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5 key questions to ask before helping your parents with their finances

By: Kimberly Lankford

As your parents get older, they may start to need help managing their finances. It can be uncomfortable to bring up the topic, but asking a few key questions ahead of time — even years before they need help — can make the conversation less intimidating, help you learn about their wishes, and give them more control over important financial decisions.

Ask where they keep key financial documents. Find out about their important paperwork, such as insurance policies, account information, wills and other documents so you can access them in an emergency. Ask if they have a health-care proxy, which designates someone to make medical decisions on their behalf if they can’t do so themselves, and a living will stating their wishes for end-of-life care. It can be easier to start the discussion if you have these important estate-planning documents yourself and can talk about your own decisions. Also ask where they keep contact information for any financial professionals they work with — such as their insurance agent, financial planner, accountant and attorney — who can be valuable resources if you eventually need to help them manage their finances. See Estate Planning at Different Life Stages for more information about important documents for you and your parents.

Start talking about where they’d like to live as they get older. Do they want to stay at home or would they like to move closer to family or live in an active retirement community? Knowing their wishes can help you work with them to prepare in advance and avoid having to scramble and make major decisions without their input in an emergency. If they would like to stay in their home, it can help to have a contractor who specializes in aging in place come for a consultation to see if they need renovations to make their home accessible as they get older and less mobile. You can search for members of the National Association of Home Builders who have an aging-in-place specialist certification at www.nahb.org/consumers.

Find out if they have long-term-care insurance or other policies to help pay for care. Long-term-care insurance can help cover the cost of care in a nursing home, assisted-living facility or in their own home. Many people don’t realize that their parents have long-term-care policies and that the coverage could start to pay out even if they need just a few hours of care each week in their home. Find out about the policy’s benefit triggers — most policies pay benefits if you need substantial assistance with at least two out of six activities of daily living (bathing, dressing, toileting, continence, eating or transferring) or if you have severe cognitive impairment and need substantial supervision. Also find out about any special requirements for caregivers to qualify (some policies require home-care workers to be licensed and work for an agency, for example) and see if the insurer offers resources to help you find caregivers or facilities in the area that meet the policy’s criteria. See Helping Your Parents With Long-Term Care Claims for more information.

Talk about resources in the community that can help your parents as they get older. The local Area Agency on Aging will have information about home-care agencies, senior centers, nursing homes, financial benefits for seniors, help for caregivers, and senior housing options. Most communities also have resources to help seniors live in their homes, such as transportation services, a meals-on-wheels program, or adult day-care centers. You can find local resources through the U.S. Administration on Aging’s Eldercare Locator. Also see the National Council on Aging’s BenefitsCheckup.org for information about financial resources that can help, such as patient assistance programs to help pay for prescription drugs, property tax relief programs for seniors, special benefits for veterans, and health-care assistance programs.

Find out more about their accounts and what to do if they eventually need help managing their money. Talk about steps that can make the bill-paying process easier, such as automating regular bills so they don’t have to worry about writing a check each month. As they start to need more help, you can talk with them about giving you read-only access to their accounts, so you can keep an eye on everything without them having to give up any control. Warn them about common financial scams that target seniors, such as calls claiming to be from the Social Security Administration or IRS and grandparent scams, where a crook claims to be a grandchild or other relative in an emergency and needs money (often in cash or a gift card). You can read about the newest scams to watch out for at the Federal Trade Commission’s Scam Alerts. You can also get them to start thinking about setting up a durable power of attorney, which can let them designate a trusted person to make financial decisions for them if they’re unable to do so themselves — and can help as they get older as well as if they need temporary help in an emergency. Some banks and brokerage firms require a separate power of attorney form even if you have already have a general power of attorney from a lawyer.

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