There are now more than 70 million Baby Boomers in the U.S. Yet, millions of adult children may not be prepared to make important decisions about their parents’ future because of a lack of knowledge about their parents’ finances.
While people in their 40s and 50s learned much about money from their parents, now the roles are becoming reversed. Adult children should know where their parents’ finances stand in case of any emergency. Speaking to aging parents about their finances isn’t easy.
9 important questions you may want to discuss with your parents
Do You Have a Financial Plan (and Will It Be Enough)?
Find out if your parents have a financial plan and a financial adviser. Some parents will have a solid financial plan that will enable them to live comfortably into their 80s or 90s.
You may learn they are living on a fixed budget and money is tight. Any decision to provide them with financial support will likely have an impact on your own financial plan.
Do You Keep a List of All Your Accounts Handy?
Ask your parents to put together a list of their financial assets and those people designated as beneficiaries of those accounts. Keep this information in a safe place.
Where’s Your Will, and Am I the Executor?
It’s important to know if you may have a role in the estate plan and what it means. Find out where your parents keep their will and estate documents and the attorney who has the latest version.
One item that is not commonly listed in the will that you may want to ask about is if your parents have prepaid for a burial plot or memorial arrangements.
Any Life Insurance I Should Know About?
Find out if your parents have any active life insurance policies, which company has issued the policy and the policy number.
If your parents are still working, they may have life insurance through an employer rather than owning a policy individually.
Do You Have Any Special Bequests to Family and Friends?
Family heirlooms and special personal property may have a prominent place in your parents’ estate plan, as well as for you and your siblings.
Having these conversations soon can help prevent any disagreements during a difficult time.
Who Is Your Financial Power of Attorney?
This document is a staple of any estate plan, allowing your parents to name a primary and secondary person to make financial decisions on their behalf if they become incapacitated.
If you are named as the person to make financial decisions, find out where all of your parents:
- Financial assets are held
- Medicare policy
- Pensions and Social Security benefits
Are You All Set with a Living Will? What Are Your Wishes for Medical Care?
Your parents should have an Advance Health Care Directive or Living Will and Health Care Power of Attorney.
These documents convey which adult child can make medical decisions on behalf of a parent if they became incapacitated or terminally ill.
Have You Forgotten Bills or Had Trouble Balancing Your Checkbook Lately?
A discussion of key financial decisions with your parents while they are in good health is recommended.
This will enable everyone to make a plan if your parents start to show signs of memory loss.
Do You Have a Long-Term Care Policy?
These are insurance policies that provide a monetary benefit for assisted living or skilled nursing care.
To claim benefits, a person typically needs to be unable to perform two out of six common “Activities of Daily Living”
or have a severe cognitive disorder.
Discussing your parents’ financial and estate plans is not easy and may be uncomfortable, but it will help give both you and your parents some peace of mind to know that they will be provided for and things will be taken care of in their absence.
Special thanks to content contributor: Patricia Sklar and Kiplinger.com
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