aging parents

Helping Aging Parents with Finances

5 Ways to Reduce Resistance

Managing financial matters is an important part of caring for an older adult.

But it can be tough to convince someone that they need help, even if all the signs are there.

For example, if they’re forgetting to pay bills, making unwise purchases, or getting confused about their accounts, it’s probably time to step in.

But even if they’re having problems, many people are still resistant to having someone get involved in their finances.

To reduce defensiveness, we share 5 essential tips for helping aging parents with finances.

We also suggest specific tasks to focus on to make the new responsibility a little less overwhelming.

  1. Work with them and respect their decisions

If your older adult is still able to manage their finances fairly well, be respectful of their decisions and work with them instead of taking over.

They’ll (hopefully) appreciate your help in executing details like paying the bills every month. And typically, they’ll be more likely to accept additional help when they realize you’re not trying to take away their control.

If your older adult has dementia or a cognitive impairment, you may need to take over and make decisions on their behalf.

But it’s still kinder to make them feel included and in control, even if they can’t manage things on their own anymore.

Work with other family members to make sure everyone is on the same page and they understand that you’re looking out for your older adult’s best interests.

  1. Locate important documents

It’s critical to know where the important financial documents are so you can locate them in an emergency or if your older adult becomes incapacitated.

This allows you to protect your older adult’s assets when they’re not able to take care of things themselves.

Your older adult may be concerned that you’ll use these documents before you have to, so be sure to reassure them that you’ll only use the information in an emergency or when they’re not able to.

Important documents typically include: 

  • Bank and investment statements
  • Wills
  • Insurance policies
  • Pension records
  • Home mortgage or reverse mortgage
  • Car title
  • CPP and OAS payments
  • Safe deposit boxes
  1. Get access to financial accounts

Getting access to your older adult’s bank accounts requires advance planning and likely, some specific paperwork.

Banks and other financial institutions have strict rules about who can access accounts. And sometimes, they require their own documents to be completed even if you already have a Power of Attorney.

To write cheques or withdraw money from your older adult’s accounts, you could become authorized to conduct transactions.

To get access to a safe deposit box, your older adult can authorize a “deputy” or “agent.”

Important: Before signing paperwork or getting joint access to any accounts, consulting with a fiduciary, elder law attorney, financial planner, or other qualified professional is always recommended to avoid unintended consequences.

  1. Keep family informed

Your older adult should stay involved in their financial decisions as long as they can.

But if that’s not possible and you need to take full responsibility, it’s wise to share information with other family members or involve them in the process.

This helps avoid conflicts later, like one person accusing another of inappropriately spending the older adult’s money behind the family’s back.

Holding family meetings to discuss finances is also a good way to keep everyone up to date on spending and income.

It’s also smart to keep a record of significant discussions, decisions, and actions in case there are disputes in the future.

  1. Prepare for the future

If your older adult doesn’t already have a will or estate plan, now is the time to convince them to meet with a lawyer and start the process.

These key legal documents are important because they affect how their assets are distributed when they pass away.

It’s also important to complete other essential legal documents like a Power of Attorney and living will. This allows you to make decisions and take action quickly during a health crisis.  The “living will” has different names depending on the province – Power of Attorney for Health Decisions, personal directive, or healthcare directive.

Need help with your own or your elderly family members financial matters? 

Get in touch with Financial Concierge Inc today to book your complimentary initial consultation.

Posted by Admin-FCI in Money Management

The Challenge of Aging Alone

Aging alone is a challenge many people face. You may be one of them. Most pre-retirees and retirees know that, as they age, there is a single solid support system they can absolutely count on: their adult children. But what happens when they don’t exist?  What happens if they are too busy or unreliable?  What happens if they are prone to helping themselves to your finances?

A solitary old age is, for many, a threatening prospect, something to be contemplated with a mixture of apprehension and outright fear. That’s the bad news.

The good news is that there are strategies which can be adopted to minimize the impact of a solitary old age. You need a multi-faceted “Go it Alone” plan.

