Unlike preparing for a first child, a joyful event that often comes with advice from family and friends, families are not well prepared for the demise of a loved one. When this happens, children and others in their 50’s and 60’s are faced with a myriad of issues and tasks. According to a Harris Poll Survey, 20% said they have an aging family member who has diminished financial capacity; 42% have assumed at least some responsibility for financial decision making, 43% have had someone else assume responsibility for their family member’s finances and nearly half of all adult children have not discussed their parent’s post-retirement care.
Don’t wait for a crisis – get prepared now. There are many facets of being prepared: legal, financial, real estate, pets, day-to-day living and more. Making preparations while the loved-one is alive and the sound of mind will greatly reduce the pain of managing this process when the time comes.
Depression-era seniors grew up in a world of paper and of holding on to possessions. They have paper checks, paper bills, paper records, photographs, newspapers, magazines and more everywhere in their home. They are not online and neither are their documents. As they age, they have greater difficulty remembering where their accounts are, what needs to be paid and when; their stamp, coin or gun collections, or that they put dollar bills into books in the bookcase. If they have emails, usernames, and passwords, it is unlikely they remember them. There may be tax or water lines on their house not because there isn’t money to pay them, but they put the bill in a drawer and/or didn’t open the mail.
What to do:
Divide and conquer. Identify all bills (annual, monthly, quarterly, intermittent). Pay those that need immediate attention, set up a payment schedule for all others. Look at your own bills as a guide for categories that might be missing from your parent’s list, especially the annual ones such as real estate taxes, insurance, and water. Create a financial inventory of accounts. Make a list of IRA rollovers and annual required minimum distribution requirements. Create a list of important documents such as legal documents, military records, titles, deeds, bank accounts and assets such as stock certificates. If you can’t find the documents, file for a replacement. If there are trusts, make sure all assets are listed in the trust, as often people forget to add new assets to their trust.
Contact all advisers for your parents – attorneys, bankers, asset manager, CPA to ensure everything is accurate, up to date and ‘on-file.’ Most importantly, make sure the legal documents are up to date (will, living will, durable power of attorney, medical power of attorney, trusts, etc.). If not or you don’t know, contact their attorney to schedule a review. And, of course, if you do not have a durable power of attorney, your loved-one must be present in any discussions.
Helping seniors and their families prepare for these times can take a village. To assist families in preparing this all important information, we have created a Personal Affairs Record you can receive free.
