the role reversal they find themselves in. This is where the help of an experienced financial planner can make a world of difference for everyone involved. Someone knowledgeable and skilled in helping families make important decisions about such things as wills, retirement, and estate planning can be a great asset in these sensitive situations.
At Oswego Wealth Advisors, our mission is to help remove financial uncertainty so you can spend more time enjoying what matters most to you. We put the needs of our clients first while upholding our fiduciary duties, and we would be honored to help you and your parents put an organized plan in place tailored to reflect their wishes at any age. If you would like help planning for your parents’ future, schedule an introductory phone call or reach out to us at 503-342-2249 or craig@oswegowealthadvisors.com.
About Craig
Craig Childress is Wealth Manager and a CERTIFIED FINANCIAL PLANNER™ professional at Oswego Wealth Advisors, an independent firm in Lake Oswego, Oregon, dedicated to helping their clients remove financial uncertainty so they can focus on what matters most. With over 35 years of experience, Craig employs a personal approach to help people find solutions to their financial needs and concerns, set goals, clarify their values, and design a plan that aligns their money with their values. He does everything with purpose and intention, and cares deeply about his clients and their families, desiring to equip and empower them to work toward financial freedom and a fulfilling life. As a Fiduciary, Craig puts his clients first, always, and provides transparent guidance that makes a significant difference in their lives. When he is not serving his clients, you can find Craig involved at River West Church, serving the community here and abroad through the Lake Oswego Rotary Club, reading, gardening, or playing his guitar. He loves spending time with his family, especially his wife, Terri, and their grown children. To learn more about Craig, connect with him on LinkedIn.
