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If you have your parents during much of
your adult life, consider yourself
fortunate. As they age, however, you
will need to become increasingly aware
of added responsibilities you may have
to assume. And by planning ahead, you
can help make everyone's lives easier.
In dealing with various
matters relating to your parents –
particularly financial matters – the key
is open and frequent communication. That
means you'll need to find out everything
you can about your parents' assets,
debts and estate plans.
You can start by finding out
if your parents have a simple will drawn
up. If they don't, urge them to get one.
Your parents have worked hard all their
lives and they want their assets
distributed according to their wishes
instead of a court's decree, which is
what would happen if they die "intestate"
(without a will). Even if your parents
have a simple will, they may still need
to take further action. If you think
they have a sizable estate or want to
give significant gifts to charitable
groups, encourage them to consult with
an attorney who specializes in estate
planning.
You'll also need to learn
whatever you can about your parents'
savings and investments. Which banks and
financial service providers hold your
parents' assets? Where are the records
of these accounts? Do they work with a
financial advisor? You'll need to learn
these things in case your parents become
incapacitated or die unexpectedly. State
treasurer's offices regularly advertise
"unclaimed" property, including
investments, some of which have simply
eluded the attention of family members.
Speaking of incapacitation,
you may want to encourage your parents
to create a durable general power of
attorney, which allows them to appoint
another person to conduct their business
affairs if they are physically or
mentally unable to manage them yourself.
You can also ease some potential worries
by having your parents create a medical
power of attorney, which empowers you
(or another relative or close friend) to
make health care decisions for your
parents if they get seriously injured or
become ill and cannot make health care
decisions on their own.
Long-term care is another
subject you might want to discuss with
your parents. Of course, they may never
need to enter a nursing home or require
the services of a home health care
worker. However, if they do, the
expenses can be enormous. For example,
the average annual cost of a private
room in a nursing home is more than
$75,000, according to the 2006 annual
MetLife Market Survey of Nursing Home
and Home Care.
If your parents needed to
come up with this type of money, it
could wipe out their financial
independence and possibly place a burden
on you or your siblings. Currently,
Medicaid pays almost half the costs of
long-term care, but, to qualify for this
government program, your parents would
have to "spend down" almost all their
assets, an unattractive prospect.
Consequently, you may want to talk to
your parents about other ways of paying
for these costs.
Start discussing these types
of issues with your parents soon. As you
can see, there's a lot of ground to
cover, and the sooner you start, the
better. |
