By Yusuf Osman, MBA
When was the last time you asked your parents for help? If you’re an adult 35 years of age or older, most likely you haven’t needed to rely on your parents for quite a while. As a child, you depended on them for nearly everything, from learning how to walk and talk, to navigating relationships and making important life decisions. As you grow up, the roles begin to reverse. Now your parents are the ones needing help with simple tasks like reading fine print and driving to doctors’ appointments, as well as more important decisions related to healthcare needs and end-of-life planning.
Taking on the role of your parents’ caretaker comes with many new responsibilities. This can be overwhelming, especially when you consider the emotional and mental adjustment required. While this may be an uncomfortable, and sometimes stressful, time of transition, having a plan in place can make a world of difference for you and your family. Here are some tips to help with financial strategies for aging parents.
1. Have a Will in Place
How many times have you heard a story in the news about a celebrity who died without a will and left their relatives and business partners with a raucous legal battle? Case in point: The battle over Jimi Hendrix’s estate continues to this day (more than 50 years later!) all because he had no will. (1)
While you may consider your family above such squabbles, it’s better not to test that assumption. You never know how large amounts of money will affect people and their behaviour. It is important for your parents to have a will that spells out their final wishes, including who will carry out those wishes as the executor of their estate.
This is especially important in situations with blended families. It’s all too common for someone to neglect to update their will and leave an ex-wife or ex-husband as the sole inheritor or executor of an estate. Not only do your parents need a will, they also need to make sure it’s updated to reflect their current situation and desired legacy.
The importance of double-checking beneficiary designations goes beyond just a will. Make sure your parents have gone through all their accounts, including life insurance policies, retirement accounts, and other savings and verified that their listed beneficiaries are correct.
2. Start the Long-Term Care Conversation
One study estimates that by 2036 up to 25% of Canadians will be 65 or older. (2) If your parents fall into that category, it’s likely they will need to rely on supportive care, such as nursing homes, in-home care, or long-term care facilities. (3) Many long-term care facilities and home-care services receive public funding. However, most also charge co-payments or extra fees for additional services that aren't provided under the long-term plan.
Your whole family must come together to develop a plan for caring for your parents when the time comes. Discuss topics such as: Who will provide care for them? Who will pay for the care? Does it make sense for them to purchase long-term care insurance?
All too often, the most responsible or local son or daughter ends up shouldering the entire burden. This leads to burnout and resentment toward the other siblings. Save your family the trouble and proactively come up with a plan that everyone can agree on.
3. Assign Roles and Responsibilities
Over 500,000 Canadians are living with dementia today, and 65% of those diagnosed over the age of 65 are women. (4) There’s a chance that a time will come when at least one of your parents is no longer able to make decisions for themselves. Who is going to make decisions for them at that point, both financial and medical?
While this can be an uncomfortable conversation, don’t avoid it. This is something you need to discuss with your parents and get the proper legal documents in place before they become incapacitated. Having simple powers of attorney written up will save you the trouble of going to court to request the right to help your parents when they need it most. And if your parents are comfortable with it, it would be a good idea to have one or more of their kids added to a bill-paying account. This way, if an emergency situation arises, they can access cash reserves to pay bills and debt payments immediately instead of waiting for assets to be released or legal documents to be enacted.
4. Invest in Your Relationship
While it’s important to have all the proper legal documents in place and have a plan for how to take care of your parents when they can no longer take care of themselves, the biggest regret for most people is simply that they didn’t make the most of their time with their parents.
We all know our time on earth is limited, so we need to spend it investing in those we love. As you watch your parents age, it’s a visual reminder that your time with them is coming to an end. Consider creating a routine to make sure you spend time with them frequently while you still can. Can you make a standing date for breakfast on Fridays or a phone call on Sunday afternoons? Carving time out of your busy schedule for your parents is one of the very best ways to prepare for these final years of their lives.
5. Enlist the Help of a Professional
Writing a will, planning care, and making these critical decisions, especially with all the emotions involved, can feel overwhelming, to put it mildly. Sometimes parents aren’t receptive to these difficult conversations with their children, the kids who at one time needed them to take care of their every need.
In these situations, it’s often helpful to involve a neutral third party, such as an experienced financial professional who understands the intricacies of planning for the latter years. Working with a trusted advisor can help you navigate these emotional family discussions.
I am dedicated to supporting, educating, and providing informed direction to each and every client. If you would like help planning for your parents’ future, contact me at (613) 230-5895 or firstname.lastname@example.org. You can also see what my clients think about working with me.
Yusuf Osman is a Senior Investment Advisor at Argosy Securities Inc., an independent full-service financial advisory firm dedicated to helping clients create financial freedom, security, and peace of mind. With over 30 years of experience in the finance industry, Yusuf is committed to educating, engaging, and inspiring as many people as possible to take control of their finances. He spends his days developing a thorough understanding of his clients' lives, concerns, and dreams to help them build a program that keeps pace with changes in both the markets and their lives. Yusuf graduated from the University of Ottawa with a bachelor’s degree in Science and earned an MBA in Finance from Queen’s University. To learn more about Yusuf and his Dynamic Wealth Program for Women, go to https://www.argosy-osman.com/women or connect with him on LinkedIn.
___________ (1) https://www.guitarplayer.com/news/the-estates-of-jimi-hendrix-and-noel-redding-and-mitch-mitchell-are-suing-each-other-heres-whats-going-on#:~:text=The%20estates%20of%20all%20three,from%20streaming%20and%20digital%20media. (2) https://www.facetsjournal.com/doi/10.1139/facets-2020-0056 (3) https://www.facetsjournal.com/doi/10.1139/facets-2020-0056 (4) https://alzheimer.ca/en/about-dementia/what-dementia/dementia-numbers-canada