Are Your Parent’s Finances in Order?

August 25, 2011

By Heather Compton

The Slow Slide

Elderly Parent and FinancesThe slow slide begins; I’m seeing it in my own life and I don’t like it one bit. I now have to ask my adult sons to open the pickle jar and thread the sewing machine, I prefer that they drive if we are out together in the evening; and they take my arm on icy sidewalks. Did I mention that I don’t like it one bit?

It gives me greater understanding and patience when dealing with my own mother and her reluctance to move into a supported care facility, give up her driver’s license and use a cane for walking and support while in the shower. The list goes on – it’s not so easy to get to the bank anymore or call in the prescriptions and put on the support hose.

Our parents need our help but as adult children we must tread carefully to demonstrate that we value their independence and balance that with our concern for their safety and need for support.

5 Important Financial Questions to Ask Your Parent

It always begins with ‘the talk’ which is invariably an awkward conversation and one we would all rather avoid – the discomfort is ageless. At this life stage the talk focuses on your parent’s important health and financial paperwork while they still have their marbles and a degree of health.

U.S. website Caring.com lists the “5 Most Important Financial Questions to Ask Your Parent”.

  1. Do you have a power of attorney?
  2. Have you updated your will, insurance, and retirement account information recently?
  3. Do you have plans or insurance in place to pay for long-term care if it’s needed?
  4. Who is advising you?
  5. Where is all this stuff?

All great questions and a great starting place but likely just the beginning!

Taking the Reins

In an article published here in November 2010 I talked about Estate Planning and the three key documents all of us, including our aging parents, need to have in place. Even if Mom and Dad want you to take responsibility for their financial life and healthcare decisions your hands will be tied unless you are named as their representative. The folks need an updated Will plus Powers of Attorney for Property and for Personal Care.

What is a POA?
A Power of Attorney is a legal document signed by your parent. This document gives another person (the representative or attorney) the power and authority to act on the parent’s behalf. It’s important to be clear what power and authority you hold as their representative.

Generally, the representative can do anything the parent can do, except make a will or give away their assets. You must always act diligently and in good faith in the parent’s best interests. That means your personal preferences must be put aside if they conflict with what your parent may believe or want.

Representative liability
Exercise caution and common sense. As representative you may be liable for damages resulting from not carrying out your duties and responsibilities. If you fail to maintain a particular standard of care or interfere with the Will, then you may have to compensate your parent, or possibly the beneficiaries of the estate.

Your Aging Parents

Financial and legal concerns are often top of mind but those of us in the “sandwich generation” are looking for answers and direction on any number of issues from physical and mental health concerns, living arrangements and costs, and relationship frictions with siblings. A great source of practical information from a Canadian perspective is “Your Aging Parents: How to Prepare How to Cope” by Maureen Osis, Judy Worrell and Dianne McDermid (ISBN978-0-9810825-5-4).

I feel blessed each day that Mom is with us and fortunate to have such a positive role model of courage, adaptability and resiliency. I’m especially grateful for her willingness to plan ahead and openly discuss her challenges and concerns. Now where are those boys? I can’t get the darn pickle jar open!

About the Authors: Heather Compton has presented seminars on financial and retirement lifestyle issues for over 30 years. She retired as Vice President and Senior Investment Advisor with a major financial services company. Heather and husband Dennis Blas co-present retirement seminars for a variety of corporate clients and are the co-authors of Retirement Rocks! Canadian Boomers Invest in Life. You can find their book online or in independent bookstores. See more of their advice at Retirement Rocks.

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