You may have trouble talking to your aging parent about his or her finances. Maybe your parent is secretive about his or her money, so you procrastinate the discussion year after year. But if you wait too long to have this conversation, your parent may end up in a crisis and you will have no idea what his or her wishes are, let alone the location of any important documents.
It is important to bring up this topic with your aging parent while being reassuring. Here are some essential financial topics you should broach with your aging parent.
1. Health care
Figure out if your parent has Medicaid, Medicare or any other health insurance and what the plans cover. You should also ask about any future plans for at-home or nursing home care. Additionally, determine if your parent has any coverage for long-term care.
2. Estate planning
Does your parent have an estate plan? If so, what documents are in place? According to Fidelity, you should talk about the following legal documents with your parent:
- A will
- Power of attorney
- A health care directive
- Beneficiary designations
You should also figure out if your parent has any gifting strategies to avoid probate and ensure the right people get certain assets.
3. Income and expenses
It will give you peace of mind to have an idea of the financial situation your parent is in. Do you have a clear picture of his or her income, debts or expenses? If not, you should inquire about them and ask for records. You can help your parent keep financial records, including tax returns and bank account statements.
Getting over the awkwardness and stopping procrastination will give you much more peace of mind. Make sure you offer reassurance throughout the discussions. If you have any siblings or relatives who share concerns, stay transparent in any dealings with finances to avoid potential estate litigation in the future.