Your folks are in their 70s or even 80s and they’re doing just fine. They are independent and you want them to remain so for as long as possible. They want that, too, and are reluctant to tell you how much money they have and how it is invested, or to give you legal access to any of their accounts.
A Quiet Horse is Better Than A Bucking One
Anyone who has ridden a horse knows that it is easier to ride a horse that is quiet rather than one that is bucking. When your parents are still well and of sound mind is the perfect quiet time for you both to begin the conversation that culminates in you taking the reins and helping them with their financial management. If they are reluctant to begin sharing, gently remind them that their finances are very likely to become your “problem” in the future, and the more you know now, the easier it will be for you to do the job the way they want it done.
Most families hand over the reins when the horse is bucking (i.e., during a crisis) when the learning curve is steep and time constraints may force unsatisfactory decisions. No one wants to have to choose a senior living situation in one or two days just because the hospital is about to discharge them, but if your parents have not spent time with you discussing where they might like to live and how they would finance it, that’s just what might happen.
You may not actually pick up the reins until years down the road, but laying the groundwork should begin now.
- Make sure they have the most important legal documents in place (health care power of attorney, financial power of attorney and will) and that you know where the originals are (Tip: do not store the originals in a safe deposit box — a locked, fireproof file at home is better)
- If the powers of attorney are “springing,” that is, they only give the agent authority after the individual is deemed incapacitated (usually by two physicians), consider discussing this with an estate planning attorney. Many people need their legal agent to help them long before a doctor would consider them incapacitated, so a springing power of attorney may be difficult to use.
- Tax laws have changed. If they have an estate plan, ask them to have it reviewed by their estate planning attorney and accountant to make sure it meets their needs in the current tax environment.
- If you have been named as their legal agent for finances, ask them to add your name to their household checking account. You can pledge not to access the account until is it absolutely necessary.
- If they have a safe deposit box, go to the bank with them and add your signature to the list of those authorized to access the box
- Ask them to make sure their doctor and hospital have their health care powers of attorney on file.
- Ask them to give you a tour of their files and financial processes, especially the location of key documents such as long term care and insurance policy documents and the documents related to their funeral arrangements.
Remember that handing over the reins may be hard for your parents. It does not have to be done all at once. If you start early, you’re riding a quiet horse, and you’ve got time to make the transition slowly and respectfully.