Financial planning in Canada for aging parents
Adult children are typically afraid to inquire about their parents’ income, assets, and investments due to the sensitivity of the topic. If you are unprepared for this discussion, your concern and questions may be misinterpreted as insensitive or even self-centred.
Learn how to talk about money with your parents by reading beforehand. Consider that it may take Mom and Dad a few attempts to come up to the concept of legal and Financial Planning in Canada and have an open dialogue. Use this checklist to guide your discussion and ensure that you cover all the key elements of a strong future plan.
Ensure that you understand your parents’ wishes, that they have made the necessary legal arrangements, and that the individual they have chosen to manage their affairs is willing and capable of carrying out their directives. During such a difficult time, should their circumstances change, your family will value clear direction. When emotions are already strong, these recommendations will also aid in preventing conflict.
Seniors Financial Planning
Even if your loved one is hesitant to speak, you should encourage them to do so in a gentle manner. Even if her parents’ home hadn’t burned down and her father hadn’t been severely injured, Beverly’s circumstances would have been tragic. However, if she and her siblings possessed the necessary financial and legal documentation, it would have been much easier for them to deal with the aftermath and care for their frail mother.
Elderly Finance Tip 1: Start the conversation early
It may be some time before your parents need your assistance, but you should initiate contact immediately. Consider having a conversation with your parents regarding who will manage their affairs in the event of a crisis. The National Institute on Aging recommends that parents grant formal permission to a designated family member to discuss their personal matters with relevant experts, such as doctors, financial representatives, and Medicare authorities. Without such foresight, privacy restrictions may prevent vital communication.
Beginning ongoing communication immediately will make it simpler for you to comprehend their financial picture and give you a clearer picture of your future level of involvement.
Elderly Finance Tip 2: Whenever possible, make changes gradually.
Instead of rushing to assume financial responsibility for your family, gradually increase your assistance as needed. For example, if you have assumed the responsibility of writing checks, you should begin by doing it together. This type of gradual, sensitive approach gives children (and you) time to adapt to the new circumstances.
Elderly Finance Tip 3: Examine financial and legal documents.
Create a list of your parents’ contact information, account numbers, and the locations of vital legal documents such as birth certificates, insurance policies, deeds, and wills. Verify that all information is current and accurate and that all accounts are in good standing. Ensure that any sensitive information is kept in a secure location, whether you are compiling this information or determining where your parents have stored it.
Elderly Finance Tip 4: Simplify billing and accept financial obligations
Examine any income your parents may have, such as retirement or savings, and convert these income streams to direct deposit if at all possible. This will ensure that your parents’ funds are deposited into their accounts if they cannot or forget to do so. If paying bills causes them stress, you may want to set up online bill pay so that everything is paid each month automatically.
Elderly Finance Tip 5: Consider a power of attorney
A power of attorney is a document in which an adult delegated authority to make decisions to another adult. There are various types of power of attorney covering financial, medical, and general decisions, and they may be temporary, limited to specific circumstances, or all-encompassing. By executing a power of attorney with your parents, you will have the legal authority to make important decisions on their behalf if they become unable to do so themselves. Consult with an attorney who specialises in elder law for assistance in drafting a durable power of attorney that meets your needs.
Elderly Finance Tip 6: Communicate and document your conduct
Inform your loved ones, especially your and your parents’ siblings, about current events. Open lines of communication can reduce the likelihood of misunderstandings with relatives, who can be indispensable sources of support. It may be difficult to manage your elderly parents’ finances, but you don’t have to do it all by yourself.
Elderly Finance Tip 7: Maintain financial separation
No matter how convenient it may seem, combining your money with that of your parents is not a good idea. Using your personal assets and funds to assist your parents is a slippery slope, and you should always keep them separate. It is imperative that you do not jeopardise your own retirement or savings goals while assisting your parents.
Elderly Finance Tip 8: Identify the symptoms
If you’ve spoken with your parents beforehand, you probably have a plan for assisting them when they need assistance. However, it may be difficult to determine whether your intervention is appropriate or necessary. These indicators may indicate something.
Unusual purchases: Pay close attention if your parents enter a large number of contests or sweepstakes or if they acquire items that do not fit their needs or lifestyle. This trend can quickly spiral out of control, and the elderly are often vulnerable to fraud.
This may indicate that your parents are making unusual purchases, falling behind on bills, or entering contests.
If your parents only discuss money when you’re around them, this could be an indication of a problem, whether they’re claiming they don’t have enough or avoiding things they believe could set them back.
Memory issues: Cognitive lapses, such as Alzheimer’s Disease & Dementia what date to write on a check or where to write the amount, are a key indicator that assistance may be required.
Physical obstacles: Vision loss can make it difficult to drive to the bank, and arthritis can make writing checks or addressing envelopes a painful ordeal. If you believe that tasks are becoming increasingly difficult, it may be a sign that assistance is required.