How To Handle Your Parents Finances
Posted By :US News and World Report
Posted At : Tuesday, Sep 28, 2010
HOW TO HANDLE YOUR PARENTS FINANCES
Sourced from US News and World Report
1. Be Gentle and remember the Golden Rule
a. Treat your parents with the respect and dignity that you would want someone addressing you about your finances
2. Start the conversation early
a. The sooner you can broach the subject, the easier your parents can begin organizing before you need to intercede on their behalf
3. Take the time to organize your own finances
a. The fortunes of aging parents must also be a consideration in their children’s retirement plans and should be factored in when the younger generation is deciding how to allocate assets.
4. Take action in the area of long term health care
a. 40 percent of people over age 65 will spend time in a nursing home, and the costs can be substantial. A recent survey by Genworth Financial shows the national average median monthly cost for a private room in an assisted-living facility is $2,825.
5. Think past retirement: both yours and theirs
a. another good first step in planning for the future of several generations is rethinking the way many Americans plan for their retirement. That means it’s not just thinking in terms of how you’ll make it to the end of your working life, but how aging in the entire family might play out.
6. Get organized
a. Organizing aging parents’ finances may be as important as deciding how to manage them. Knowing where investments, insurance policies, wills, and other key documents are located (plus any associated PIN numbers or passwords for online accounts) is still an often overlooked step in the process. A basic checklist-a will, trusts, medical power of attorney, durable power of attorney, making a personal data checklist for each parent that outlines debt, income, and tax and medical histories. Documents included in these lists should be updated every four to five years,
b. Check in with parents regularly. If a crisis like a death or an incapacitating illness does strike before those plans can be made and a parent is incapacitated, look for assets listed on old tax returns (although they won’t include documentation for life insurance and other types of policies).
7. Get Professional Help
a. When in doubt, look for an attorney, CPA or financial advisor that specializes in estate planning and gerontology financial advising.