What Financial Resources Are Available?
Recognizing the very real possibility that your parent will need to set aside funds for additional care and medical costs in the future, may be difficult. It is important to understand what financial shape they are in. Take a look at their income, the bills and any other expenses they have to pay. See if the cash they have to work with and the income they have coming in is at risk of running out. Do they own their own home? Would they be willing to sell? Are they renting? How significant is their nest egg and could they afford care if they needed it? What private medical plans do they have access to and what will it cover?
Potential alternatives could be moving them with yourself or another family member who can care for them or exploring government-subsidized care at a facility. Keep in mind both options will likely require discussion and coordination to make the transition for your parent as smooth as possible. Consider the long waiting lists for subsidized care in a facility. If your parent is not on a list- years in advance, it may not be there when you need it.
Are their Financial Documents Organized and Up To Date?
You will also need to confirm if they have updated their beneficiaries on investments and insurance statements as well. The same goes for their will. It is a good idea to create a summary of all of their investments so that it is easier to understand where they stand financially at a glance. List all of the financial professionals on your summary sheet, including names and phone numbers so you can easily get in touch with them should you need to followup.
Have They Fallen Behind on Their Taxes?
Do you have the type of parent who likes to file their own taxes or do they work with a tax professional?
Get in contact with CRA or their accountant to determine if they have fallen behind. Keep in mind a number of investments, such as pension and RRIF income don’t deduct taxes at the source so unless they request taxes to be deducted at the source they are likely going to owe taxes at the end of each year. Your ageing parent could also be missing out on receiving certain government benefits associated with not filing their taxes as well.
Resist The Temptation to Put Off the Conversation Any Longer
Of course, talking to your parent about taking over managing their finances won’t be easy. And you may come up against several roadblocks before they are truly ready to have the conversation. Yet not talking about it won’t make it any easier. In fact, the longer you wait may mean fewer options for your ageing parent. Breach the subject by asking opening ended questions or offering to take the burden of paying the bills off their shoulders as a first step. Keep the conversation going and enlist the services of a financial professional to support you in this process.