We have touched on the issue of caring for ageing parents in the past, but we’re revisiting it again because – for many if not most of us – it remains an inescapable fact of life. In a recent issue of Time magazine, writer Christopher Mathews offered some invaluable insights about the six basic financial steps to take as our parents reach old age.
1) Have a financial plan of your own.
“The first thing an adult child needs to do is protect his own financial security,” says Joy Loverde, author of The Complete Eldercare Planner. She says that many people can run into serious financial difficulties while caring for their parents. Of course, children want to be there for mom and dad but it’s important to know your own financial capacity to help.
2) Open up the conversation, gently.
Getting your parents to be forthright with you about their financial situation can be very difficult. They have been the ones caring for you. Framing the conversation is important. Try this: “‘Hey, Dad, I’ve been thinking about my long-term financial stability and it looks like you’re doing well. How did you plan for this?’” This turns the issue around, in your favour.
3) Get help.
Dealing with ageing parents can be a source of acrimony between siblings. If you’re the adult child taking the lead, it’s important to involve your siblings early in the process. Bring professionals into the conversation – a doctor, lawyer and financial adviser that your parents already trust. This will help mitigate any qualms your parents have with being told what to do by their children.
4) Make it legal.
In case your parent’s health deteriorates quickly, documents like a durable power of attorney will allow a proxy to make financial decisions for your parents in case they become incapacitated. A living trust will allow a proxy to manage your parent’s estate under similar circumstances, and a will is necessary to dictate how your parents’ estate will be disposed of after they pass.
5) Simplify their financial life.
Many seniors are resistant to online banking, but showing your parents how to set up automatic bill payments will help them stay on top of their finances and allow you to monitor them. Many elderly Canadians have their financial assets spread among a range of financial institutions. Consolidate them if you can – you’ll be glad you did.
6) Take over gradually.
As you take a larger role in your parents’ finances, make the transition slowly. Give them autonomy where they can handle it. It’s important for your parents to maintain a sense of self-reliance. Position yourself as learning from your parents’ experiences. Make yourself seem like the one who needs help. That way they end up helping you help them.
