It’s not an easy conversation to have, since you have your own personal finance matters. But there’s another piece of your financial life to consider: your parents and their finances.
Here’s how it often goes: you don’t think you have to worry about Mom and Dad and their money situation, now that they’re both retired. But you never know, says Mic in a recent article, “You can’t afford to procrastinate on this one key money move,” just when a financially crippling health issue might arise. What would happen if one of your parents was diagnosed with Alzheimer’s and had to move into a nursing home? Are you and your siblings ready, if your parents should both die far earlier than expected?
Many of these issues stem from failing to have an important conversation. Follow these tips to have “the talk”, while your parents are still healthy and can help make a financial plan for the future.
It’s uncomfortable to talk to your folks about money, and you may feel that it’s none of your business. However, your parents’ finances can have a major impact on your future. You can expand the conversation, if your parents bring up money, like if your mom asks your opinion on buying a new car or an issue with a credit card. Use this opening to talk about their bigger financial picture. You can also begin with your own situation, such as speaking to an attorney about estate planning. Ask if your parents have a plan in place. You can also bring up new stories about how seniors are being targeted for scams, in order to broach the subject of how your parents are managing their money.
If your parents say they don’t want to talk about their finances with you, suggest that they visit a professional who can offer advice, such as an experienced estate planning and elder law attorney. He or she can address questions about nursing home care costs and can help parents make a legacy plan. Nursing home care is a critical issue to discuss, because 70% of people who reach age 65 will need long-term care for at least three years at a cost of thousands of dollars every month. While most folks know that Medicaid is a primary payer of long-term care services, it typically doesn’t cover these services.
There are also times when a parent who received Medicaid dies, and the child will find that their father had Medicaid. It’s not uncommon for Medicaid to put claim on a parent’s estate. The estate is subject to Medicaid recovery, much to the surprise of their children.
Be sure to focus on how your parents will benefit from having a conversation about money and planning for the future. If they don’t have a will or important estate planning documents in place, offer to help them identify an estate planning attorney who they will be comfortable with. If you have had your will and estate plan done recently, see if they’d be comfortable setting up an appointment with the same person. Try to keep the conversation loving and kind, and understand that it may take more than one discussion, until they feel comfortable enough to talk about this sensitive topic.
If your parents are getting older, it may be important to help them make sure their affairs are in order and up to date. If you are concerned your parent may have a future need to be in assisted living or long-term care, there is important planning you can do now to prepare for this likelihood. Please contact us today if you think your parents may be in need of some estate planning or long-term care planning.
Reference: Mic (July 5, 2017) “You can’t afford to procrastinate on this one key money move”