You may think that once you’ve had the money talk(s) with your kids, your duty is done. But not so if you have aging parents. According to the Financial Consumer Agency of Canada, “gaps in financial literacy skills have made some older Canadians vulnerable to problems, from having difficulty in managing their finances or outliving their retirement savings, to falling victim to fraud or other types of financial abuse.” (As a result, the first phase of the federal government’s National Strategy on Financial Literacy focused on seniors, one of the identified priority groups.)
But having conversations about money with your parents (or other elderly family members) can be challenging because it raises some sensitive and difficult issues. Maybe you’ve tried to broach the subject, but it just never seems like the right moment. Or perhaps you don’t even know where to start.
One approach is to talk about what you’ve heard that goes on in other families – both best practices and cautionary tales. Talk about a family that’s winding up their mother’s estate in an orderly way, in accordance with her wishes as set out in her will, compared to one that’s in disarray because the patriarch died intestate (without a will). Or perhaps you can find a story “ripped from the headlines” about an elderly man with dementia whose savings from a joint account were stolen by his own daughter.
Once you’ve opened the discussion, the following key financial topics should be covered – probably over several conversations or meetings. And you can always seek professional help or support from other family members if you need it.
• Create an emergency/key contacts list with contact information for their lawyer, financial advisor, accountant, caregivers, neighbours, friends…
• Do they need help with day to day banking and bill payment? Consider opening a joint account with a trusted family member who can access the account to do errands or pay bills on their behalf.
• Review their budget. Do they have enough money today and for the future?
• Make sure they have applied for and are receiving any and all government benefits (CPP, OAS, GIS) to which they are entitled.
• Remind them to be wary of scams; if something sounds too good to be true, it probably is. Contracts or agreements should not be signed without a trusted advisor providing a second opinion.
• Discuss an elder care plan: continue to live at home with a caregiver, sell the family home and move in with family members, or move to assisted living or a nursing home? Discuss and analyze the financial impact of these different options.
• Consider the income tax implications of caregiving.
Wills & Estate Planning
• Ensure that a legal will has been prepared and that it is up to date, reflecting their current wishes.
• Discuss their legacy plans and whether there are any charitable bequests they wish to make in their will.
• Undertake proper estate planning to help cover or minimize estate costs such as probate fees and income taxes on death.
• Make a list of banking and investment information including accounts, branch locations, safety deposit boxes (with location of key), credit cards etc…
• Prepare powers of attorney for personal care and for property.
• Discuss their insurance needs with the advice of a professional, including life insurance, critical illness insurance, and long term care insurance
Money doesn’t have to be a taboo topic with aging parents. It’s in their best interests and yours to have all of the issues on the table. You won’t be sorry if you do, but you may come to regret it if you don’t.