* Talk to your parents about their financial affairs.
Parents may be reluctant to discuss their finances, but someone needs to know
the names of their lawyer and accountant. Someone needs to know where their
important financial papers are located. If they are still fit, encourage your
parents to make a detailed financial list for you, including information about
bank accounts, investments, insurance policies, retirement plans, location of
safe deposit boxes, etc. Getting familiar with important information now will
be much easier than trying to find this information after a parent becomes
physically or mentally impaired.
* Review your parents' financial picture together. Do your
parents have enough retirement income and savings to provide for their needs?
Should steps be taken to help stretch their assets over their life
expectancies? What if they eventually need nursing home care? Assess whether
long-term care insurance makes sense for them.
* Consider these important documents. A durable power of
attorney allows another person to make financial decisions on a parent's behalf
if he or she becomes incapacitated. A medical directive or living will is a
document stating a parent's wishes about medical treatment in case he or she
becomes too ill to communicate these wishes.
* Help put your parents' estates in order. Does each parent
have a will, and if so, where are the wills stored? When were their wills last
updated? The 2001 Tax Act made major changes to the estate and gift tax rules.
Have their estate plans taken these changes into account? Encourage your
parents to review their beneficiary designations on insurance policies,
annuities, and retirement plans to make sure their choices are still suitable.
Talking finances with your parents now can make caring for
your parents in the future much easier. For assistance, give us a call at (518) 798-3330.
