By Nicole Louvar, AIF®
Parents are supposed to take care of their children, not the other way around. But as we age, so do our parents. All of a sudden, we may find ourselves in the role of caretaker. This role reversal can be challenging and oftentimes emotional. Taking on this role comes with many responsibilities, for which you may not be prepared. Having a plan in place before they reach that point can help ease the burden, especially during a stressful time of transition. Following the tips below can help you get started in the right direction when creating a financial plan for your aging parents.
1. Get a Will in Place
How many times have you heard a story in the news about a celebrity who died without a will and left their relatives and business partners with a raucous legal battle? Case in point: The battle over Jimi Hendrix’s estate continues to this day (more than 50 years later!) all because he had no will.
While you may consider your family above such squabbles, it’s better not to test that assumption. You never know how large amounts of money will affect people and their behavior. Your parents need to have a will that spells out their final wishes, including who will carry out those wishes as the executor of their estate.
This is especially important in situations with blended families. It’s all too common for someone to neglect to update their will and leave an ex-wife or ex-husband as the sole inheritor or executor of an estate. Not only do your parents need a will, but they also need to make sure it is updated to reflect their current situation and desired legacy.
The importance of double-checking beneficiary designations goes beyond just a will. Make sure your parents have gone through all of their accounts, including life insurance policies, retirement accounts, and other savings, and verified that their listed beneficiaries are correct.
2. Discuss Long-Term Care Needs
If your parents are over 65, there’s a 70% chance they’ll need some sort of long-term care services in their lifetime. That’s a high possibility that should be taken seriously.
Your whole family needs to come together to develop a plan for caring for your parents when the time comes. Discuss topics such as: Who will provide care for them? Who will pay for the care? Does it make sense for them to purchase long-term care insurance?
All too often, the most responsible or local son or daughter ends up shouldering the entire burden. This leads to burnout and resentment toward the other siblings. Save your family the trouble and proactively come up with a plan that everyone can agree on.
3. Assign Roles and Responsibilities
Approximately one in nine people age 65 and older are living with Alzheimer’s. There’s a chance that a time will come when at least one of your parents is no longer able to make decisions for himself or herself. Who is going to make decisions for them at that point, both financial and medical?
While this can be an uncomfortable conversation, don’t avoid it. This is something you need to discuss with your parents and get the proper legal documents in place before they become incapacitated. Having simple powers of attorney written up will save you the trouble of going to court to request the right to help your parents when they need it most. And if your parents are comfortable with it, it would be a good idea to have one or more of their kids added to a bill-paying account. This way, if an emergency arises, they can access cash reserves to pay bills and debt payments immediately instead of waiting for assets to be released or legal documents to be enacted.
4. Make Time for Relationships
While it is important to have all of the proper legal documents in place and have a plan for how to take care of your parents when they can no longer take care of themselves, for most people, their biggest regret is simply that they didn’t make the most of their time with their parents.
We all know that our time here on earth is limited, so we need to spend it investing in those we love. As you watch your parents age, it’s a visual reminder that your time with them is coming to an end. Consider creating a routine to make sure you spend time with them frequently while you still can. Can you make a standing date for breakfast on Fridays or a phone call on Sunday afternoons? Carving time out of your busy schedule for your parents is one of the very best ways to prepare for these final years of their lives.
5. Partner With a Professional
Attempting to manage your parents’ financial situation on your own can feel overwhelming with all the decisions to make and various family opinions to contend with. Parents may also not be receptive to these difficult conversations with their children and the role reversal they find themselves in. This is where the help of an experienced financial advisor can make a world of difference. Someone knowledgeable and skilled in helping families make important decisions about such things as wills, retirement, and estate planning can be a great asset in these sensitive situations.
This is where we can help. At Guided Capital Wealth Management, we utilize our proprietary process, The Paradigm FORMula, to help you create a dynamic plan that can help you reach your financial potential and keep you on track toward achieving your goals. Schedule a FIT meeting by contacting us at (832) 975-0711 or by email at email@example.com to learn if we are the right people to guide you on your financial journey.
Nicole Louvar entered the field of financial services in 2000 in a highly specialized role as a commodities trader. She implemented buying and selling strategies for large companies in fast-paced environments. Using her corporate experience and degree in finance, she became Chief Operating Officer for Capital Wealth, a company she founded with her husband, Kyle, in 2018. With her extensive background overseeing business plans and executing trading, it was natural for her to step into the role of creating financial plans for clients. Inspired by her work to help clients reach new milestones, Nicole has now added the role of Financial Advisor to her list of accomplishments. Her passion lies in working with women and helping them become more actively involved in and educated about their finances. Because she spends quality time getting to know her clients, her customized financial plans fit everyone’s unique goals and are supported by sound investment models.
Nicole graduated from New Mexico State University in 1999 with a degree in finance. She currently serves on the NMSU Foundation Board. She and her husband, Kyle, have two daughters who love to play sports. She enjoys volunteering for her girls’ sports teams and at their school. In her free time Nicole loves to cook, travel, and play golf with her family.