After my father passed away last year, my mother asked me to go over her finances and help update her financial affairs. I was lucky. My mother is the bookkeeper in the family and knew where everything was kept. We mainly had to update beneficiaries and power-of-attorney documents. Fortunately my mother is in good financial shape and I will be actively involved in monitoring her investments and financial matters from now on.
This would not have been so easy had my mother lost her cognitive abilities. Baby boomers are starting to reach age 65, which means their parents are in their 80s. Studies show that the median age for people needing skilled care is age 82. Will you be ready to step in to help with your parents with their finances when they can no longer handle them on their own?
It is not an easy topic to discuss for a lot of families. My father did not discuss finances openly with me even though I’m a financial planner by profession. You should find out where they keep their financial information – wills, powers-of-attorney, insurance policies, etc. What provisions have been made if they can no longer manage their financial affairs? Don’t forget medical information. They should have a medical power-of-attorney so the family can have access to information should they need to make decisions for a parent that is incapacitated. A living will or advanced healthcare directive should also be in place to name a surrogate for making medical decisions.
Finally, you need to keep watch for warning signs that your parents are having problems. The elderly are frequent targets for financial scams. One way to ease into financial involvement is to get copies of their bank statements sent to you. Watch for unusual payments or late fees that may signal financial affairs may be slipping.