Our Retirement Pty Ltd
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What your children should know

What your children should know

   

Why Should Your Parents Plan?

Your parents will enjoy their old age or their retirement better by being financially secure.

Planning in advance will enable your parents to:

(1) ensure appropriate people step in to handle their financial and health-care decisions upon their incapacity and death without court intervention, such as guardianship or probate proceedings,

(2) minimize unnecessary administrative burdens and costs after the death of a spouse,

(3) minimize taxes,

(4) maximize their retirement income and provide for the time when there will only be one,

(5) preserve their assets - especially if they have to enter a nursing home or aged car facility, and

(6) distribute assets to their loved ones in a manner that minimizes disputes and protects the inheritance from creditors, predators, and divorce.

 

How Can You Encourage Your Parents to Plan?

Starting the discussion is the most difficult step. Parents may not want to discuss end-of-life planning because they consider the subject an invasion of privacy or morbid.

Children may be reluctant to bring the subject up because they do not want to be perceived as greedy or anticipating the parents’ deaths.

Although both parents and children feel the need to communicate, they may not know how to start.

These ideas may help:

Initiate the conversation together with your siblings. Generally, parents should not have the conversation with only one child. Sibling rivalry persists into adulthood. To avoid the appearance of undue influence, you should run the idea by all your brothers and/or sisters before starting a discussion with parents. Where possible, your parents should discuss their plans at a family meeting.

If your parents already have a financial plan, you could suggest that they have a third party review it. A fresh pair of eyes may bring new ideas and suggest ways of doing things that you had not thought of.

If your parents do not have a financial plan, start by discussing health-care directives. Discussing end-of-life health-care decisions does not require discussing assets. Let the parents know it is important for them to authorize someone to communicate with their medical providers, to make medical decisions for them if they are unable to, and to express their wishes regarding life-sustaining care. Once the dialogue is started, it often leads to closer discussions.

 

What about mental health?

Does it decline with age, offsetting the gains made in physical health and longevity?

Can it be maintained?

Can it improve?

A review of the literature suggests that cognitive decline is not universal, pervasive, or irreversible.

Being closest to your parents, you are in the ideal position to notice any changes in their mental health.

Any deterioration in a person’s mental health will have important implications on how their investments will be managed in the future.

 

Determine incapacity.

Incapacity is a triggering event for those closest to your parents to step in and it is best that this point is legally determined by your doctor(s).

Your parents may choose to have others make the determination for them. If this is the case you must make sure that all legal liabilities are covered. See your solicitor. 

 

Discuss with your parents how they would like to spend their final days.

Your parents may want to die at home and/or may not want life-prolonging measures to be taken.

If this is important, make sure that you have the legal requirements in place and that there will be someone on hand who is qualified to make sure that your parent is given every opportunity to pass peacefully.

  

How can we help?

There are ethical considerations to keep in mind.

It is important to remember that the clients in any discussions will be your parents.

An adviser or a child could be held accountable for undue influence.

Because your parent's interests are the ones being served, it is important that they meet with a financial planner on their own at some stage during the conversation(s).

From our experience, we have found that the best time to do this is at a separate meeting soon after the family have had discussions around these topics.

Being specialists in retirement planning, we have first hand experience in assisting clients in times like this.