familiarizing yourself with them. If you do have to track certain documents down, it’s far better to do it before they are needed, such as during a health crisis or after a sudden death. The last thing you want to be doing is searching through drawers and closets trying to locate necessary information.
The Money Talk
Like many women of her generation, my mom had always let my dad handle the finances. She knew where things were and what accounts they had, but deferred bill paying and investment management to her husband. So, it was no surprise that she needed help assessing her financial situation. And because she really didn’t have a good concept of expenses, her initial reaction to her net worth was “my, that’s a lot of money.” It’s true that after a lifetime of hard work and prudent savings, my dad had left my mom financially comfortable, but she was far from wealthy. Once we listed her sources of income (a pension check that would stop coming in a few years and a small social security check), along with her monthly expenses (including very high health insurance costs), she began to see that “a lot” was a relative term. Furthermore, we estimated that her savings had to last for possibly 20 years or more (her mother lived well into her 90s, and at the time, there was no reason to believe that my mom wouldn’t do the same), and may have to cover costs such as home health aides and other care not paid for by insurance. When projected out over the next two decades, it became clear that wisely managing her money would be essential.
Thankfully, she was eager to downsize and move closer to us, and she had no problem with me helping her create a budget (both of these things can be very difficult for aging parents). She was shocked by the high cost of, well … just about everything, including housing, utilities, and even groceries, and therefore gladly accepted some financial advice. She gratefully let me pay the bills, but kept control of her checkbook and reviewed monthly bank statements. Of course, we didn’t agree on everything. For instance, my mom had a soft spot for children and animals (like myself) and could not say no to those sad photos of hungry children and abused animals that arrived in the mail several times a week. She began writing checks to every organization that sent a request! We finally compromised by having her choose the two organizations that meant the most to her and making annual donations. For the rest of the year, she was instructed to throw all other requests in the trash, unopened. We had other minor disagreements along the way, but overall, when it came to the “money talk,” I emerged unscathed—but that’s not always the case.
A Sensitive Subject
You may have noticed that many of the documents on the checklist involve finances. For some caregivers, bringing up the subject of money can be more awkward than discussing end-of-life wishes. Let’s face it—money can be a sensitive topic. Many seniors are not comfortable discussing their finances with their adult children and vice versa, and even spouses can find it difficult to bring up. First off, the older generation never talked about money—it was considered a private issue. In addition, creating a will is a reminder of one’s mortality and brings up possible controversies over who gets what. It can also be seen as yet another loss of independence—giving someone access to your life’s savings can be scary! But these discussions are necessary and, once started, may actually reduce tensions and ease worries. Moreover, it’s vital that caregivers have a clear picture of the care recipient’s financial situation and review it regularly. This is the starting point for determining what type of care and living arrangements are affordable, and what, if any, financial assistance may be needed. Again, these conversations should happen before a long-term care situation arises. Here are some suggestions for talking to your parents or other loved ones about money:
Set the Right Tone—Anticipate that it could be an emotionally charged conversation, so keep the focus on the care recipient’s needs (“quality of life” instead of dollar amounts). Emphasize your concern for his or her well-being. As caregiver, you want to make sure he or she has enough resources to provide adequate care and cover unforeseen circumstances.
Explain Why Proper Planning Will Help your loved one, as well as the family. For instance, without a will, some assets could be taxed in unexpected ways, tied up in probate court, or taken from the family. His or her wishes may not be able to be carried out without legal documentation.
Keep Things Nonconfrontational—It should never seem like the purpose of the discussion is to find out if you will get your share! Avoid statements such as “You should…” Let him or her maintain control—the goal is to protect what your loved one has accumulated and use it wisely—not to take over.
Look for Appropriate Openings if you’re having trouble getting the conversation started. Appropriate occasions might be tax time (if you’re helping to file a loved one’s taxes or working on your own), when paying bills, or after an annual meeting with a financial advisor, for instance.
Arrange a Family Meeting to Discuss the Situation if other siblings are involved, but do not gang up on a parent. Designate one person to initiate the conversation.
Involve a Financial Advisor to be a liaison between parties if necessary.
Use Other People’s Experiences as a Conversation Starter—E.g., “Did you hear about …? His kids were left with a huge financial/legal mess. We should try to avoid that situation.”
Do Some One-Stop Shopping—If you’ve consulted an attorney about discussing end-of-life/medical wishes, it may also be the time to create a will or living trust and appoint a financial power of attorney to handle day-to-day finances. This is often a family member, but it could be an attorney or bank officer.
Contact the Area Office on Aging if you are finding it impossible to initiate these discussions (typically found in every state, by county). These agencies have social workers on staff, as well as volunteers, who can help facilitate discussions and provide advice on when to establish financial control.
It’s important to not only do a financial assessment (current assets, income, expenses), but also estimate the costs of long-term care, including home care or assisted living facilities. This can be tricky because it involves making guesses about how long someone might live and what type of disabilities he or she might develop. While it’s impossible to predict the future, you can make educated projections by doing some research on the costs of care options and assessing current health conditions, as well as family history.
As with legal documents, financial information should be kept in a binder or electronic file for easy access, and all parties involved should have copies.
Similar to legal issues, when asked the majority of folks (75 percent) agree that it’s important to talk about retirement expenses, eldercare, and estate planning, but only 44 percent have had detailed discussions, according to a recent study by Fidelity Investments. In addition, nearly two-thirds of families disagree about the right time for such conversations. The National Endowment for Financial Education found that 70 percent of adults have difficulty talking to their families about who will make financial decisions on behalf of aging family members who have become unable to handle their money.
When to Step In
Sometimes it’s difficult for caregivers to determine when the care recipient needs help managing money. A loved one might be physically impaired but mentally sharp and, as mentioned, highly protective of his or her finances. There are some signs, however, that caregivers can watch for that may indicate it’s time to step in:
