How to help your parents get financially organized
How can I help my parents get financially organized?
As we grow older, many of us may need to care for a parent. According to the National Alliance for Caregiving, caregivers increased from approximately 43.5 in 2015 to 53 million in 2020. Overwhelming, women are the primary caregivers (61% women vs. 39% men), and the average age of a caregiver is just 49
This means if you are a late-in-life mom like me, you may face the possibility of dealing with: kids at home or in college, retirement, and caring for parents at the same time.
For this reason, you can make an important financial decision to help your parents get financially organized. As a result of helping your parents, you get a clearer picture of your parent's financial situation.
Helping Your Parents Get Financially Organized = Helping Your Family Stay Financially Secure
Planning for future expenses is crucial to getting and staying financially secure. This includes knowing if your parents are and will continue to be financially able to care for themselves. The key to helping your parents get financially organized is to help them BEFORE there is a need.
I encourage you to take full advantage of this holiday season to start the conversation about finances, even if the only decision is to pick a date to discuss how to help them get financially organized.
Your parents may not be comfortable giving you their financial information. Let them know it's O.K. All you want is for you and your siblings to be in the best position to help them.
Heck, blame me. Say you read this blog that challenged you to ask your parents more questions about their finances.
Use the list below as a starting point to help your parents get financially organized:
Strategically pick which family member will talk to your parents about their finances
Gather your parent's healthcare information
Locate your parent's estate documents and other important documents
List all their financial information in one place
Ask your parents for a list of their emergency contacts
Get everything in one easy-to-access place
Strategically pick who will talk to your parents about their finances
Let's face it: There are family members that can get through to your parents, and there are family members who can't. Choose the family member your parents will most likely listen to about getting financially organized.
If your parents are resistant to talking with anyone in your family, consider hiring a financial planner to help your parents get financially organized. Some people may be more receptive to discussing finances with someone outside the family.
Think of it as similar to talking with your spouse. I can speak to my spouse about a topic for years. But he'll finally act on it when he hears the same information from someone else.
Get your parent's healthcare insurance information
Knowing your parent's healthcare information positions you to be their advocate if they need care or if they need to dispute a bill. You can also help them shop for the most cost-effective care.
If they're employed, ask them to get their healthcare information. They can print the information on their provider's or HR website.
Get a copy of any medical savings to plan they may have, like an FSA, HSA, and/or a medical savings plan benefits.
Print a copy of their specific Medicare plan. Medicare is an alphabet soup of various coverage options.
If you need help understanding healthcare insurance, read "3 Steps To Pick The Best Healthcare Plan For Your Family," which covers different types of healthcare insurance and medical saving plans.
As you gather their information remember to also ask for their online information like
Health insurance website addresses
User ids
Passwords
Customer service phone numbers
In addition, get your parent's medical providers' information and attend a visit if possible (I know this may still be a challenge). For example, my brother's random visit to our dad's doctor's appointment uncovered my dad never mentioned a cancer diagnosis.
Locate your parent's estate plan documents and other important documents
An estate plan is a set of documents that spells out what you want to be done with you, the things you own, and the people you love if you cannot make a decision or die.
Knowing where your parents put these documents can save you time, money, and a lot of heartache.
The basic estate planning documents are as follows (names of documents may vary depending on your state):
Will
A document that states what happens to the things they own when they die.
Healthcare directive
A written document that states your parent's medical decision choices.
Healthcare power of attorney
States the person, your parents, chose to make medical decisions on their behalf if they cannot.
Durable Power of Attorney
The person, your parents, chose to make financial decisions on their behalf.
The following are parts of an estate plan some people may have:
A Do-not-resuscitate (DNR) order
A DNR is a document that tells healthcare providers not to perform various cardiac life support activities if their parents' heart stops or they stop breathing.
A physician's orders for life-sustaining treatment (POLST)
A document beyond a DNR order includes not allowing other life-support-saving activities- intubation, feeding tubes, etc.
Trust
A document that states who gets your parent's assets if they pass away. A trust can also state who controls your parent's assets if they are incapacitated. Someone can also use a trust to decide how their beneficiaries can use inherited assets.
If your parents do not have an estate plan, encourage them to work with an estate planning attorney to create a plan. Your workplace pre-paid legal plan, if available, may extend services to your parents.
Ask your parents where they store their estate documents if they have an estate plan. Get the contact information for the attorney who created the estate plan. If they did their estate document online, get their userid and password.
Other important documents:
Although not technically estate documents, knowing where your parents store the following documents is essential.
Proof of prior military service like a DD214 (for military service after 1/1/1950)
Birth Certificates
Marriage Certificates
Divorce Decrees
Citizenship Records
List of your parent's financial information
Reviewing parents' information will help you know if they are and will remain financially stable. Reviewing their information will also help you catch any red flags of fraud or abuse or a warning sign that your parents can no longer care for themselves.
Names of their financial advisor, tax adviser, insurance agent, etc., basically anyone who helps them or manages any areas of their finances.
Banking information, including website URL, user id, and passwords
Investment account information, including website URL, user id, and passwords
Retirement Plan (401k, 403b, etc) contact information-account numbers, phone number, etc.
IRA (Individual Retirement Account (Arrangement)) Information
Pension contact information-account numbers, phone numbers, etc.
List your parents' sources of income, such as their social security benefits, pension benefits, etc.
Life insurance policies (check to make sure the policy is current)
Long-term care insurance policies
Ask for them to write down the location of safety deposit boxes and keys
Create a list of their properties and gather their deeds
Ask your parents for a list of their emergency contacts
Ask your parents for a list of people they want you to contact if they have an emergency. The list of contacts may include:
Employers/Employees
Clergy
Neighbors
Friends
Family members
Get everything in one easy-to-access place
Once you've tracked down the information, the next step is organizing it so you and your parents can access it. You can do this in several ways:
If you're lucky enough to have parents who already organized their information, at least know where it's located so you can easily find it.
I'm a binder girl, so consider getting a large binder, creating sections for health, estate, finance, and emergency contact, and putting the information in document protectors.
You can also buy a fire-safe file cabinet or portable file box and store the information in the file box or fireproof safe
Another option is to scan the information and store it virtually as an encrypted file online. Businesses such as Everplans , The Torch and LawSafe , Cake , Good Trust, and MyLife&Wishes offer online document storing services.
If your parents are adamant about not sharing information, at least see if they can meet you halfway by letting you know where to go to at least get the information if needed. For instance, they may have a safe deposit box with all the information. Or, they tell a close relative, get that relative's name, and verify they know where everything is located.
In conclusion
As someone who's lost relatives, I can tell you it's frustrating having to dig through your loved one's paperwork to piece together the information you need. You also will prevent yourself from getting ugly surprises, like the one my husband got after his father passed away when he learned my father-in-law never renewed his life insurance policy.
Start with a conversation about ensuring that you are in the best position to help them when needed. You can pick a section and slowly gather your parents' financial information or email your parents a link to this blog. Taking these steps now will go a long way to helping you maintain your financial security if you need to take care of your parents.
