If your parents are anything like ours, they probably just want to become grandparents, retire on an island, and spend time doing their favorite hobbies with you and the rest of the family. Help them accomplish this and help yourself easily and smoothly inherit what they want to pass on to you. Nobody likes talking about the end of life, but the sooner you do it, the easier it will be.
To make the whole process easier on the future you, here are a few things to consider doing now before that time comes:
- Plan ahead. It is always easier to have conversations about long term care needs before it’s needed. While they are still healthy and happy, sit your parents down and express your willingness to help them plan ahead. They have worked hard for their home and their savings. It may be uncomfortable now, but having this discussion will save a lot of distress later. They might really appreciate your proactive approach.
- Get to know your parents’ Financial Advisor. Before your parents need long term care, become mentally unable to make decisions, or pass away, their Financial Advisor should be willing (as long as your parents are) to meet with you and their other beneficiaries to review the many accounts and insurance policies in their portfolio. Ideally, you will hold this type of meeting when your parents are still relatively young and healthy. This will give you all of the necessary details you might later need such as who carries their Life Insurance, who they have named as beneficiaries, and what type of bank accounts and investments they have and where.
- If they do not have a Financial Advisor, suggest they find one or refer them to yours. There are a lot of tips and strategies that can make the aging process easier to cope with if you and your parents are prepared. If your parents or grandparents have multiple accounts at different firms, suggest consolidating with the advisor they trust and like the most. This makes everything easier.
- Help to protect their assets, especially their home. If your parents do someday go into a nursing home, it will be very expensive. Having at least the minimum state requirement of Long Term Care Insurance will protect their primary residence. Without it, the state can deplete its equity to cover any long term care expenses. Additionally, the look back period for transferring wealth is 5 years. This means that your parents will have to have transferred assets to you or other recipients more than 5 years before they enter a nursing home to protect it from being collected as payment. This step helps you more than them. After all, if you are their primary beneficiary, you’re going to want to make sure your inheritance isn’t totally wiped out.
There’s a lot on your plate. Between taking care of yourself and your family, you have countless other things on your to-do list on a daily basis. This doesn’t all have to be done in one day. Take your time, but have the conversations. You’ll thank yourself later and so will your parents or grandparents. And someday have these same conversations with your children in case they don’t think to bring it up.
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Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Please note that individual situations can vary. Therefore, the information presented here should only be relied upon when coordinated with individual professional advice