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How to talk to your aging parents about money

No one wants to talk about what happens if your parents become incapacitated. But avoiding the conversation can leave you in the lurch.

Seven out of 10 adults have difficulty talking openly with their parents about making financial decisions on their behalf if they become incapacitated, according to a 2012 survey by the National Endowment for Financial Education.

But ignoring the conversation can leave you in the lurch if they become ill, outspend their savings or need long-term care.

“Having worked in health care, I really saw how tragic it can be for people that do not have plans in place," says Linda Amato, an estate planning attorney. "And it involves going to court, unfortunately, making a petition for guardianship, which is a very costly and not a very dignified process."

Joan Ruberti and her son Timothy are clients of Amato's. Their advice for children in Timothy's shoes? “Do it early and be succinct and upfront,” says Timothy.

"And I would suggest they try to get the answer from their parents before anything happens to them," advises Joan.

"You could say something like, 'I recently read an article in The New York Times and it talked about how some people really don’t have plans in place,'" suggests Amato. "'And I was starting to think, do I really know how to help you in the event that you became disabled?'"

Other key questions Amato suggests asking:
Do you have a will?
Do you have a living will that spells out your wishes about life-prolonging medical treatments?
If you become disabled, do you want me to hire someone to take care of you?
How do you feel about assisted living and nursing homes?
Who is your financial adviser?
Where are your bank accounts?
Do you feel comfortable giving me passwords to access your accounts in case of emergency?,
Do you feel comfortable granting me or someone else power of attorney so we can handle your affairs if you become unable to?

"The most important thing, in my opinion is, making sure that the parent understands the ramifications of what they’re doing, and also understands, if you’re doing an estate, that their assets are not being taken away from them," says Timothy Ruberti.

"Encourage them that you want to know, you want to be empowered, you want to be able to help them and carry out their wishes," says Amato. "It’s not about approaching them to find out how much money do you have, how much money are you’re going to inherit."

"If you happen to be in a situation where there hasn’t been advanced planning and you’re seeing signs of a parent perhaps not making good decisions, their judgment is off, and they’re starting to give their assets away, then you need to sit down with them, and depending on your relationship, try to approach it in a way that you’re trying to help them. And that you’re not trying to take something away from them," adds Amato.
"Now that you’ve put this estate planning to rest, you realize that there’s a certain budget that she’s currently living under, there’s not a whole lot of question as to what’s going to happen going forward," says Timothy Ruberti. "So everyone can relax and she can enjoy herself."

His mother agrees: " I feel very confident and I feel safe, and I think everything is in order. That’s peace of mind, that’s what it is."

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