What should I be doing to plan for my parents as they get older?
My parents are doing fine right now. I want to be prepared for future issues as they get older. Can you provide advice on how to be proactive when planning for your older loved one's future?
This is a great opportunity to be proactive. There are a couple essential documents to start with. The first two deal with incapacity: the power of attorney and advance health care directive. Each nominates a person or persons to handle your parents' financial and medical decisions during periods on incapacity. If your parents already have these documents, they should be updated every 5 years or so to ensure they are not outdated. I just reviewed a power of attorney that only went into effect upon incapacity and incapacity was defined by not one but two doctors and the children had to agree. Practically this would be difficult and could lead to delays. So it is important to review the terms.
The second two are a Will or a Trust and three documents would deal with a passing. Depending on what types of assets your parents own and other factors, one or the other might be more appropriate. It helps to discuss these options with an estate planning attorney.
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As I always ask "have you done your planning?" If you haven't done yours, then you can't expect your parents to do theirs. Lead by example. Show your mom and dad you Will, Trust and Powers of Attorney for financial and health care matters. Show them you have and are saving for your retirement. Then ask them what they have done? Then you can discuss what their unique financial picture can provide them if they need care in the future.
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I applaud you for being proactive! You are touching on multiple topics with this question. I reached out to a very special person, Chris Cooper to help answer this. Chris is the owner and founder of Chris Cooper & Company, a financial planning firm working with people who own small businesses, with persons preparing to retire, and very elderly persons. Chris provides counseling and guidance in the areas of investments, taxation, and estate preservation. As you can see he is perfect to answer this question.
Chris suggested that you start with your own preparation for getting older, then it will be easier to talk to your parents about theirs. First, take stock of where you are now; assets and liabilities, income from what sources, risk management tools such as insurance policies for life, health, Disability Income & Long Term Care, home, car, and liability, Wills, Trusts, Powers of Attorney for financial and health care matters. Then make an appointment to see a comprehensive fee only financial planner and an estate planning attorney.
As you are going through the process, you will see what things you think may be lacking in your parent’s planning, and then you get show them you are “all grown up” and are taking responsibility for your own aging, and wanted to ask Mom and Dad, “What planning have you done?”
Thank you Chris for answering this!
Chris Cooper MSFS, CFP®, EA
California Licensed Professional Fiduciary #615
4080 Centre Street, Suite 202
San Diego, CA 92103
VOICE: (800) 352-7674
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