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Tag: Elderly Parents

How To Help Your Aging Parents With Their Finances

Written by support@seostats.com on . Posted in Budgeting & Money.

None of us want to admit it, but one day, our parents will be elderly (if they’re not already). And age brings unique challenges, including potential declines in physical and cognitive health. It’s hard to imagine, but the strong people who raised us may, one day, need help from us too.

So, what does this have to do with money management?

When parents age and experience cognitive decline, they usually need help organizing and keeping track of their finances. Without support, either from you or another trustworthy party, your parents may be at risk for overspending, missing payments, and falling prey to financial scams and elder abuse.

Recently, I sat down with Aaron D. Frishman, Of Counsel at Foster Garvey PC, with offices located on both the East Coast and in the Pacific Northwest, to talk about this sensitive topic. Practicing in New York, Oregon, Colorado, and soon in Washington State, Aaron regularly helps adult children and their aging parents put legal parameters in place to financially protect everyone involved.

As a financial advisor, I recognize the need for estate planning, and I work with expert attorneys, like Aaron, to ensure my clients take the next step in securing legal protection. In our conversation, Aaron offered key advice to help adult children protect their parents as they age and experience cognitive decline. Here’s what he had to say.

 

First, Recognize The Signs of Cognitive Decline

Pay close attention to your parents and watch for changes in behavior. According to the Cleveland Clinic, mild cognitive impair can start subtly and appear as:

  • Memory loss. Do they repeat questions? Do they regularly forget events or appointments? Do they misplace items, like keys and coats?
  • Issues communicating. Do they struggle to find the right words to say? Do they have trouble understanding what you’re saying?
  • Inability to pay attention. Are they easily distracted? Do they look away when you’re speaking? Do they quickly change topics of conversation?

I want to be clear. These are early signs of mild cognitive impair, but it’s important to be on the lookout for them because they can quickly escalate. The earlier you spot issues, the better off you and your parents can be. Early detection can give you time to prepare and engage with an attorney if you haven’t already done so.

Aaron also shared red flags that an elderly parent is experiencing cognitive decline and it’s impacting their finances. If you see any of these critical signs, address them right away. (I’ll explain how a little further down.)

Financial red flags can include:

  • Mail that’s piling up on the counter. Do you see unpaid or overdue bills? If so, your parent may be forgetting the responsibility of bill paying.
  • Difficulty signing their name. Have you noticed that your parent has trouble signing their name on checks? This is a potential sign of cognitive decline too.
  • Strange or unusual financial transactions. Has your parent taken out large ATM withdrawals, made unusual purchases, or written checks out to random people? Are there any other sudden and erratic changes to how your parents manage their money?

If you see any of these signs, it’s important to address them right away. You don’t want your parents to fall behind on bills or accumulate unnecessary debt.

 

If You See Signs Of Early Cognitive Decline, Talk With Your Parents Right Away 

This conversation can be really difficult, so it’s important to approach it carefully. Pick a time when both of you are in a cheerful mood and can focus. Then start by asking your mom or dad how they’re doing financially.

Frishman says, “It’s not always that easy, but it’s important to understand their perspective. If they don’t seem to understand you or even if they say things are fine, you can respond with, ‘I saw a few unpaid bills. Is everything going okay financially? Is there some way I can help you or put you in touch with someone else who can?’”

Frishman suggests these conversation starters:

  • “How are you? Is there anything I can do to help you with your finances?”
  • “I’m happy to help you out with your finances or get someone else to help, if you prefer.”
  • “Have you ever thought about a power of attorney? Let me know if you ever want to speak with someone to set that up.”

It also helps to lead by example. Frishman says, “Tell your parents that everyone should have a power of attorney, and that includes you. Let them know that, recently, you set one up for yourself. Then tell them why you feel it benefits you personally and ask if they would like to know how they can set up their own power of attorney.” If, at first, the conversation doesn’t go well, try again later. Be persistent until you know your parents are getting the help they need.

