As parents advance in age, it often falls on the shoulders of their children or other family members to begin handling their parents' financial affairs, according to Kurt Marlow, Financial Advisor with FirstMerit Financial Services. "But this is often easier said than done," says Marlow. "Many seniors don’t like giving up control of their finances. They are not comfortable, for many reasons, divulging the details of their personal finances. However, failing to help elderly parents put their financial house in order leaves family members in a difficult situation when there is an untimely death or disability."
To initiate a conversation about this topic with parents and gain their cooperation, Marlow recommends that adult children begin by expressing their genuine concern and desire to help. A family meeting can sometimes be a helpful forum for this conversation.
"There are many different ways to go about planning a family meeting," says Marlow. "To start, I encourage my clients to meet with me separately beforehand. For example, I will visit with my mature clients privately to discuss their financial situation to make sure I understand the needs and concerns they have. We then set up a separate appointment with the children or a close family member to discuss the parent’s financials and long-term care wishes."
During the family meeting, extensive notes are taken outlining an inventory of the parents' assets. Marlow provides a form for their use; a Family Discussion Checklist, a tool that is unique to FirstMerit. The Family Discussion Checklist is designed to help organize all important financial documents in one place. It details monthly income and expenses, bank statements, investment account statements, insurance policies, long-term care insurance, trusts, loans and mortgage documents. The checklist identifies which financial documents currently exist, where they are located, and which documents are still needed.
After the checklist is complete, Marlow works with the family to analyze the parent's financial situation and see what help may be needed.
"I try to find out what their concerns are, or whether there is a particular piece of the financial puzzle they are concerned with," he says. "The answers vary from family to family based on each person's unique financial situation and goals. For example, we discuss adding a Power of Attorney, or after consulting a tax professional, we may decide to add a trusted family member as a joint owner or other similar arrangements may be a solution. In some instances, beneficiaries may be added to the parent's accounts so that the designation is in place if something unexpected happens to the parent."
"No matter what solutions are decided upon by the family," adds Marlow, "the service that many of our family clients value highly is the convenience and assurance of having a trusted advisor to work alongside them."
The process for connecting generations and coordinating the financial affairs of the older generation can be comprehensive, but at the end of the day, it can be a unifying experience for the entire family when parents have the assurance that their wishes are being followed even after they are gone.
For more information on managing finances for the elderly in your life, contact Kurt Marlow, Financial Advisor, FirstMerit Financial Services Inc., at (708) 529-2158.
Securities offered through FirstMerit Financial Services, Inc. Member FINRA, SIPC; Advisory Services offered through FirstMerit Advisors, Inc.; Insurance products offered through FirstMerit Insurance Agency, Inc., affiliates of FirstMerit Bank, N.A.