Protecting Your Parents’ Finances

Now is the time to get a handle on Mom and Dad's money matters. It could make the difference between a comfortable retirement or tarnished golden years.

the same approach — and has also taken care of her funeral expenses via a life insurance policy. When her longtime companion, Jimmy, passed away in 1996, she began talking more about her financial affairs with her granddaughter, Jayne Cubbage, a television news producer who lives in Philadelphia. Now Cubbage knows everything about her grandmother’s financial status, including the reverse mortgage on her house, her bank account numbers and the location of important paperwork. Cubbage also provides financial support to her grandmother, paying for her phone bills, medical prescriptions or other expenses when necessary. "At age 30, this is a hefty responsibility," Cubbage says. "But I’m blessed. When I look back at all the good things my grandmother did for me, I couldn’t see myself not helping her."

Currently, Darby receives $389 a month from her reverse mortgage and $647 from Social Security. Most of her money goes to pay a variety of bills, including utilities, credit cards, homeowner’s insurance and property taxes on her $200,000-plus home. But Darby also spends $200 each month on things she enjoys — like the ceramics class she takes where she paints figurines.

Recently, Cubbage suggested that her grandmother change her medical insurance. Darby pays $90 a month for coverage obtained through AARP. But Cubbage found a program funded through the state of Pennsylvania, and supplemented by the federal government, that would’ve given her grandmother free coverage. "It wasn’t welfare or charity," Cubbage explains, "but she was just eligible for it." Nonetheless, Darby said no and opted to stick with her current plan. "I didn’t argue with her about it," Cubbage recalls. "I said, ‘Fine, it’s her prerogative,’ because she’s of the mind-set where she can make her own decisions.’"
Cubbage has exactly the proper attitude, according to Bart Astor, author of Baby Boomer’s Guide to Caring for Aging Parents (Macmillan, $15.95). He says if children and grandchildren treat their aging family members with compassion and respect, those elders will be a lot more forthcoming with their financial information.

"I’m definitely comfortable with it," says Darby. "No one my age plans on having to rely on their children or grandchildren, but Jayne’s like a breath of fresh air for me. I just wish more parents and grandparents would stop having the attitude that what’s happening with them is none of their kids’ business. It’s really not fair to the children, because they need to be prepared."

Finding Help for Mom and Dad
Experts recommend that you discuss medical and financial issues with your aging parents periodically. Changes in their health and financial situation, along with new tax laws, could affect how they plan for their future. "We usually wait until our parents get old and feeble — and by that time, there are fewer opportunities to help," says certified financial planner Susan Richards. "It’s never too late."

Richards recommends that grown children ask their parents these 20 questions:

  1. Have you enacted any emergency paperwork? If
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