Welcome to our new Blog!
While everyone is concerned about business these days... we felt our first blog post should be on a topic about one of our greatest treasures... our parents.
Excerpt from our June/July 2009 Newsletter
Why it’s necessary to discuss finances with aging parents...
Talking with aging parents about their finances can be emotionally taxing for them — and you. They’re likely grappling with tough decisions that force them to confront their own mortality, such as who will receive their assets when they’re gone and who will be in charge of their estate. You’re likely grappling with the same thoughts. But with some advance planning — and a lot of sensitivity and respect — you can help your parents manage their emotions and their finances.
To help ensure your parents’ financial stability, take time to discuss: Long-term care insurance. These policies help cover what your parents’ health insurance policies and Medicare won’t, such as assisted living arrangements, nursing home residence and long-term home care.
Reverse mortgage. Under this arrangement, a lender makes payments to your parents for their home’s equity, and the proceeds generally are tax free. The loan isn’t due until they sell the home or die. The bank obtains ownership only through foreclosure.
Medicaid. This is a government-assisted, welfare-like program for individuals with a low net worth. To qualify, your parents must have depleted virtually all of their assets. Ownership interests. If your parents have ownership interests in a family business, there are several options available to transfer those interests to their heirs, including a gifting program or an installment sale. Or they can do more sophisticated planning, such as setting up a grantor retained annuity trust, which allows them to receive annuity payments and offers potential tax benefits.
While your parents are of sound mind, encourage them to appoint a trusted individual as their power of attorney to make decisions about their finances when they’re unable. Although your parents may initially think of appointing you or one of your siblings to fill the role, that may not be the wisest path to take. Many families can attest to the fact that asking one child to take on the power of attorney can pit otherwise loving brothers and sisters against each other. Although it may be more costly to have a professional advisor to fill the role, it may be the safest route to take.