Having “the talk” with your parents!
by Michael Danchuk, CFP & Richard Nash, CFP
Investors Group Inc.
Do you remember when your parents sat you down to have “the talk”? At that time, it was the last thing you wanted to hear and likely included some anxious moments and uncomfortable feelings.
Well, it could be time to think about another “talk” but, not with your kids – with your parents.
Many of us are reluctant to discuss health and finances with our parents until a crisis occurs. A sudden health issue can reduce estate planning options, as well as increase costs. That’s why discussions and preplanning are so crucial. “The talk” can be a difficult and emotional conversation to have. However, the benefits of knowing your parents’ wishes can be extraordinary.
Having “the talk”
If your parents’ health allows it, they should be involved in making decisions about their living arrangements, level of care and estate plans. Your role is that of supporter and information gatherer. Here are some tips that can make having “the talk” easier and assist you in finding answers to your questions and theirs:
- Timing is everything–have your conversation well before a crisis occurs.
- Consider that your parents may also be waiting for an opportunity to have a discussion about their future with you, and you are providing a welcome opening.
- Use ice-breaking strategies such as offering to help with their estate planning or seeking their help with your retirement planning.
- Keep in mind that your parents want and need to maintain their independence and dignity.
- Listen, and try to understand their fears and anxieties.
- Make sure that the conversation focuses on your parents’ health and well being and your love and concern for them.
What to discuss
Once you feel comfortable approaching your parents about having “the talk”, it is important to know what to discuss. Here are some tips on what to talk about:
- Income – what are your parents’ sources of income, and do any conditions apply? For example, do they know how their monthly income will change when one of them passes on?
- Investments– have your parents designated beneficiaries for their registered investments and insurance policies? If so, who are they?
- Expenses – what are your parents’ expenses and will their income along with any government aid) be sufficient to cover projected home or personal care costs that may escalate with age?
- Insurance – what types of insurance coverage do your parents have? Are there any holes that may need to be filled to protect the value of their estate?
- Wills– do your parents have up-to date wills? Without a will, unnecessary taxes may be payable upon their death, there is an increased potential for contentious litigation, and the very real possibility that their wishes won’t be taken into account.
- Executor – have your parents designated a personal representative (sometimes called an executor, or liquidator in Quebec) in their wills? This person (or trust company) is responsible for winding up their affairs and distributing assets and bequests in accordance with their wills.
- Enduring Power of Attorney – have your parents given someone the power to make financial decisions on their behalf if either or both of them become incapacitated?
- Living Will – (sometimes called a health directive and not valid in all provinces) have your parents provided explicit directions about the personal and medical care they desire should they become incapacitated? Have they appointed someone to make these decisions on their behalf? Have they considered a successor?
Have them show you where everything is
Be sure you know the location of your parents’ wills and other legal papers, as well as the location and content of their bank accounts and safety deposit boxes.
This report specifically written and published by Investors Group is presented as a general source of information only, and is not intended as a solicitation to buy or sell specific investments, nor is it intended to provide legal advice. Prospective investors should review the annual report, simplified prospectus, and annual information form of any fund carefully before making an investment decision. Clients should discuss their situation with their Consultant for advice based on their specific circumstances. Commissions, trailing commissions, manage-ment fees and expenses all may be associated with mutual fund investments. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. ™Trademark owned by IGM Financial Inc. and licensed to its subsidiary corporations. “Having ‘the talk” ©2008 Investors Group Inc. Comments or questions – Michael Dunchuck and/or Richard Nash can be reached at (604) 270-7700 or by email richard.nash@investorsgroup.com
There are many financial and estate planning strategies available to your parents as they age. We can help sort out the details and ease the awkwardness of “the talk”, by bringing an outside perspective to your discussion.
And, while you’re at it, take a look at your own situation. If you’d like help creating a plan to cover any of the possible turns in your own life, call us.