The Important Financial To-Do When Your Parents Get Older

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What to do when your parents get olderThis is a guest post from Holly Johnson for the blog Get Rich Slowly. Holly is a 32-year-old wife, mother of two, and frugal lifestyle enthusiast. She blogs about saving money, frugal habits, and whatever is on her mind at ClubThrifty.com.

There are few occasions in life that anyone dreads more than the death of one of our parents. After all, our parents gave us life. They most often raised us. As most of us grew and had our own children, our parents became grandparents.

We have watched them age and grow … and no matter what we say, or do, or wish…one day they will die. It’s inevitable and there is nothing that anyone can do to change this unfortunate fact of life.

Still, there are steps that we can take now in order to make this unavoidable event easier. Planning ahead can lighten the burden when the time comes. Being prepared and knowing what the next steps will be can give a person peace of mind and security. Having a plan can reduce the incredible stress you may be under when the time comes.

Working in a mortuary has helped me to see planning ahead can truly make this unfortunate experience easier to digest. While it may be a difficult conversation to have, it is important to talk to your parents about their wishes. Having this conversation can prevent surprises from arising when the time comes. I cannot tell you how many times I have seen a family scramble to put together the pieces of their parent’s finances, all while trying to grieve their loved one.

The truth is that failing to be prepared for a parent’s death can create a lot of unneeded stress and grief when you are the least equipped to deal with it. Make things easier by finding out some details ahead of time. Although you don’t need to know everything, here are some things that every child should know as their parents age.

How are your parents’ finances?

While you don’t need to bust out a balance sheet or know every last detail about your parents’ finances, you need to have a general idea of the state of their financial health. For instance, you need to know whether or not their house is paid for. If not, you need to know approximately how much they owe and when it will be paid off. Have they signed up for a reverse mortgage? Have they taken out any additional loans not including the house? Do they have any other debt? These are all important details as their estate may be liable for the debts after their death.

Furthermore, you will want to know whether or not your parents are financially equipped to pay for their health care as they age. Often times, elderly people will need to stay in nursing facilities, either for rehabilitation after a surgery or permanently as they become unable to take care of themselves. Do your parents have the ability to pay for this long-term care? Do they have enough cash to cover their expenses? Better yet, do they have long-term care insurance?

Finally, in the event of their death, you’ll need to know whether or not they have life insurance. If so, you will need to know where the policies are located. At the very least, you will need to know the name of the insurance company and the policy number. Also, you will need to know if the policy is current, has a loan against it, or has lapsed. These are all important details and can save you a lot of hassle and grief if you know about them before they are needed.

  • http://twitter.com/SpfldHistorian Barbara Shaffer

    Asking outright for such specific information is likely to get you no answers.  Approach it with them from a helpful point of view. Try suggesting to Dad that if something happened to him, you want to be able to take care of Mom.  Tell Mom that if something happened to her, you want to be able to take care of Dad.  You need them to help you prepare for such an event and that means that, at the very least, they need to put together the binder mentioned above and tell you where it can be accessed in the event it is needed.  By the way, if you mention long term care, they are likely to run for the hills.  
    Although the lack of the above information can create nightmares for you, it’s crucial to use a lot of tact in getting people to share it.  Maybe, just maybe, if they have insufficient funds for their funerals, we as their offspring ought to consider paying for them ourselves.