Speaking to your parents about money is uncomfortable. But as parents age, it is increasingly important to understand some of the basic information related to your parents’ financial situation and future wishes. First, having a second set of eyes on your parents’ basic financial data is important to make sure their accounts are well documented and that they themselves are aware of their financial situation and plan. Second, simple things like making sure that your parents don’t have excessive credit cards and that they are paying their mortgage and car payments on time is very important. Often, financial missteps can take place for years with the adult children not learning about the problems until there has been excessive financial harm. Therefore, now is a great time to plan a day with your parents, bring a notebook, and record the answers to the following important questions:
1) Do you have an estate attorney? Who is the executor of your will? Who is your Power of Attorney? Do you have specific Medical Directives?
2) Can you provide a list of all your bank, savings, investment, and trust accounts? Who is the primary and contingent beneficiary on these accounts?
3) Do you use a secure password vault like LastPass or Dashlane? Who has the master login information for these accounts should something happen to you? Are you willing to share this with me?
4) Do you have a long-term care policy? If so, can I please read through the policy to know what is covered?
5) When do you plan to retire?
6) As you age, do you wish to live at home, in a retirement facility, or with one of your children and their families?
7) Do you contribute to any 529 accounts for your grandchildren?
8) How many credit cards do each of you have? Do you pay the full balance on time? What is the purpose of each? If you have more than 4, would you consider letting me work with you to close some of them?
9) What is your monthly mortgage payment and how much do you owe on your primary mortgage? Do you have a second mortgage? A HELOC?
10) What is the balance due on each of your cars? According to Kelley Blue Book, what is each car worth?
Try to get past the initial discomfort of scheduling this check-in with your parents. Arming yourself with this knowledge today can lead to better communication within your family and ultimately a smoother financial future for your parents as they age.