Pattie Lovett-Reid: Managing the finances of aging parents
It is a tough subject, so not surprisingly, nearly two-thirds of Canadians are in the dark about managing the care and finances of their aging parents, according to CIBC.
It is the conversation no one wants to have, even though the vast majority of Canadians with parents over 65 feel it is important to discuss elder caregiving and financial support.
The sad reality is that the conversation will happen, sometimes in a hurried fashion as families deal with a health emergency or unexpected event. Clearly not an ideal situation. With one in six Canadians at least 65 years old in 2015, and the growth rate accelerating as the baby boomer generation ages, elder care and financial planning is becoming a growing issue.
Often, the primary caregiver will be the spouse, but aging boomers expect their adult children to step in. In fact, 31 per cent said they would look to their children to step in and manage their affairs if they became incapacitated due to advanced age, illness or disability. The expectation may be strong, but the execution will be weak.
Here is why: only 43 per cent of boomers have actually discussed or created a family playbook with clear plans and expectations to help reduce emotional and financial strain. When asked why steps haven't been taken to formalize wishes, the responses were what you might expect:
1. They didn't make time for it
2. Don't think they need to
3. Didn't feel they have enough money to warrant a strategy
Don't wait for a catastrophic event to derail your life and leave you scrambling trying to figure out where important documents are, pay bills or to know exactly what dad or mom would have wanted in a given situation.
Here are CIBC’s 5 steps to creating your family playbook:
1. Have the conversation - include all key family members
2. Know where to find key documents and financial assets
3. Write down plans and expectations for caregiving
4. Create a financial plan that considers caregiving arrangement and costs
5. Seek financial and legal counsel about building your estate plan
Now is the time to have the heart-to-heart. A little planning can go a long way and that is a win/win.