Don’t take our word for it, even The New York Times is interested in what we're doing: Lisa Rabasca Roepe recently penned an article A 5-Point Checklist for Managing Your Aging Parents’ Money that offers practical tips and advice on how we can better Raise Our Parents (as if the Next Generation wasn’t enough). And this is very serious and very real:
“Nothing truly prepares you for the day you’re sitting across from your aging parents, trying to piece together a financial picture they have spent a lifetime likely keeping private. For many adult children, that conversation often comes too late, triggered by a diagnosis that changes everything.”
We at Forward Inheritance understand the critical need and value of the family conversations and a shared understanding of the plan. It’s not about money, estate planning is about paperwork, process, and planning, all supported throughout by honest, heartfelt, and helpful conversations. And as the Sandwich Generation, we need to lead by example with these conversations.
When was the last time we asked Mom and Dad what they wanted? Do they have a plan? An idea? A wish? Once known, we can then work towards understanding the costs and expenses of making their wishes a reality. Do they have the funds? Do we alone? Do we together? Here are five ways to have these productive conversations:
1 - Start talking early - “It’s essential to start these conversations before a crisis hits, particularly if you’re noticing a change in a parent’s health.”
2 - Understand their budget - “Looking into your parents’ affairs may reveal they need financial help.” And likely paper checks and statements, too...ugh...
3 - Get account access - “Ask to become an authorized user of their accounts” rather than a joint owner to protect Mom and Dad, those assets, and you.
4 - Ask about durable power of attorney - “A durable power of attorney is a legal document that empowers a trusted person to make financial and health care decisions on your behalf if you are alive but incapacitated. Most people are familiar with a health care power of attorney, or P.O.A., because it’s often done when you draw up a will, but many people don’t realize that a health care P.O.A. doesn’t allow you to make financial decisions.”
5 - Verify that wills and beneficiaries are current - “Your parents may have created a plan a decade ago and are no longer sure it’s the right plan anymore, because there are new spouses and grandchildren. Even if parents have a will, it’s important that they name a beneficiary for every account, such as 401(k)s and brokerage accounts” to avoid the asset going to probate.
And the big mistake? “Instead of asking my mother what she wanted, I told her what she needed. That mistake shut down our conversation. Experts who work with aging parents and their adult children say this is one of the most common mistakes the children make: treating their parents’ crisis as a problem to solve.”
This is Mom and Dad’s estate. This is their legacy. They earned it. They can do what they want with it. Do some want to spend it all and leave behind pictures? Sure. Do most want to use it to help the Next Generation? Of course. Let’s help them, leading with love and inquiry and curiosity rather than logistics and decrees and selfishness. We can help ourselves. We can help our families move forward…