The number of Baby Boomers in the United States has surpassed 70 million. However, millions of adult children may need to prepare to make crucial decisions regarding their parents’ future if called upon due to a lack of awareness regarding their parents’ finances.
Although many in their forties and fifties gained valuable financial lessons from their parents, the tables are beginning to turn. Grown children need to be aware of their parent’s financial situation. In addition, they need to be aware of crucial information in the event of their death, such as whether or not they are to serve as the executor of their estate.
The topic of money is always challenging to broach with parents in their golden years. In this article, we will cover the five most crucial inquiries.
Have You thought About Your Future Financial Needs?
Investigate if or whether your parents have a financial plan and an advisor if you are getting started financially. An intelligent method to find out what financial preparations they have made for themselves is to tell them about your plan.
Some parents will have well-thought-out strategies for their finances that will allow them to maintain a high standard of living well into their nineties. Alternatively, you can find out they are on a strict budget with little money. If you need to provide financial assistance to them, now is the time to start preparing for that possibility. If you decide to help them financially, it will affect how you allocate your resources.
Do you maintain an up-to-date record of your various financial accounts?
It would help if you had your parents compile a list of their assets and the people they named beneficiaries. For instance, if there are any IRAs or other assets, they will most likely go to the kids. Keep this information private.
Instruct your parents to retain the contact information for their financial advisor with their list. One of our clients delivers their adult kids a sealed envelope containing a list of all their accounts each year, with instructions on how to access the funds in the event of an unexpected circumstance. We also visit with the adult children of clients who are currently well, explaining the plan and how we might assist if the parent becomes ill or unable to make critical decisions.
If I am the executor, where is your will?
Finding out if you have any responsibility in the estate plan and what that responsibility entails is crucial. The offspring of several of our clients have been designated as the will’s executor or trust’s trustee.
Determine where your parents maintain their will and estate documents and which attorney has the most up-to-date copy. Most lawyers will retain a copy of the will on file, but we know of one family who struggled to discover the most up-to-date choice following a parent’s passing, even though most lawyers do. If your parents are like many people today and don’t have a will, you should encourage them to speak with an estate attorney. You could even volunteer to foot the bill. The process can be more expensive and time-consuming if necessary estate paperwork is included.
There may be instructions for the executor of the will on funeral arrangements and other final wishes. It’s not often clear from a choice whether or not a parent has already paid for their funeral or memorial services. Therefore it’s essential to inquire about this.
Is There Any Life Coverage I Need To Be Aware Of?
Depending on the terms of the policy, your parents’ life insurance might not be included in the list of assets they provide you. Investigate whether or not your parents have life insurance, and if so, what the policy number and insurance firm are.
Your parents may have access to group life insurance through their workplace if they are still actively employed.
Who is your legal representative for financial matters?
This essential legal document lets your parents choose a primary and secondary decision-maker for their finances if they cannot do so.
Locate your parents’ financial assets if you are the designated decision-maker for their care. Inquire further about their pensions, Social Security, and Medicare coverage. Knowing their utility companies’ names and contact information is also helpful in verifying your authority to act on their behalf by paying bills on their behalf.
Though it can be awkward to broach the subject, it’s in everyone’s best interest to talk to your parents about their financial and estate planning so that they know you’ll take care of them and their needs when they’re gone.