We are raised to believe it’s never polite to talk about money, but there comes a time in the life of every individual when having this conversation could actually make a huge difference. When the roles become reversed between children and their parents – once the latter start heading towards retirement age – it’s time to sit them down for a complicated, yet necessary talk about finances.
A 2013 survey by the National Endowment for Financial Situation (NEFE) conducted by Harris Interactive surveyed 2,059 U.S. adults and discovered that 7 in 10 encounter tremendous difficulties talking openly to their families about who will manage financial and health care affairs on behalf of an older family member once he/she becomes incapacitated.
Of respondents who had an aging family member experiencing cognitive decline, 47 percent noticed the older family member had difficulty paying bills – paying them late or not at all. 36 percent said their aging loved ones had trouble figuring out basic math calculations, 35 percent noticed irrational purchases being made, while 21 percent were shocked to see their aging parents’ savings accounts depleted.
President and CEO of NEFE Ted Beck declared that,
“Americans are living longer and they have concerns about becoming a burden to their loved ones. But with aging comes a high probability thatmental decline can occur and without a financial plan, the burden looms. The negative consequences of families delaying or avoiding a conversation about the financial impacts of cognitive decline are too high to ignore.”
Caring for Your Aging Parents
According to specialists, forgetting to pay the bills or paying them twice is the first sign that children need to step in. Ideally, the talk about finances with aging parents would take place while the parents are still lucid and living in their own home – independent and physically healthy. However, this is rarely the case, because each side has its difficulties starting the conversation: children feel embarrassed to question their parents’ ability to take care of themselves, while parents are ashamed to admit they’re failing and afraid of losing their independence.
There are, however, ways to initiate a talk about such sensitive matters. An insightful article on Daily Finance provides several tips on how to do this effectively and not hurt your parents’ feelings. For instance, adult children are encouraged to use other people’s real-life experiences as examples for their own situation or do some investigating into their parents’ financial affairs (tax returns, bills etc.). It also helps to develop a plan such as a calendar for every month’s bills or divide caregiving duties among siblings. Regardless of how children choose to solve such sensitive issues, it is essential to maintain a compassionate attitude towards the needs and wishes of an aging family member.
Establishing some form of asset protection trust for your aging parents is a crucial step in ensuring they are well taken care of after they become incapacitated, but also that you and other heirs will receive what’s rightfully yours. Consulting a trust administration lawyer can help you prevent assets from being seized to cover medical expenses and reduce or completely eliminate inheritance taxes. Contact Wintter& Associates, P.A. for a free consultation by calling their office at 954.920.7014 (Hollywood), 305.948.6788 (Miami-Dade), or 561.470.3448 (Boca Raton) or visiting www.wintterlaw.com.
About the Author:
Christopher Q. Wintter is the founder of Wintter & Associates, P.A. and a board-certified expert in Trust and Estate matters by the Florida Bar. With more than 24 years’ experience as a practicing attorney, he also serves as an instructor and faculty member for the National Institute of Trial Advocacy (NITA)—the nation’s leading provider of legal advocacy skills training to practicing attorneys—and has earned the AV® Preeminent™ rating with LexisNexis Martindale Hubbell. He was also selected for inclusion in Florida Super Lawyers for 2011 and 2012 in Estate and Trust Litigation.