Caring for your aging parents’ financial life

How to address the challenges and create a workable plan

When adult children are caring for aging parents, many are grateful to have a way to repay a lifetime of financial and emotional support. In one recent survey, almost 6 out of 10 Midwesterners said they felt that children should take care of aging parents^†, and those who do may experience a stronger relationship, increased empathy, and even improved health^‡.

Yet the logistics can quickly become overwhelming. I’ve worked with a family in which one parent has dementia, and the other parent, who has never handled any of the finances, is overwhelmed trying to understand their cash flow, taxes, investments, and charitable giving–in addition to coordinating care.

The burden of unraveling the complexities in this situation is largely falling on one child. Sadly, this is an all-too-common situation. Ensuring the parents’ safety, care, and financial stability, is complicated, and while it’s now under control, it still requires almost constant review for this family.

A widespread problem

All of the logistical challenges related to managing a parent’s finances and their healthcare can be exacerbated by a lack of ‘incapacity planning,’ which is an umbrella term for measures taken to prepare for such caregiving. Children often don’t want to bring up the subject of a parent’s decline, even when it’s becoming obvious. At that point, commonly, neither parents nor their children have made sufficient preparations, making the situation even more fraught with challenges.

Factors that surround incapacity planning have extra emotion packed into them. You may go from your parent being someone you can rely on for your own emotional support, and perhaps for financial assistance as well, to someone who is suddenly another dependent.

Coming to grips with the situation now

First things first: Adult children need to understand what plans their parents may already have in place. Whether you’re already caring for aging parents and their finances or expect that responsibility to fall to you in the future, there are steps you and your parents can take to help address the financial and emotional considerations. A conversation with your parents and other affected family members can clarify what everyone may be facing.

If your parents’ preparations need further attention, you can work with them, other family members, and your financial advisors by discussing the following questions to create a to-do list:

• Do your parents have all appropriate estate planning documents in place: will, financial power of attorney, healthcare directives, and possibly a revocable trust?
• What is the state of your parents’ finances? Preparing a list of their assets and understanding values, titling, and beneficiary designations is essential.
• Do they have long-term care insurance, or have they made other provisions to cover the expense of a stay in an assisted living facility?
• How and where do your parents want to be cared for? Do you know their end-of-life treatment wishes?
• Do contingency plans exist in case you or other caretaking adults unexpectedly become unable to care for your parents or yourselves, which happens quite frequently.
• Have you discussed funeral planning with your parents? It can be a difficult topic to discuss, but understanding your parents’ wishes well in advance will help you properly celebrate their lives when the time comes.

Key to any plan is communication. As mentioned above, I had one client whose father had to go to a memory care facility. To manage his care and to support one another, the client and the rest of the family met regularly to discuss who was going to go see him and on which days. Also, they communicated with, and about, the client's mother, who while healthy, was feeling the strain. These meetings helped the family ensure the client's mother had food in the house, and when she was too worn out, someone to visit in her place. Working together, families can apportion responsibility and take advantage of each person's availability and skill.

Take stock of your own estate and financial planning in this process. As you get your parents’ affairs in order and develop a game plan, do the same planning for yourself.

Moving to long-term focus

With a plan in hand, you will likely need to adjust the road map as your parents’ health, caregiver responsibilities, and caregiver situations change. Children need to make an honest assessment periodically as to where their parents are, mentally, physically, emotionally, and of course, financially. The goal is to understand their financial needs and to see that they have the necessary resources, and a lot of that goes back to constant communication.

Getting the advice you may need

Huntington Private Bank advisors understand the financial burdens and responsibilities of caring for aging parents. Connect with your Huntington Private Bank advisor to outline a plan that can help alleviate your financial concerns. To learn more, please contact your Huntington Private Bank team to see how we can help, or find a Huntington Private Bank Office near you.