6 Financial Questions to Ask Your Aging Parents Now - TheStreet

NEW YORK (MainStreet)—When Dennis Healy's mother-in-law was diagnosed with a progressive lung disease that left her home-bound, he found himself in the middle of a major family dilemma unsure of what to do.

"Most of us know our parents may need help someday but we're never quite prepared when that day comes," Healy said.

Providing care for an aging family member is now the number one family-related legal concern, according to new research. ARAG found that the level of concern is up 5% since last tracked in 2007 about the fact that 70% of people will need some form of long term care at some point in their lives while 65.7 million people in the U.S. were unpaid family caregivers to an adult or child in 2009.

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Healy contacted a patient advocate through his legal plan at work.

"The advocate was able to walk through the situation with us and set expectations," Healy said. "The family regained some control once they knew what options they had. Talking about possible scenarios in advance can help ease stress and ensures that everyone knows the options."

Caregiving legal plans can be a low-cost way to prepare for a long-term care event for yourself or for your parent. Typically available as an employee benefit, plan members have access to patient advocates at an affordable rate which can help minimize stress and provide a greater sense of control.

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Families may want to take proactive measures like learning about options that provide assistance in these situations. Long-term care insurance which pays for long-term care is more difficult to find and often very expensive. Some companies combine life insurance with long-term care insurance, but the benefit paid depends on what is needed. For example, Prudential introduced a new rider that allows PruLife Universal Protector policy holders to use the death benefit to cover costs associated with a chronic or terminal illness.

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"The BenefitsAccess rider pays up to 2% of the death benefit a month if a licensed health practitioner determines you are unable to permanently perform two of the six acts of daily living," said Mark Hug, executive vice president of Individual Life Insurance at Prudential. The six acts of daily living include eating, bathing, dressing, toileting, walking and continence. But discussing elder care with parents who are still able bodied can be a touchy subject. Below are six questions to ask to start a dialogue:

  • 1. What is your parent's financial situation? This includes knowing where checking and savings accounts are held as well as where any financial planning documents are stored that may provide instructions for a long-term care situation.
  • 2. Does your parent have a Durable Power of Attorney? This document gives someone else decision-making power if the parent becomes incapacitated. Everyone needs to know who can write checks for your parent and who is responsible for paying bills and managing finances when the parent can no longer do so.
  • 3. Does your parent have a Healthcare Power of Attorney? A POA designates a person to make medical decisions if the parent is unable to do so however it's important for the designated POA to know the parent's preferences.
  • 4. Does your parent have an advance directive in place? Unlike a Healthcare Power of Attorney, an advance directive outlines a person's wishes about medical and life-sustaining procedures. Who has been named and does he or she know the parent's wishes?
  • 5. Is there a plan in case the parent becomes incapacitated? Ideally, the parent has written preferences as to where he or she wants to reside and will have executed some financial planning to manage the possibility of assisted living or skilled nursing care at home.
  • 6. Is there a will? While this can be one of the toughest questions a person asks a parent, simply knowing where it is located and who is responsible for managing the estate can save everyone some stress.

--Written by Juliette Fairley for MainStreet