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.
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.
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
Home And Auto 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.
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.