How to Start the Family Caregiving Discussion

Becoming a caregiver to a family member or loved one may occur at some point in your life, whether due to unexpected circumstances or old age. If you already are a caregiver or know someone who is, you may have some stories about how overwhelming it can be—emotionally and otherwise. Caregiving requires love, time, and patience, but the financial aspect of caregiving often doesn't get the proper attention it needs. Discuss this side of caregiving with your financial professional, who can offer you various resources and guidance to make things easier. These 11 tips can also help you manage your loved one's finances more effectively. 1. Talk About It Now Before It’s Too Late We must prepare for the unexpected, which means having a financial discussion with the person you are caring for in advance. While discussing money with them can seem complicated, it doesn't have to be. As a current or future caregiver, you need answers to some key questions. Let your loved one know that it's in their best interest to address these things now: Has your loved one saved money? If so, how much? What's their source of income? Do they have investments or insurance policies? Who is their financial professional/attorney/CPA? Do they want to live in an assisted living home or prefer to live at home? Have they planned for elder care (or can they pay for it)? Do they have long-term care insurance? Discussing these things when the aging parent is healthier and able to make decisions can make it easier for you to take action when the time comes. 2. Review Estate Planning Documents Find out if your loved one has prepared estate planning documents, and ensure that their will and power of attorney are current. A living will and health care proxy are critical estate planning documents to take care of immediately. They entail how you should handle medical treatment while your loved one is still living but can no longer express their health care wishes or make medical decisions on their own. Again, the best time to do this is while all parties are healthy and of sound mind. But if that time passes, it should still be a priority; it's never too late to get these in order. 3. Keep Financial Documents Organized and Accessible Necessary documents, such as wills, powers of attorney, investment statements, insurance policies, and bank account statements, should be reviewed, updated, and kept in a secure, accessible place. Ensure they are all kept together in one place with relevant passwords. 4. Know What’s Important to Your Loved One Generally, a caregiver's top priority should be to do what their loved one wants. For that reason, take the time to talk with them about their preferences for receiving care. Is it important to them to not be a burden on their children? Are they okay with living in an assisted living or nursing home? Would they rather live at home? Another option is to ask your loved one to write a letter expressing their desires and reasons. While living wills or health care proxies often cover wishes and instructions, they don't cover feelings. A personal letter can remind you of the sentiment behind your loved one's wishes. While you, as a caregiver, may not be able to fulfill all their wishes, you can still make the best possible decisions for them. Knowing what your loved one wants also helps you understand and empathize with them. 5. Seek Professional Advice When planning for your loved one, you should seek two types of professional advice – financial and legal. Ask your financial professional to recommend an attorney for legal consultation (and a tax professional for tax advice, if necessary).

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There are many misconceptions when it comes to estate planning. People miss out on the chance to preserve wealth in their family because they think they are too young to start planning an estate or need more assets. The reality is that any of us can pass unexpectedly, and having a plan helps our loved ones honor our legacy and navigate through the period after our death with more direction. Let's discuss the difference between an estate and a will, when to start planning, and items to consider. Estate vs. Will: Understanding the Differences Estate plans and Wills seem interchangeable, but they serve different purposes. A Will outlines your wishes for distributing your assets after your passing, while an estate plan encompasses a broader spectrum of considerations. An estate plan can include a Will, but also covers aspects like healthcare directives, guardianship for minor children, and strategies for minimizing taxes. When to Start Estate Planning Many individuals wonder when the right time is to start estate planning. The answer is simple: as early as possible. Life is unpredictable, and waiting for significant life events to trigger estate planning can lead to complications. If you're getting married, becoming a parent, acquiring substantial assets, or starting a business, it's time to create an estate plan. Don't delay; the peace of mind that comes with knowing your affairs are in order is invaluable. How Often to Update Your Estate Plan Creating an estate plan is not a one-time endeavor; it's an ongoing process. Changes in your life circumstances, financial situation, and even laws and regulations can affect the effectiveness of your plan. Reviewing and updating your estate plan every 3-5 years or after significant life events is recommended. Keeping your plan current ensures that it accurately reflects your wishes and the current legal landscape. Accounts and Financial Assets Your estate plan should encompass all your financial assets, including traditional accounts and digital holdings. Documenting your account information and login credentials is essential for your beneficiaries to access these assets. Failing to account for digital assets can lead to valuable resources being lost or inaccessible. Property and Heirlooms The sentimental value attached to specific properties and heirlooms can complicate estate planning. Strategies like gifting, trusts, and detailed instructions ensure these items are passed down smoothly without causing family disputes. Balancing financial implications with emotional connections is vital to preserving your legacy and your family's harmony. Business Succession Planning Business owners have unique considerations when it comes to estate planning. Without a proper business succession plan, the future of your enterprise could be uncertain. Addressing questions of who will take over, how ownership will transition, and how the business's stability will be maintained is crucial. A well-thought-out business succession plan protects not only your legacy but also the livelihoods of your employees.