As parents get older, they may need assistance with things like yard work, home maintenance, and so on. Often, they’d benefit from a helping hand with financial matters, too. By taking action now, you may prevent problems from arising down the road. Here are five proactive ways to help.
1. Make sure their wills are up-to-date
Many people make a will and go years — even decades — without looking at it. Let your parents know it’s worthwhile to review their wills. Any births in the family, deaths, or changes in marital status may affect the naming of beneficiaries. Some inheritances may need to be adjusted, perhaps because of changes in your parents’ assets or the beneficiaries’ financial status. Or perhaps the named executor or contingent executor is no longer available or suitable.
2. Ask about insurance
It’s important to find out if your parents have any life and health insurance. If either parent has life insurance, you as well as their executor or lawyer should know where the policy is kept. If your parents have health or long-term-care coverage, they should inform you or the person with power of attorney for health care. If they need to make a claim, they may be unable to do so themselves.
3. Find out about power of attorney
Your parents should have continuing power of attorney for financial affairs, known as a mandate in Quebec, and a power of attorney for health care. It’s important that these documents be signed while your parents are of healthy mind. Reassure them that it’s not difficult and it’s not an age-related request. Anyone of any age can suffer a stroke, sudden illness or accident that leaves them unable to make decisions for themselves.
4. Discuss estate planning
There’s no need to get specific about their estate plan, but do find out how much your parents know about estate planning. They may need help from an advisor. With professional advice, they’ll be able to estimate and manage their estate’s tax bill, find out if they should name a corporate executor, and make sure distribution of their assets won’t create conflict among beneficiaries.
5. Educate your parents about senior fraud
Every year, many Canadian seniors fall victim to well-planned fraud schemes, with losses often running into tens of thousands of dollars. Tell your parents to be wary of any mail, email, phone call or personal request for money or their personal information. These communications may appear to come from legitimate sources — like the Canada Revenue Agency (CRA), a contractor, or a utility provider. Urge them to contact you if they’re at all suspicious.
One of the most effective ways to encourage your parents to undertake key tasks like updating their will, assigning power of attorney, or creating an estate plan is to lead by example. In other words, make sure your own financial house is in order as well.