The 2011 Census of Population counted nearly 5 million (4,945,000) seniors aged 65 and over in Canada. Of these individuals, 92.1% lived in private households or dwellings (as part of couples, alone or with others) while 7.9% lived in collective dwellings, such as residences for senior citizens or health care and related facilities.

Most people aged 65 and over lived in a couple with either a married spouse or a common-law partner during their early senior years.

2011 Census data showed that about one-quarter (24.6%) of the population aged 65 and over lived alone.  The share of the population that lived alone was fairly low and stable until about the age of 50 for women, and until approximately age 70 for men.  After these ages, the prevalence of living alone increased for both sexes, but more sharply for women.

Older single and childless people are at higher risk than those with children for facing medical problems, cognitive decline and premature death.

Suggestions:

  1. Establish a “virtual board of directors” – a network of friends, financial advisor, daily money manager, lawyer, accountant or other professionals you work with. They can assist you with care and decisions.  Also develop a plan of action if cognitive changes occur.
  2. Expand your social network – for those aging solo, expanding a social network is essential, according to experts on aging. Isolation contributes to depression, cognitive decline and a decline in overall health.

 

Posted by Admin-FCI in Seniors Health and Wellness, 0 comments

Daily Money Management for Aging Parents

Baby Boomers’ Guide

Are you struggling to balance caregiving responsibilities for their aging loved ones with other family responsibilities?

The Challenge – Caring For Your Aging Parents

Caring for an aging loved one is an emotional and stressful situation. Many baby boomers – anyone born between 1946 and 19641 – struggle to manage the needs of their own children and grandchildren, while assisting their aging parents. Also referred to as the sandwich generation, approximately 7.7 million Canadians comprise the baby boomer population.
Trying to balance all the caregiving responsibilities of your family is a daunting task and can greatly impact your own quality of life. Managing the financial affairs of an aging parent is a major component in the caregiving process. Today, many baby boomers are alleviating this financial stress through daily money management services.

Daily Money Management for Aging Parents

What does a daily money manager do?

A daily money manager (DMM) brings clarity and order to an individual’s daily management of personal bills, budgets and record keeping. A DMM assists clients with activities such as bill paying, day-to-day banking, budgeting, insurance paperwork, and organizing records and receipts in preparation for income tax filing.

Who needs the help of a daily money manager (DMM)?

For vulnerable older adults, management of daily financial obligations can become an overwhelming burden, quickly spiraling into adverse behaviors and at-risk situations such as unpaid bills, un-deposited cheques, and the terrifying consequences of cut-off utilities, bank foreclosures, evictions, and financial exploitation.

An experienced daily money manager (DMM) can provide day-to-day personal financial services for elderly parents, giving peace of mind to children that their parents’ financial affairs are being taken care of properly and professionally.
Hiring a DMM may allow some seniors with health challenges to avoid guardianship and a complete loss of independence.

What sorts of tasks do DMMs typically handle?

In addition to bill paying, day-to-day banking, budgeting, and records organization, many DMMs are experienced with handling government and other insurance paperwork. This service eliminates the stress and confusion that often comes with these tasks, offering seniors and their families increased peace of mind. Also, a DMM can be a vital link to help senior citizens access community resources they may not even have known existed. Many DMMs are very knowledgeable about social support services for seniors.

If a senior can maintain independence with assistance in managing their financial affairs, they can continue to age in place versus going into a care facility. For the $5,000 a month charged by a care facility, you can arrange and hire an awful lot of service to be delivered in their own home – such as personal care, meal preparation or delivery, transportation to and from social activities and appointments, home maintenance, house cleaning, grocery shopping.

If I hire a DMM for myself or my parents, do I/we still need an accountant, financial advisor, lawyer, social worker, or geriatric nurse?

Daily money managers are not typically financial planners or advisers. They will interact on your behalf if requested with accountants, lawyers and other professionals.

How frequently do DMMs generally visit their clients?

