I moved away from my parents home before I turned 18 years old. Whenever I would go back to visit, my mom would tell me “All our important papers are in that file cabinet.” I would nod but I never walked over to that file cabinet and opened the drawer to see what she thought was important. That file cabinet represented an event that I did not want to face; that my mom would no longer be able to handle her affairs.
I also never asked her any questions, such as “Where are your bank accounts? Do you have any investment accounts? Life insurance? A safety deposit box? Are your estate documents current? What are your wishes for your funeral?” It felt awkward, like I was excitedly anticipating her impending demise. However, death is inevitable and denying its existence will not stop it from occurring. Sometimes, before death occurs, there may be a period of incapacitation. Your parent(s) may be diagnosed with dementia or have a stroke and may be no longer be able to communicate with you. You will need to step in and act as your parents caretaker, physically and/or financially. Even though having “the conversation” is difficult, when the unthinkable occurs, you will wish you had.
I implore you to talk to your parents now. Ask the difficult questions. Open the drawer to where their important documents are and go through the papers with them. Make sure your parents have completed their Estate Documents (see Important Documents You NEED To Have In Place NOW!) and that they are up to date. Go to your parents’ bank with them. Give the bank a copy of the Financial Durable Power of Attorney. The bank’s legal department will look it over and let you know if the bank will accept it. The bank may have additional papers they would like filled out. If so, it is easier to take care of this while your parents are still competent and can sign their names. Is there a safety deposit box at the bank? Are you a signer on the box? Where are the keys kept?
Since you may be paying their bills while they are unable to, make a list of their financial activities. What is their income and where is it coming from? Do they have a pension? Is there a survivor option on the pension? Are they receiving dividend checks? If so, where is the investment held? What are their monthly expenses and how are they being paid? Are there automatic debits for the mortgage, car payment or other monthly bills? If your parents are still writing checks, where is the check book kept? Do they do online banking? Make a list of web sites and passwords that your parents use. Make a list of all their account numbers and the institutions contact information.
Go with them to see their Investment Adviser. Ask what plan the adviser has put in place to pay for an assisted living facility or nursing home. Ask where their assets are and how they are invested. Are Required Minimum Distributions automatically set up for retirement accounts? Give a copy of the Financial Durable Power of Attorney to the financial adviser to submit to the investment companies. Their legal department will be able to let you know if it will be accepted or if you need further documentation. Again, better to know this while your parents are still able to sign their name. Make sure that your parents beneficiary designations are up to date. I have seen several cases where an ex-spouse was left on as a beneficiary for life insurance, pension, or retirement accounts. This is often discovered after it is too late to make changes.
Planning ahead and seeking out the appropriate professional financial assistance on your parents behalf can ensure a less stressful situation when the time occurs. The best time to have “the conversation” is when your parents are competent and still self sufficient. Although it might be awkward, I believe that it will bring great comfort to both you and your parents. They will know that you understand their wants and that their wishes will be taken care of and you will be prepared if the responsibility of their financial, legal and health decisions should become your responsibility.
Written by Laurie Taylor and published with permission by www.findingassistedliving.com