Conversations about caregiving, retirement income and estate planning need to start early, and they need to be ongoing to prevent misunderstandings. It’s really that simple.
A national study conducted by Fidelity Investments has some good news for aging parents that is paired with some simple advice. The adult children in the survey are willing to help support and care for their parents, but what form that help will take and what kind of responsibilities the kids are taking on needs to be made clear for the changing relationship to work for everyone.
Fidelity’s most recent Family & Finance report surveyed two members of each family—one parent and one adult child—on things such as retirement income, eldercare and estate planning. The results found that about 40% disagree on the roles children should play as parents age.
Money’s recent article, “Here’s What Your Aging Parents Say They Want You to Do for Them,” says that these kinds of mismatches can create major emotional and financial problems down the road. Families should not wait until a health crisis or other unexpected event demands a caregiving or financial planning conversation; it is far better to have these conversations in advance of any triggering events. One clear finding on financial support for parents was that while over 90% of parents who responded said they wouldn’t like to become financially dependent on their children, only 30% of children shared that view, and about 25% are already planning to support their parents financially.
There were other expectation differences with financial assistance tasks. About 70% of parents expect that at least one of their children will help manage investments and retirement finances, and about the same percentage thought the kids would pitch in on household expenses, budgeting, and bills. However, 36% of children didn’t know they were expected to handle investments, and 44% were unaware their parents wanted help with household budgets.
The big reason children are clueless when it comes to what their parents expect is the simple fact that their parents have never told them. That’s a problem. There are many reasons why parents might choose to give responsibilities to one child over another, like location or having a particular skill set that makes them better qualified to handle certain roles. However, if that person doesn’t know the plan, they won’t be prepared, which could be problematic. It could mean a lack of access to paperwork, delays, confusion and extra expense—not to mention poor care.
Most of the adult children in the survey said that they had never had a conversation with their parents about long-term care, estate planning or even where important documents—like wills, power of attorney, healthcare proxies, etc.—are located. Children whose parents are healthy and active seniors may find it hard to imagine their parents aging and incapacitated, but having these conversation and a game plan well in advance will make these issues far less trying for all concerned.
Including adult children in meetings with your estate planning attorney can clarify important issues and soften some of the emotional discomfort that these conversations might create.
Reference: Money (June 28, 2016) “Here’s What Your Aging Parents Say They Want You to Do for Them”