Eventually, many of us may find we are called on to help aging parents and other relatives. While that time may bring a range of challenges, from emotional to physical, planning ahead can help relieve some stress down the track.
Here are 3 suggestions which can make a difference when the time comes.
- Discussing how your parents want their future to look in a range of situations
It may not be an easy discussion, but knowing what your parents want can help you find the right options for them later. What type of care and living arrangements would your parents want depending on their physical and mental health? What can they (and you) afford depending on those situations? Will you also be able to physically and mentally offer the support they might need? This last question is important, but often overlooked. Many Australians are living longer, so you could find yourself retired and slowing down physically but still needing to offer considerable physical and mental support to elderly parents in their nineties.
It can also help to establish ‘trigger’ points with them. For example, when your parents can no longer manage the gardening may be the driver to move to a new home or a retirement village. Or, when a parent with a diagnosis of dementia starts to show clear signs of memory loss may be time to change care arrangements.
It’s not about taking the decisions out of your relatives’ hands but helping them establish their wishes while they still can and in turn, this is information they can also take to any specialists they use, such as their financial advisers or accountants to plan ahead or even to lawyers to help them with their Wills and Estate planning. For those who may need to offer some financial support to aging relatives, knowing this information can also help you plan ahead and adjust your spending too if needed.
2. Setting up a power of attorney and enduring guardianship
At any age, it can be valuable to have a power of attorney and enduring guardianship documents set up through a solicitor or lawyer – after all, you never know what circumstances life may send your way requiring others to take care of you or your finances.
For some aging relatives, the need to rely on these documents may be inevitable, for example, when physical infirmity prevents the ability to go to a bank to manage their own finances or prevents them from making an informed decision about their own care or lifestyle.
This is a trust relationship and requires your relatives to consider carefully who they want to rely on. It requires their informed consent in creating too, which can create challenges if left too late. For example, it may be near impossible for a patient suffering from mental deterioration to provide any sort of informed consent to a power of attorney or changes to their finances. Establishing these sorts of documents before problems arise can protect both aging relatives and their family members from being unable to help later.
3. Establishing clear records of finances and assets
Finances and assets are a sensitive topic, so it may not be one your parents or other aging relatives wish to discuss with you. This is understandable – but you can still help them plan ahead by encouraging them to set up clear records of what assets or debts they have and where their finances are, as well as contact details for institutions they use along with financial advisers, accountants, lawyers and other specialists.
If they do have existing relationships with specialists such as those previously mentioned, these specialists will generally already have clear documentation for them and can assist with setting up arrangements for you to be aware of or even access when and if the time comes.
Having clear documentation to help if the time comes later can make an otherwise stressful time somewhat easier to deal with. For example, you don’t want to receive unexpected debt collection notices for your relatives that would have been covered at the repayment time if you’d known about it. Or being able to identify where needed finances are to cover medical expenses or the deposit on nursing care when it is needed can make a difference to the quality of your relative’s life.
Being prepared can offer you and your relatives confidence about their options for whatever the future brings, even if it feels confronting at first. It can also make difficult times a little bit less challenging, should the worst case scenario occur. While there are a range of tools offered by State trustees and government websites like MoneySmart to help with budgeting and estate planning, you may also find speaking to experts like financial advisers and lawyers can help.
Is planning your finances to help aged relatives part of your next smart move? Speaking to a financial adviser could help.
This information is current as at 024 July 2018. Prepared by BT Financial Group, a division of Westpac Banking Corporation, ABN 33 007 457 141 AFSL and Australian Financial Services Licence 233714. This information does not constitute financial product advice.