While some people  don’t look forward to getting older, it’s a natural part of life. And although  it’s inevitable for everyone, there’s not always a clear path when it comes  to making major life decisions. So even a little guidance and preparation from  family members can go a long way. Here are a few suggestions to help you and  your loved ones discuss and organize their finances and other important  documents.

Evaluate And Start The Conversation Early

There’s not always a  “perfect moment” to have conversations about finances. But it’s a good idea to get ahead of it sooner than later. Your parent(s) might be fully  independent now, but down the road they might need some extra assistance. Plus,  you’ll want to discuss these matters while your parents are still healthy and mentally capable. After all, they should have the final say in how their affairs are taken care of.  

 Here are four ways to help your parents complete their estate planning documents.

Gather Information About Accounts And Key Contacts

When the time comes,  you should discuss things like who has access to financial accounts, who is  the power  of attorney, and where they'd  like to live as they get older. It’s in everyone’s best interest to start collecting these important details. No one wants to be scrambling in an  emergency! And if your parents haven’t made a will yet, now is the time to get the ball rolling. Being prepared is key.

Power Of Attorney

Most people don’t like thinking about worst-case scenarios, but the alternative is being stuck without a plan. This is why you need to discuss choosing a power of attorney.  Simply put, a power of attorney (POA) is someone who’s appointed to make financial or legal decisions on your parents behalf while they’re still alive but aren’t capable of handling their own affairs. Having a POA makes it crystal clear who’s in control so there’s no room for interpretation – or lengthy legal battles.

Executor

Another thing to talk about is deciding who will take care of any outstanding matters after your parents pass. This is where an executor comes in. An executor is someone who’s responsible for making decisions on your parent’s behalf once they’ve passed away. If no one is named executor before your parents die, the courts will appoint an administrator to execute their wishes. And this person may not be someone they would have chosen. So, it’s in their best interest to name an executor that they trust.

Collect Important  Documents

Sometimes elderly people store things in unusual places. Does your mom or dad use a safety deposit box, a safe, or keep special things in their underwear drawer? If you are responsible for looking after them, make sure you’re aware of where they keep important documents. And if possible, make extra copies for yourself to have on hand to be prepared. You never know when you might need to have them readily available!

 Examples Of important  Documents: 

  • Bank and brokerage statements    
  • Home, auto and life insurance policies
  • Pension records
  • Home mortgage or reverse mortgage
  • Wills    

Learn more about how to talk about  wills: guide to discussing end-of-life wishes with family

       

Home And Auto Insurance

Home Insurance

If they move to a  condo or downsize their belongings, they’ll need to notify their insurance provider to update their policy. If they’ve gotten rid of or accumulated any valuables, they need to make sure it’s updated on their home policy.  

Auto Insurance  

As for driving, if  they decide to only drive in the summer or are driving less mileage annually,  have them contact their insurer to notify them of these changes. If they are  only driving part of the year and keep their car in storage, they could switch  their auto coverage over to comprehensive  while it’s in storage (this option isn’t available in Quebec).

 If your parents live  in Ontario, another thing they should know is that once they reach 80 years they  have to renew  their driver’s license every two years. At the renewal session they will  be asked to complete a vision assessment and a five minute exercise. They may  also be asked to complete a road test, provide additional vision information,  or provide a follow up from their doctor. If you are concerned about their  driving ability, maybe speak with their doctor (if you’re authorized) before  taking away the keys. Keep in mind that being able to hop in the car enables  seniors to maintain their lifestyle and provides a sense of independence.  Don’t assume that just because they’re elderly that they can’t drive safely.

Dealing With A Loved One’s Insurance Policies After They Pass Away

Even though it’s hard  to think about, it’s a fact of life that your parents are eventually going to  pass away. Ultimately, insurance is a contract. It’s best to be proactive and  have a will that outlines who has authority to manage their estate and  property – including cancelling policies.

After death, the  insurer may need to see proof of executorship and a death  certificate. If you’re a named insured on their policy, you may be able  to cancel the policy yourself with the required documentation. But it’s best  to figure out what’s needed ahead of time so that it’s a smooth process  during what can be a difficult time. If you’re feeling overwhelmed at this  stage, try making short to-do lists. Hopefully this helps! 

Keep in mind, just  because someone dies doesn’t mean their insurance should be canceled  immediately. When someone passes, their policy should continue until their  property (house and/or car) is under new ownership. If a home policy is  cancelled right after the owner dies and something happens (like a house  fire), there would be no coverage and the estate and property may not get  reimbursed for the damage.

Learn more about how  to deal with someone’s insurance policies after they die.

Discuss Long-Term Care Decisions Early

Do you know if your  parents have plans to live in a nursing home or active retirement community? Or,  maybe they want to stay put in their own home with a caregiver? There are  many options to consider when figuring out what will meet their needs. Ultimately,  it’s their decision where they want to live. But starting the process early  will be a huge relief.

 In terms of finances,  ask your parents about how they intend to pay for everything. They may have  long-term care insurance or money set aside for their care. If they do have  insurance, review the policy, and find out if there are any requirements if  you need to help them submit a claim. Remember – transitioning into a new  home is a big deal for anyone, so be mindful of how your parents might be  feeling.

While these types of  conversations can be awkward to have, it’s important to be open and honest  with your family. After all, the main focus is that their wishes are  respected and honoured. Take a sensitive approach when discussing these  matters so that everyone is comfortable with any changes being made.  Hopefully, it leads to everyone having peace of mind.