There are things nobody wants to think about until they have to, like taking care of your parents in old age and figuring out what will happen to your finances when you die. But planning for these events can save you and loved ones a lot of hassle later.
The first step is to simply talk about the inevitable.
“Think of the people who are important to you. Would your life be better if you never brought up this topic? Or would everyone’s life get better if you did? ”Said Lauryn Williams, certified financial planner and owner of Worth Winning, a Dallas-based financial planning firm.
“Getting the conversation going is a key factor in addressing these issues,” she says.
Okay, your death and the aging of your parents don’t make for easy conversations around the dining table. But there are ways to deal with any of these uncomfortable topics.
HOW TO HAVE THE CARE TALK
Millennials are currently the “sandwich generation,” said Frank Paré, CFP and President and Managing Partner of PF Wealth Management Group in Oakland, California. This means that they are responsible for raising their children while thinking about how to take care of aging parents.
The pandemic may have forced you to speak openly with your parents about your health situation. You can use that momentum to have conversations about the type of care they would prefer later in life, whether it be moving in with you, transitioning to assisted living, or care at home.
Williams suggests making a list of open-ended questions to get the ball rolling, such as “What would you like to do if you suddenly get sick?” Or “How do you see me as part of your retirement?”
Talk about the means your parents will use to pay for care, says Paré. Do you have life insurance? Are you subject to social security? Do you have a pension? Do you have to take care of long-term care insurance? This type of insurance covers chronic illnesses, disabilities or disorders. If your parents don’t have it or can’t afford to buy it, you can buy it for them, he says.
Having the conversation now helps prepare if you need to put money aside for care.
ESTATE PLANNING IS FOR EVERYONE
Contrary to what you might think, estate planning isn’t just for the rich. It is also not limited to married couples or those with children.
Inheriting your wealth and handing over your financial responsibility often involves drawing up a will, drawing up a living will in case of incapacity for work, and even a separate digital will for your online life that includes credentials and instructions on what to do with yours Social media accounts or assets like cryptocurrency.
A simple first step you can take now is to log into all of your financial accounts and designate a beneficiary for each. Then you can move on to the bigger questions.
“The work starts with you sitting down and asking – what would you like to see if you weren’t there?” Paré says.
Yes, it can be overwhelming to think about something bad happening to you. But creating a detailed estate plan will save your loved ones from sorting out your financial affairs while mourning your loss at the same time. It can also minimize the potential chances of an estate, which is the lengthy legal process to distribute your property after your death.
With an estate plan, you can make your desires and priorities clear, such as: For example, appoint a guardian for your children, decide what to do with your beloved pet, or donate your money to a good cause that matters to you. (Consulting your parents for advice can also spark a conversation about their estate plan and care needs.)
Williams suggests asking yourself these questions to make the process feel less abstract:
● What would happen if I was in the hospital for a while?
● What if I were unable to act and had to undergo an operation: Who do I want to decide for myself?
● Who would pay the bills or take the dog for a walk if I couldn’t?
By the time you start writing down your answers, you have already taken the first step in creating an estate plan. You’ll need to hire an attorney when you’re ready to officially move forward.
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This column was provided to The Associated Press by personal finance website NerdWallet. Amrita Jayakumar is a writer at NerdWallet. Email: ajayakumar@nerdwallet.com. Twitter: @ajbombay.
RELATED LINK:
NerdWallet: Estate planning checklist https://bit.ly/nerdwallet-estate-plan
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