Daily money managers understand that each client has different needs so visits are scheduled based on the tasks being performed, and the individual’s goals and availability. A client who needs help paying bills due to dementia issues may receive weekly visits from the DMM while another client may only see the DMM face-to-face occasionally because the statements and bills are managed online or because the type of work they are assisting with does not require as much time. When establishing a schedule, DMMs take into account the client’s needs, costs and time.

Does hiring a DMM involve giving up control of my or my parents’ money?

Absolutely not. A DMM’s role is to offer a “best of both worlds” scenario, where the clients retain control of their money but are freed from the responsibility of executing daily financial tasks. In many instances, DMMs work closely with the client’s financial advisor – assisting the advisor with the implementation of the client’s financial plan at the hands-on level. In this sense, a DMM’s role is to help clients, with their advisors, maintain control and independence.

Does hiring a DMM result in loss of independence in any way?

No. In fact, a DMM can help individuals keep their independence longer by assisting with all facets of personal financial affairs. Trouble staying on top of personal financial affairs is often the first sign that a senior may be becoming overwhelmed with the responsibilities of independent living. By removing that issue from the situation, DMMs are often instrumental in helping individuals remain independent for longer.

What should I expect the services of a DMM to cost?

Some DMMs offer a free initial consultation — ask in advance for their policy on first meeting charges.
Most DMMs charge for their services on an hourly basis, with rates around $150 per hour. Rates may vary greatly based on factors such as geographic location and type of service provided.

In addition to the hourly rates, most DMMs charge for their travel time and possibly for out-of-pocket expenses such as postage stamps provided to their clients and long distance charges for calls made on a client’s behalf.
Be sure that you understand the billing arrangements before the work begins.
Some DMMs request payment at the time of service and others bill on a monthly or bi-weekly basis.

How can I locate a DMM in my area, or near where my parents live?

You can find a DMM in your area by visiting www.aadmm.com and clicking on
“Find A DMM,” which allows you to search by province, city or postal code. Individuals
are also often able to find a DMM through a referral by a lawyer, accountant or social worker.

How do I know I can trust this person to whom I would be providing so much sensitive information?

AADMM members are expected to adhere to a strict code of ethics and standards of practice. AADMM promotes excellence in services through a voluntary certification program that emphasizes both experience in the field and continuing education. Certified daily money managers, called Professional Daily Money Managers (PDMM), must also submit to criminal background checks.

What questions should I ask when I interview a prospective DMM?

The type of work DMMs handle for their clients is highly personal and confidential. Whereas your personal judgment and instincts are important in determining the honesty of any professional with whom you may do business, you can take additional steps to safeguard yourself against becoming involved with a dishonest person.

First, ask for a referral from someone you know and trust, such as a friend, relative, lawyer, accountant, or doctor. If none of these people can put you in touch with a DMM and you must hire a basically “unknown” person, be ready to address the following issues before hiring a DMM:

Top 10 Questions to Ask When Hiring a Daily Money Manager

  1. What types of services do you provide? (Do you only do bookkeeping, or are there other
    ways that you can be of assistance?)
  2. How long have you been working as a daily money manager?
  3. What kinds of professional liability or Errors and Omissions insurance do you have?
  4. Are there industry standards and code of ethics to which you adhere?
  5. Are you willing to work with other advisors, for example, my financial advisor, tax
    accountant or attorney?
  6. What are the costs of your services and what are the common billing methods?
  7. How often do you usually visit your clients and what do you charge for travel, if anything? Would it be possible for you to assist me remotely, if necessary?
  8. Do you require and/or provide a contract?
  9. What about confidentiality?
  10. Can you provide a reference list?

A reference list should include two or more clients or their family members and at least one professional; it may include a personal reference. Take the time to call the references on the list, asking them whether the DMM is: respectful, dependable, efficient, empathetic, and professional in manner. Ask if there have been any conflicts, and if so, how they were resolved. Find out if asking for explanations of things not understood has been a comfortable situation.

Posted by Admin-FCI in Money Management, 0 comments
How to Choose an Executor: 5 Tips to Help Seniors with Estate Planning

How to Choose an Executor: 5 Tips to Help Seniors with Estate Planning

Choosing the right executor is essential for your senior’s estate planning.

