Nobody wants to talk about what happens to your finances when you’re no longer able to maintain them. Regal Investment’s H. Ken Heise explains how to start the difficult conversation.
What a relief, this time it’s not about the birds and the bees! No, this time it’s about mom and dad’s later years: what plans they have made for where they will live, the care they wish to receive, and who will make those decisions if they are not able to make them on their own.
You thought that the birds and the bees talk was tough to prepare for! The Financial Reality Check Study of 2011 discovered that 90 percent of Americans have not discussed key long-term care topics with their spouses, children or parents.
When should this “talk” take place? The best time is NOW, because it can become too late very suddenly. If you delay and a health or lifestyle event suddenly happens, many choices and options regarding living arrangements and health care will no longer exist.
All parties that should be involved in this “talk” are reluctant to initiate the discussion. Parents don’t want to burden the kids or give up control of their lives. Kids don’t want the parents to think that they are trying to nose into the parents’ business.
The truth is that all parties in the conversation benefit, and are kept from having to make difficult decisions regarding the well-being and health for the people they love the most.
Repeated studies have shown that 70 percent of people age 65 or older will need long-term care services at some point during the remainder of their lives.
Most people prefer to receive this care in their home, if it is a viable option. The home may need to be made more accessible, with changes made to the bathroom, doorways and perhaps stairs.
Even with home health care and other assistance, the increased cost becomes expensive. The cost for a licensed home health care aide can range from $13 to $19 per hour. Care in an assisted living facility is $38,000 to $43,000 per year. A private room in a nursing home can cost more than $81,000 each year. Yes, there needs to be a financial plan to address these potential costs.
In addition to the “talk,” there are some legal issues that need to be discussed and addressed with the family members, a trusted financial advisor, and the parents’ attorney.
The discussion with the attorney should pursue the advisability of an up-to-date will, durable power of attorney for property and health care, revocable living trust, and any other documents deemed by the attorney to support and assure that the wishes of the family are carried out.
Parents, first have the discussion with each other. There are most likely many options and choices regarding your future years that you should consider and talk about. Have meetings with your trusted financial and legal advisors – they have the benefit not only of technical knowledge, but also experience working with families that have faced situations similar to yours. If your personal situation is somewhat complex, you may want to invite other family members to join you in these meetings.
It would be naïve to think that all families and their members exist in perfect harmony with each other. It may take several attempts to get through this “talk” with family members. Perhaps you won’t cover everything, but just getting a start will place you far ahead of where you are today.
You may want to revisit the “talk,” as time and circumstances cause your situation to change. New or additional choices may become available to you. Hesitation and procrastination are not your friends. Give your situation serious thought. Prepare for and have “The Adult Talk.” Your family will love you even more for your initiative and planning.
H. Kent Heise, AEP, CLU, ChFC, is a Registered Representative offering securities through Regulus Advisors LLC. Member FINRA/SIPC. Investment Advisory Services offered through Regal Investment Advisors, LLC., an SEC Registered Investment Advisor. Regulus Advisors and Regal Investment Advisors are affiliated entities. Visit their office at 124 N. Water St., Ste. 306, in Rockford.