 

Encourage Your Parents To Sign A Power Of Attorney

A durable power of attorney is at the core of every estate plan. That’s why it’s one of the first documents your lawyer will address with you and your parents. A power of attorney is a legal document that allows someone you choose to make decisions about your estate if you lose cognitive decline. Ideally, your mom or dad will have already created a power of attorney earlier before losing their cognitive capabilities.

Frishman indicated that even if your mom or dad has early signs of dementia, it’s still possible to create a power of attorney. Just know that your parent must be mentally competent at the time that they sign the document (fortunately, this is still possible even if they periodically go in and out of cognitive decline).

Ideally your parent chooses someone they know and trust. Often this is a family member or close friend, but it can also be a professional they’ve worked with for years, such as a financial advisor or accountant. Just remember, it’s critical to pick a person with integrity who has your parent’s best interests at heart. Frishman says, “Sometimes the oldest child isn’t the best fit, for example, if they’re not good with money or have selfish motives. Your parents should choose someone who is financially wise and can act with integrity on their behalf.”

Unfortunately, if your parents have already lost their cognitive capabilities, and there isn’t a power of attorney in place, it’s much more difficult for them to obtain legal protection. One way is for you or another person to file in court for guardianship of the property. Just know, usually this is a longer and more complicated process with continuing oversight by the court.

 

Help Your Parents Finalize An Estate Plan With A Lawyer

If your parents signed a power of attorney, they’re probably already in touch with a lawyer. But if not, now’s the time to get one. A qualified legal professional can help simplify and expedite the estate planning process.

In addition to a power of attorney, Frishman recommends his clients create:

  • A healthcare proxy (also known as Medical Power of Attorney). This document designates someone to make healthcare decisions on your parents’ behalf if they’re no longer able to do so for themselves. For example, this person can make decisions about palliative care options, medications, life support, and more.
  • A will or revocable living trust. These legal documents organize and plan for your parent’s property upon their deaths. A lawyer can recommend the best approach for your family’s situation, whether it’s a will or revocable living trust.
  • List of beneficiaries. It’s important to have an up-to-date list of beneficiaries for your parents’ insurance policies, financial accounts, possessions, and more.
  • Guardianship designations. If your parents care for any minors (maybe they have custody of a grandchild, for example), it’s important to designate guardianship for that minor.

 

Be Careful To Stay Within The Law Along The Way

Even if you mean well and just want to help your parents, proceed with caution accessing their bank accounts without their legal authority—even if your parents willingly gave you their account information. No matter what, you typically need written permission, especially before making transactions on their behalf.

Frishman adds, “One place to be especially careful is when you need to move assets as a gift. Before transferring those assets, you need legal authority, usually through a power of attorney.” For example, sometimes adult children move money to help pay for a parent’s long-term care or to donate to a charity. Without legal authority, you can’t make these transactions.”

“It’s so important to create a power of attorney ahead of time—when your parents are still healthy and aware of the process. It can help prevent issues among siblings and give you or another trustworthy person access to make important financial decisions, should your parents be unable to do so for themselves,” reiterates Frishman.

 

The Bottom Line: Think About Estate Planning Early And Often

 As a CERTIFIED FINANCIAL PLANNER™, I recognize the need for legal support and partner with attorneys, like Aaron, to help ensure the legal protection of assets. We don’t work in silos, but collaborate to support our clients, and even pull in accountants to discuss tax implications when needed.

As professionals who are fully immersed in this process on a daily basis, we want to encourage you to help your parents solidify an estate plan as soon as possible—before they experience cognitive decline. This can help alleviate stress, and even prevent unnecessary conflict, later on.

 

Lake Road Advisors, a Fee-Only, independent financial planning firm with offices in Corning, NY, Ithaca, NY and Portland, OR works with clients virtually all across the country. Paul Sydlansky, the founder of Lake Road Advisors LLC, has worked in the financial services industry for 20+ years. Prior to founding Lake Road Advisors, Paul worked at Morgan Stanley in Manhattan for 13 years. While at Morgan Stanley, Paul was a senior-level manager within the Institutional Equities Department. In 2018 he was named to Investopedia’s Top 100 Financial Advisors list. Paul received a Bachelor’s degree in Economics from Marist College and holds an MBA from New York University Leonard N. Stern School of Business. Paul is a CERTIFIED FINANCIAL PLANNER™ and a member of the National Association of Personal Financial Advisors (NAPFA) and the XY Planning Network (XYPN).