An essential part of estate planning or creating a will for you or a senior in your life is to choose an executor – someone who will execute (carry out) their wishes after they pass away. Making an informed decision on who will fulfill that role will help them feel confident that their wishes will be fulfilled and family conflict will be minimized.

What does an executor do?

In Alberta, the correct legal term for an executor is “Personal Representative.”  We use the word “executor” because it is generally the term people are most familiar with.  An executor is responsible for making sure a person’s last wishes regarding their property and possessions are carried out. They are responsible for making sure that any debts and creditors are paid and that the remaining money and property are distributed as the senior in your life wish.

An executor doesn’t need to be a lawyer or financial professional, but the law requires them to fulfill their duties with honesty and diligence and in good faith – it’s called doing their fiduciary duty.

An executor is entitled to compensation from the estate for their time.  This fee is typically outlined in the will. If not, the acceptable range is 3 – 5% of the estate value.

Learn more about Financial Concierge’s Estate Administration services.

5 Tips to Help Seniors with Estate Planning

1. Choose someone with a good head on their shoulders

The person your senior chooses as their executor doesn’t have to be a financial whiz, but they should have basic knowledge of how to manage finances. Also, it’s better if they tend to be conservative when it comes to managing money. They should also be comfortable with researching and asking for help from experts, as there will probably be duties that they won’t be familiar with.

2. Make sure the executor will be there to do the job and have backups in case they can’t

It’s critical that the executor is present and capable of administering the estate. If the person is in poor health or is the same age as the senior or older, they might not be alive or healthy enough when it comes time to administer the estate. That’s why it’s often better to choose someone younger than the senior to fill that role. Of course, life is unpredictable, so it’s a good idea to name a backup executor, called a successor.

The successor will take over if the first choice executor is unable to do the job. Your senior can name the successors, or they can opt to let their top choice executor name a successor. They can also choose a third party, like a business that provides this service, as executor.

A good rule of thumb is to choose an executor, one or more backups (named in order of succession), and have a third party executor as the final backup.

3. Understand the pros and cons of third-party executors

It’s essential to understand the trade-offs when naming a bank or financial service company as executor. First, a third-party can only fulfill their duties if their business is still around – so the company has to outlive the senior. Second, the fees you’ll need to pay them to execute the will or estate will typically be more than what you would pay an individual. Third, a bank or trust company executor will be impersonal in how they handle the administration of the estate. There will probably be different people involved over time, and there may be inflexible policies they must follow to protect their company from liability.

You may wish to consider Financial Concierge Inc. as our fees are lower, our services are personal and we work with you, in-home whenever possible. Interested in partnering with Financial Concierge for your, or a senior’s in your life, estate administration? Contact us!

4. Being named executor is not an honour – it is a huge task and responsibility

Some estates have a lot of assets and/or take a long time to administer. In this case, your senior may want to choose two (or more) people to act as co-executors. The reason being, if there are tough decisions to make or a lot of work to be done, it won’t all be left to one person. However, having more than one person in charge can lead to conflict.

For example, if children are all named equally as co-executors, it can cause tension or fights. Even if all the children are currently in agreement about how the assets are divided, issues can come up when it’s time to administer the estate. Your senior would be better off trying to prevent family conflict rather than “being fair” to their children. If there’s a lot of potential for conflict, a third-party executor may be the best option.

5. Review choices regularly and make changes as needed

Things can change over time. Your senior’s top choice for an executor today could be an unwise choice two years from now. It’s good for them to review their decisions regularly, especially in times where there’s a significant life change.

Significant life changes include, a divorce in the family, someone becomes estranged, or family members reconcile, etc. In the case of a blended family or second marriage, a third-party executor is often a good choice because they are neutral and unbiased.

Need help with your own or your elderly family members Estate Administration? 

Get in touch with us today to book your complimentary initial consultation.

 

Posted by Admin-FCI in Money Management, 0 comments