Helping parents with retirement
WHILE we were growing up, our parents had to initiate uncomfortable conversations that, for us, always felt ill-timed. However, these heart-to-heart chats were for our own good, giving us important information about growing up and becoming responsible adults.
But as your parents get older, you may find that the roles are reversed, and you’re the one who has to initiate the awkward conversation – about your parents’ money.
When broaching this topic, the first thing you need to establish is your parents’ retirement savings. While you don’t need to know exact amounts, you need to know where they plan to live once they retire and how they plan to survive. Will they need your help?
It’s not unusual for many adult children to end up having to take care of their parents. An honest conversation will better prepare you for anything that might happen.
Asking your parents whether they have a will is probably the most strained part of the talk, but it’s important and unavoidable.
You should know whether there is a will and, if so, where you’ll find it. If there isn’t one, offer to help them draw one up by referring them to a reputable financial planner or lawyer.
Ironing out the details of the estate plan is an essential part of the conversation. You’ll need to talk about a trustee, if they’re thinking about setting up a trust, or who will be executor of the estate.
An executor is responsible for ensuring that money owed by the estate is paid and that the remaining property is distributed among the beneficiaries as set out in the will.
It may also be worth asking about a living will, which is useful if your parents reach a stage where they are unable to give meaningful consent or instructions about prolonging life.
A living will names the person who has been given the power of attorney, as well as any other important instructions regarding your parents’ medical care.
Once you’ve dealt with estate planning, discuss how much debt your parents have and how long it will take to pay off.
Do they have any insurance that will take care of the outstanding credit in the event of their death?
If your parents have absolutely nothing in place, get the right advice for them. Don’t forget to employ a trusted lawyer.
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