With seniors living longer than ever, a greater number of us are fortunate enough to have one or both parents in our lives for a lot more years. But there’s a flip side to this scenario: it also means that a significant percentage of us are facing the prospect of having to provide mom or dad some type of financial assistance, whether because of costly medical bills, property tax hikes, or other unexpected financial hardships. Whether you’re a member of the sandwich generation faced with the prospect of supporting parents and kids, or simply facing the reality of mom or dad in need of help, there are some key factors to consider before making any type of commitment.
First and foremost, it’s critical to begin with an open an honest conversation that gives you all the information you need to clearly assess your parents’ finances. This should include:
- All account statements on income and cash equivalents, including checking, savings, IRA, and other money-holding accounts;
- Current information on any outstanding debt or liens;
- Up-to-date information on any automatically-withdrawn payments, such as those to debtors or charity organizations;
- Any other miscellaneous financial commitments associated with home or car ownership, etc (exterminator contracts, excise tax)
These kinds of exchanges are often difficult for both sides. If tension or awkwardness gets in the way, step back and regroup. Consider bringing in a neutral party to facilitate – a family lawyer, financial planner – even another family member who might be able to diffuse tension and move the conversation along.
Regardless, once you (and your spouse) are clear on what your parents’ needs are, you should strongly consider consulting a financial expert who can advise you on what you’re able to contribute – particularly long term. Whether through an estate lawyer, elder law attorney, tax advisor, or financial planner – or combination of all four – you should seek an array of advice that helps you decide on a plan that’s realistic and prudent.
Because your parents’ financial needs are apt to change as they age, you might also consider enlisting the help of a geriatric care manager who can aid you in projecting healthcare and other caregiving costs going forward.
Want more information? Money Magazine has some helpful suggestions for how to approach the issue.