Do you know if your parents have a will? If anyone is trying to sell them an annuity? If they are paying all of their bills? If you answered no to these questions, it may be time to have a conversation with them. You may be groaning right now – who enjoys talking about money? – but doing this can help ensure your parents’ well-being.

Many of us struggle to meet our monthly obligations, especially seniors, who often face diminished retirement savings and high medical costs. Ask your parents if they have been unable to pay any bills or purchase essential expenses, like medicine or food. If so, help them explore ways they can revise their budget. Are there any expenses that can be cut or reduced, like cable or dining out? Is there any way to increase their income, such as through a part-time job or reverse mortgage?

Encourage your parents to contact the creditors/service providers for any bill they are struggling to pay. (If preferred, you may be able to talk to them yourself with your parents’ permission.) Many creditors offer hardship programs – short-term arrangements that allow you to make smaller payments. Utility companies frequently have payment assistance programs for limited-income customers.

For aging parents suffering from memory problems, bills may go unpaid simply because they forget. Handling the bill-paying yourself is one possibility, but if you do not have the time, you may find it helpful to use the services of a daily money manager. Daily money managers assist with financial tasks, such as opening and paying bills, balancing checkbooks, and organizing and filling out paperwork. Professional daily money managers charge a fee for their services, but low-income seniors may be eligible for free assistance through a volunteer program. (You can contact your local Area Agency on Aging for more information.) Of course, since there is the potential for abuse, you should choose a daily money manager carefully and periodically check up on his or her work.

Long-term care costs
Sometime in the future, your parents will likely reach the point where they are no longer able to live on their own without help. Unless you or a relative plans to care for them, they will have to pay for nursing-home, assisted-living, or in-home care. It is not unusual for long-term care costs to exceed $50,000 a year, and Medicare and Medicaid only cover them in limited circumstances.

If your parents do not already have a plan for financing their long-term care, help them create one. Putting aside a set sum each month can help your parents amass a good chunk of change, but if they do not already have a significant amount of savings, it may be difficult to save enough now to completely cover their costs. Besides saving, another option is to purchase long-term care insurance. Many policies cover both nursing-home and in-home care costs. The best time to purchase this insurance is when you are in your 50s or 60s. Since there are many different provisions to consider, you and your parents may want to talk with a qualified insurance advisor about what would best meet their needs. Long-term care insurance is expensive, so it can be tempting to go with whoever offers the cheapest policy, but avoid purchasing one from a company with questionable financial health.

Unfortunately, there are many people out there looking to take advantage of others, and seniors are a popular target. If someone is trying to sell your parents an annuity, timeshare, or other investment opportunity, review it in detail to see if it would make sense financially. (It probably won’t.) Explain to your parents why you think it is not a good investment. If they are getting calls from telemarketers, sign them up on the National Do Not Call Registry ( or 888-382-1222). Discuss common scams, such as the promise of lottery winnings if you send a check for taxes, and encourage them to talk to you before sending money to someone.

Estate planning
The majority of Americans don’t have a will. No one wants to think about death, but having a will ensures your property goes who you want it to go to and reduces the likelihood of conflict breaking out between surviving relatives. If you are not sure if your parents have one, ask. Those with more complicated financial situations may want to have their will drafted by a lawyer, but others may be able to create one with the aid of a book or computer software.

Even if you know your parents have a will, you can talk to them about whether they feel it is up-to-date or if they want to make any changes. For example, if they left part of their estate to a sibling and he died, they may prefer now to leave their whole estate to their children. Also discuss if they have other estate planning documents, such as durable power of attorney for healthcare and finances.

Keep these in mind when talking to your parents.

1. If you disagree with something they are doing, try to calmly explain why. Avoid saying such things as, “How could you do something so stupid?”

2. If you have siblings, talk with your parents together. This will reduce the chances of family conflict occurring later on, and they could bring ideas to the table that you did not think of.

3. Respect your parents’ opinion. Let them know that you want to help them but are not trying to take away their independence.

4. Don’t be afraid to seek professional help. Most people aren’t experts on things like investments, wills, and insurance. Talking to a financial planner, lawyer, accountant, or other professional can ensure that you and your parents create a solid financial plan.

5. If your parents need to create a will or do anything else, set a specific deadline. This will discourage procrastination.

6. Looking for a way to initiate the conversation? Start by talking about your own finances. For example: “We met with a lawyer last week and created a will. Do you have one?”

7. Avoid trying to talk to your parents about their finances during a stressful or hectic time, like while you are in the middle of cooking Thanksgiving dinner.

8. Let your parents know that you want talk with them about their finances because you love them and want to ensure they are taken care of.

9. Emphasize the benefits of financial planning – being able to pay your bills now and in the future, ensuring that assets are passed on to the next generation and not drained, etc.

10. Don’t force your parents to talk about their finances if they are extremely resistant. They may be more open to discussing it at another time or with a professional.

The Everything Wills and Estate Planning Book (2nd edition)
By Deborah Layton (Adams Media 2009)

This book provides comprehensive information on the estate planning process for a fraction of the cost of a lawyer. You will learn about the sections and clauses of a will, how to sign it properly and amend it later if needed, and how the probate process works. Layton also reviews estate planning tools you can use to avoid the probate process, such as trusts, joint ownership, and life insurance. Other topics discussed include minimizing estate taxes and assigning durable power of attorney. The Everything Wills and Estate Planning Book is the perfect gift for parents who need to plan their estate. And if you have delayed planning too, you may want to buy a second copy for yourself.

Copyright © 2009 CCCS
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