9 topics to consider for clients with aging parents

Are your clients becoming concerned about their aging parents' finances? Discuss these 9 important topics to help them feel more prepared.

If your clients belong to the sandwich generation, they’re likely bearing some degree of financial responsibility for their parents or in-laws. As the number of individuals caring for aging parents continues to rise, financial professionals must give significant thought to how they can best guide their clients through this challenging life phase. Being a caregiver for elderly parents can be both emotionally and financially stressful. By demonstrating genuine empathy and understanding and having thoughtful conversations, financial advisors have an opportunity to set themselves apart in the industry. Here are 9 important topics to consider covering in your discussions so your clients feel heard, valued and prepared for the road ahead.

1. Encourage open communication in the family

Encourage your clients to have open discussions with their parents about their finances, and to set expectations early on where necessary. Determine if their parents already have a financial advisor, and whether they’re comfortable sharing pertinent information with their children. Following the right processes and ensuring the appropriate safeguards are in place can help provide clarity and prevent family squabbles later on.

2. Plan for the costs of long-term care

While out-of-pocket caregiving expenses ranged from $7,200 to $10,525 in 2021, the cost of a private room in a nursing home can exceed more than $108,000 per year on average, according to the 2021 Cost of Care Survey by Genworth.

It’s important to factor these costs into your clients’ financial planning and compare various options such as assisted living, in- home care or other forms of support. Take the time to guide your clients through the potential financial implications of each choice and strategize with them accordingly.

3. Discuss final wishes such as funeral arrangements

Urge clients to find out about their parents’ final wishes. Encourage them to engage in frank conversations about wills, trusts and funeral arrangements, even if it feels uncomfortable. Although end-of-life planning can come with some anxiety, preparing in advance can ensure a smooth transition and avoid unnecessary financial burdens during an already challenging time.

4. Get the necessary documents together

Inquire whether your clients have documented their parents’ financial information, including account numbers and the contacts for lawyers, accountants and other relevant professionals who oversee their affairs. Having all this readily accessible and in one place can provide clarity and alleviate stress later on.

Examples of important documents to get together include property deeds, bank accounts, life insurance policies, power of attorney and account/device passwords. If your clients need more specialized assistance, refer them to an estate planner or an eldercare attorney if necessary.

5. Discuss self-care for the caregiver priorities

Clients who are busy taking care of others can often leave their own priorities by the wayside. Emphasize the significance of taking time for themselves and discuss some ways they can prioritize both emotional and financial self-care. Help them understand the importance of planning for their financial future to ensure their well-being as they navigate the complex responsibilities of caregiving.

6. Discuss long-term care and Medicaid planning

Inquire whether your clients’ parents have long-term care insurance in place. If not, discuss the potential benefits of securing such coverage to protect their assets and ease the financial burden of future care needs. You can also take the opportunity to discuss eligibility requirements for Medicaid planning if their parents do not have substantial assets. Make sure to go over the implications of Medicaid on their parents’ financial situation.

7. Healthcare decision-making

Determine whether your clients’ parents have designated a healthcare proxy or power of attorney who can make medical decisions on their behalf if they become unable to do so. Emphasize the importance of having these documents in place to ensure their parents’ wishes are respected in emergency situations.

8. Go over tax planning strategies

Explore tax-saving strategies related to your clients’ parents’ estate planning and gifting. Discuss with them the potential impact of estate taxes and how to minimize tax liabilities while preserving assets for their loved ones.

9. Determine beneficiary designations

Ensure that their parents’ beneficiary designations on retirement accounts, life insurance policies, and other assets are up-to-date and aligned with their wishes. Encourage clients to have a comprehensive understanding of and ready access to their parents’ estate planning documents.

By addressing the essential questions above, financial professionals can deepen their understanding of their clients unique situations and provide tailored solutions that support the entire family effectively.

Are your clients becoming increasingly concerned about their aging parents’ finances? Check out this financial checklist that could help them feel more prepared.

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