Helping Aging Parents with Their Finances
Millaine Wells: Welcome back. As parents age, they often need to rely on their adult children to handle financial matters.
Lisa Malak: And today, we're talking about setting the stage to act on their behalf and also in line with their wishes. Justin Randall's an attorney with Hooper Law Office. Good morning.
Justin Randall: Good morning.
Lisa Malak: All right. Let's start by talking about how we make sure that adult children [...] how are we ready, how do we get ready to act on our parents' behalf?
Justin Randall: The first step is talking with your parents and knowing what their wishes are with things. How do they do their finances? What are their investment risks? How risky are they?
But the other thing, too, is you want to make sure that you have the authority to act on their behalf. So what that means is having a well-drafted financial power of attorney to have all the authorities that they're going to need to step in on behalf of their parents.
Millaine Wells: So how do you make sure children know what accounts their parents have and that they have access to them?
Justin Randall: That's a good question. The first thing you want to do if you're the parent is to make a list of where you do all of your financial investment. Having that list is really important because your kids are not going to know where you do every part of your financial life. So having that list is one thing. But also introducing them to your financial advisors is another really good step, because then not only do they have that face with the name, they know exactly who to go to if they have any concerns about, well, Mom or Dad suddenly needs care.
Lisa Malak: One of the most expensive things involving end-of-life care or even later-in-life care is long-term care. We have an interesting graphic that shows that the valley in Northeast Wisconsin is one of the most expensive places in Wisconsin. How are we going to prepare for this?
Justin Randall: Yeah. So the kind of standard cost of care in this area [...] this isn't a national average by any means [...] is about $100,000 a year for the highest level of care, and possibly higher. So the first thing you want to do is make sure that you have the authorities granted in that financial power of attorney to be able to step in on your parents' behalf. So that includes things like making gifts or doing long-term care planning, admitting them to a care facility, talking with their financial planners on their behalf, things like that. That's the first step.
But also talking with them about planning for that cost of care in advance. That's the most important thing.
Millaine Wells: And what about record keeping? Who needs to be doing that and when should that start?
Justin Randall: Everyone should be doing record keeping but particularly someone acting on behalf of their parents with financial planning or with taking care of their finances for them if they need care. You don't want to have to try to explain your costs or your reimbursements to yourself later on. What can happen when care is needed, especially if you're making a Medicaid application is that they will ask for proof of why you made that expense or why you paid yourself back. So you really want to make sure you keep a record of that.
Lisa Malak: We want to start right away, right? As soon as possible?
Justin Randall: Absolutely. Yeah.
Lisa Malak: All right. Well if it sounds a little bit overwhelming to you, Hooper is here to help. They are holding free educational events online every week.
Millaine Wells: You can head to their website, EstatePlanningLive.com. June 3rd is the next one coming up on long-term care for parents. Touching on a lot of these topics in expanded format that we just went over Justin. Thank you for being here today.
Justin Randall: Thanks for having me.
Lisa Malak: Thanks, Justin.
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