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11175 Cicero Drive
Suite 650
Alpharetta, GA 30022
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| Dear Clients and Friends,
Welcome to The Redwood View, the periodic newsletter of Redwood Wealth Management! We hope to use this forum to provide timely and useful information to our valued clients and associates. The topics will cover all areas of wealth management as well as current issues that might affect you or your family. |
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Steps to Creating 'Financial Cocoon' for Aging Parents, Relatives
The 1985 movie Cocoon features three elderly men who discover a fountain of youth in the unguarded pool on the private estate next door to their retirement community. An alien force powers this fountain. Not only does the force sustain cocooned aliens stored in the pool, but it enables the friends and their wives to stave off aging and the concerns that come with getting older.
Of course, such a fountain of youth has never been discovered . As such, many Redwood clients may find themselves assuming the role of caregiver for their parents or other aging relatives. Fortunately, we at Redwood might be of help in creating a sort of "cocoon" to help alleviate some of the emotional and financial stresses associated with caring for aging parents.
Consider these steps: - Talk with your parents. This may be the most difficult step, but it is essential to understand what your parents envision for their money and the financial resources they have to reach those goals. Spark the conversation with a statement as simple as: "Dad and Mom, I want to carry out your wishes, but I need to better understand them." Possible sources of income may include pensions, Social Security payments, retirement and investment assets, bank accounts, and long-term care insurance.
- Discuss future living arrangements. Are your parents able to live in their current home long term, perhaps with outside assistance? Should they consider moving to a smaller home, a retirement center, a continuing care community, or a family member's home? If so, how soon? Talk with them about their preferences if health problems force them to consider an assisted-living situation.
- Establish a financial power of attorney. A durable power of attorney designates a person to make certain decisions on behalf of someone else if that person is unable to make decisions, usually due to incapacity. If your parent has concerns about losing control, consider a "springing" power that goes into effect only after the parent is unwilling, or unable, to make financial decisions alone. A financial power of attorney, depending on how it is drafted, allows you to pay bills, make investment decisions, or even sell real estate on behalf of your parents.
- Establish a health care power of attorney and living will. The health care power of attorney authorizes an agent to make medical decisions on behalf of someone who is physically or mentally incapacitated. The living will expresses what life-sustaining medical treatment is desired should one become incapacitated. In Georgia, the Advance Directive for Healthcare has replaced the Georgia laws on the Living Will and the Durable Power of Attorney for Healthcare. Like the living will, the Advance Directive gives instructions for withholding or withdrawing treatment. Similar to the durable power of attorney, it allows someone to appoint an agent to make other medical treatment decisions.
- Ensure they have an updated will. Ensure your parents have an up-to-date will that reflects their wishes. Know where the original document is stored.
- Keep track of their financial records. Know where your parents keep their financial records and ensure you have access to them should you need to step in.
- Understand their health-related insurance coverage. Besides Medicare, do your parents have any retiree health care benefits or Medigap coverage? Do they have long-term care insurance in the event they need at-home health care or move to an assisted-living center or nursing home?
Assuming the role of caregiver for parents can be one of the most difficult challenges anyone faces. It is critical to prepare early and have plans in place. Unless, of course, your parents have found the fountain of youth or have joined an alien race that offers the promise of never growing ill or older. |
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We hope you have found something useful in the newsletter. If you feel anything in The Redwood View might be helpful to a friend or family member, please feel free to forward it to them. The professionals at Redwood Wealth Management wish you and your family a prosperous 2010.
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