Health, caregiving and estate planning: how to -2-

Cherry recommends trying this approach. "'You know Mom and Dad, I can appreciate that you don't want to talk about it now. However, when the time comes, if you don't talk about it now, I'll be handling it anyway...And it's better if you have more control of how all this goes about.' The adult child is going to deal with it one way or the other."

Adult children shouldn't expect to get all the financial information they need in one meeting, but they could create a timeline and an event trigger to get such information.

Cherry recommends saying something like the following: "'There's going to be a time to have these discussions with a little bit more detail. When do you think that'd be more comfortable for you?' Again, giving them control.... Because you want to share with them that their best interest has been your best interest."

It's also important to suggest such discussions while they are healthy and have a clear mind. "Because we are going to be caring for you, we want your legacy to be carried out the way you want it," Cherry suggests.

Estate planning

Adult children should also determine whether the appropriate legal documents have been completed and, if necessary, updated. This includes wills, trusts, power of attorney documents for finances, and revocable trusts. There should be discussions about whether certain types of accounts - retirement accounts, life insurance policies, investment accounts, payable-on-death (POD) accounts and transfer-on-death (TOD) accounts - designate a beneficiary who will inherit the assets upon death and whether those designations reflect the parents' wishes and desires.

With respect to financial matters, there are several considerations, says Colleen Carcone, the director of wealth planning strategies at TIAA.

First, what happens if parents become incapacitated? Can their children manage their assets? "Without a valid, durable power of attorney, the answer is 'maybe,' but it would be much more difficult than if the appropriate documents were already in place," she says.

Specifically, a durable power of attorney (DPOA) will name someone to step in and manage financial assets when a loved one becomes incapacitated. Absent the DPOA, the child would have to petition the court for guardianship to obtain control over those assets.

Besides making sure the right documents are in place, parents need to make it easier for children to discover where the assets are located.

"While some parents are understandably reluctant to share detailed information about their finances, it's important for children to know where the assets are located," Carcone says. "Which banks hold checking or savings accounts? Where are retirement funds and other investments? And if parents have a financial adviser, how can the children contact them? Amid a time of sadness and uncertainty, these details will make it easier for children to handle the necessary basics."

Another sensitive topic would be inheritance plans and intentions.

"When it comes to inheritances and how assets transfer after death, it's important that everyone has a plan," says Carcone. "That would mean creating a valid will and, in many cases, a revocable trust. Other assets will pass to a named beneficiary and explaining that plan in advance will ease the burden a child has to face after a parent's death."

Often overlooked, is the "why" behind the parents' plan. Having these conversations now can maintain family harmony and avoid hurt feelings.

"If a parent is leaving more assets to one child than another, for example, maybe it's because one child's financial position is better than another, or because one child has a greater need," says Carcone. "Better to explain that rationale now rather than having the child who receives less think, 'Mom always liked her more than me.' Maybe Dad is leaving his valuable watch collection to one child because collecting watches was a hobby they both shared. Or maybe Mom and Dad left assets to a trust for that child to protect them from creditors or to lower estate taxes. Understanding the 'why' behind a parent's plan can pave a smoother road for the children following a parent's death."

While all of these conversations can be emotional and challenging, they are essential.

Resources: Developing an estate plan and Estate planning tool kit

Healthcare planning

In cases where retirement healthcare expenses can reach up to $315,000 for a 65-year-old couple, according to Fidelity, not including long-term-care costs, it's essential for adult children to proactively plan with their parents. This planning helps mitigate financial burdens, especially during emergencies.

Central to this plan is an annual review of the parents' health insurance coverage, which might include Medicare, Medicare Advantage, Medigap, or other plans.

It's vital to ensure parents have necessary legal documents such as a power of attorney for healthcare, advance directives, do-not-resuscitate (DNR) orders, Physician Orders for Life-Sustaining Treatment (POLST), living wills, and HIPAA releases. Online resources such as prepareforyourcare.org and fivewishes.org can help articulate end-of-life preferences.

Initiating conversations about healthcare decisions and financial plans, though difficult, is preferable to dealing with them in distressing circumstances.

"These conversations about healthcare decisions and financial plans can be emotional and uncomfortable, but it's better to have them now rather than waiting until things get heartbreaking," Carcone says.

Parents should also communicate their medical treatment preferences to their children. "Things to discuss range from vital to practical," she says. "Do you want extraordinary measures to be performed to keep you alive, or do you want a do not resuscitate order (DNR)? Do you want to live in your home with healthcare providers visiting, or would you rather live in a facility that has resources to help."

The Conversation Project is one resource to kick-start the process

The sad reality

Adult children - despite their best efforts - should also accept the fact that their aging parents may not ever want to talk about their finances, their estate plans, their retirement accounts and the like. "You have to be prepared to accept that they may not have that conversation with you, ever," says Cherry.

-Robert Powell

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04-23-24 1258ET

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