Having A Tough Conversation & Helping Your Aging Parents

Written by support@seostats.com on . Posted in Estate Planning.

Although it can be an uncomfortable experience, there comes a time when every child has to discuss estate planning matters with their aging parents.

It can be a tough conversation to have, especially if your parents (or you) are avoiding the subject, but there are ways to address their needs for their elder years and end-of-life wishes successfully with a little tact and preparation.

Here’s an overview of the most important factors you’ll want to cover with your parents sooner rather than later.

Health and Medical

With age, comes increased medical needs and concerns. Take the time to review your parent’s current medical coverage and conditions to make sure they are able to receive the care they need.

·        Review their healthcare insurance coverage

·        Assess if long-term care insurance is a good option for them

·        Address any limitations or future limitations that need to be planned for logistically and financially

·        Make sure they have (and you understand) their healthcare proxy

·        Identify who has durable power of attorney to express their wishes and make healthcare decisions if they are unable to speak for themselves

Financial and Legal

It’s best to address financial and legal matters before your parents face a difficult circumstance, like the loss of a spouse, cognitive difficulties, or other healthcare concerns that could make it more challenging for your parents to share important estate planning information with you and their long-term care wishes.

Regarding financial concerns, be sure to ask and find out:

·        Do they have enough savings for unexpected expenses?

·        Retirement income to live off of?

·        Other assets that they eventually plan to sell or transfer?

·        Charitable giving plans?

You’ll want your parents to feel in control of their money and privacy as much as possible, so don’t approach the conversation like an interrogation. Instead, simply make yourself available to them to help them manage their affairs.

And aside from knowing if they are adequately covered financially, there is certain information you will need in order to best help them with any of their financial and legal affairs, especially if the parent who usually handles these matters is no longer able to:

·        Name and contact information of their financial advisor or CPA

·        List of all their financial accounts/holdings, who to contact regarding these accounts, and who has access to them besides them

·        Name and contact information of their attorney

·        Location and information on all the insurances they carry (health, long-term care, etc.)

·        Access to their living will and/or last will and testament

·        Access and information for their power of attorney (if it’s not you) over their financial accounts should one or both of them become deceased or disabled

·        Access to their healthcare proxy

·        Access to tax returns

More than anything, it will be invaluable to you to know what their wishes are from them directly rather than trying to figure it out after they are no longer around or able to communicate with you directly.

Many estate planning attorneys also offer to video tape their clients communicating the wishes they decided upon in their will so that there is no misunderstanding by their beneficiaries of what they wanted after they are gone.

Care-taking

In addition to legal and financial matters, you’ll need to talk to your parents about some practical concerns as well.

For example, if you don’t live in their proximity, who will be their support system when they require it? Is there a third party who can intervene in times of difficulty? Do they have trusted friends who could fulfill this role if necessary? If the answer is no, it’ll be important for you to work with your parents to make decisions regarding their care when they need it eventually.

Perhaps at a certain point, your parents will come to live with or near you or another sibling, or you can arrange for in-home professional assistance or an assisted living community. Either way, this shouldn’t be decided for your parents; you should discuss all their options and learn what they and you are ultimately most comfortable with.

At the end of the day, this isn’t a conversation about how old your parents are and how needy they will become. This is a conversation that gives them a voice to share exactly what they want with someone they love and trust more than anyone in this world. Parents spend a lifetime taking care of you and being self-sufficient. Reassure them that they aren’t a burden, and that you just want to help make sure that you do your best to help them maintain their independence as long as possible.

Knowing what your parents want, properly and legally documenting their wishes, and preparing for the unknown (but inevitable) can provide a tremendous amount of comfort and peace later for both you and your parents.