Money conversations make a lot of people feel uneasy, but it’s definitely a conversation that needs to be had with aging parents. Estate planning with aging parents is best done in advance.
Take it from someone who had to learn the hard way. As the caregiver for her parents, Kay Bransford was tasked with getting their finances in order. Although they thought they were prepared, when it came down to it, they weren’t and the task after they passed away was more challenging than it needed to be.
This experience inspired Kay to write her best-selling book called “MemoryBanc® Your Workbook for Organizing Life”. She is also a professional money manager who helps families manage cash flow, bill payments, and protect against fraud.
In this episode, Kay guides us through the necessary preparations for legacy planning. She explains the pros and cons of setting up a joint bank account, a trust, and power of attorney. We also raise awareness about the common money scams older people fall for.
Learn more about navigating estate planning with aging parents, spouses, and blended families.
Facing Challenges
Aimed at managing day-to-day finances and aiding with scam prevention for seniors and families, MemoryBanc has grown into a lifeline for individuals needing support in handling their financial affairs.
Kay Branford is no stranger to the struggles of navigating financial affairs for aging parents. Her own parents had meticulously planned their financial future, but as their cognitive health declined, managing their numerous bills and finances became a labyrinth for Kay and her siblings. This shift prompted Kay to revamp MemoryBanc’s services, catering to the real, day-to-day needs of families and seniors navigating financial complexities amidst health challenges.
Adult children face many challenges when trying to support aging parents. Kay emphasizes the importance of approaching these situations delicately, maintaining an adult-to-adult relationship, and offering help without assuming control or diminishing their autonomy.
Another challenge Kay shares with listeners is with financial institutions—they are often reluctant to accept power of attorney documentation promptly, despite having legal paperwork in place. She advises listeners to navigate these challenges by seeking alternative methods, such as setting up online access, to manage finances effectively on behalf of aging parents.
Joint Bank Accounts vs. POA
What about joint bank accounts?
There are many complications that come with joint bank accounts. While adding a name to a joint account ensures immediate access to the assets upon the owner’s passing, it also means that the added individual shares ownership. This joint ownership could lead to legal complexities in the case of lawsuits or claims against that person.
To navigate these challenges, Kay recommends setting up a power of attorney (POA) instead of joint account holdership. Being a POA allows an individual to manage the account without ownership claims, simplifying account management and minimizing legal risks. Kay clarifies that banks typically provide a specific power of attorney form for such purposes, enabling swift access and authorization.
Delicate but Effective Communication
Kay emphasizes the importance of approaching parents delicately to avoid triggering fear when discussing access to bank accounts or legal matters. Instead, she suggests initiating conversations by asking parents for advice or discussing recent events involving someone they know, making it conversational and less demanding. Kay stresses the human aspect, recommending a compassionate approach to understand the parents’ needs rather than directly asking for access or control.
Open-ended questions are most helpful, Kay advises. Focus on future scenarios, such as discussing potential injury or loss of a spouse. Gently explore your parents’ preferences and plans for such situations. Kay emphasizes the significance of framing these discussions as casual conversations, enabling parents to express their desires without feeling pressured.
Financial Affairs for Blended Families
The complexities of managing finances when dealing with step-parents and blended families is a common scenario in today’s generation. In situations when parents might be remarried with or without step-siblings involved, Kay suggests initiating a conversation with the parent directly. She advises asking the parent about their current financial arrangements, especially concerning bank accounts, to understand how they manage their money. In many cases, Kay explains, each spouse might have separate joint accounts or individual accounts for specific expenses.
She recommends asking about the division of financial responsibilities between the spouses and how they handle their accounts. This conversation would help in understanding how to offer support or get involved if needed, especially considering the different adult children involved from previous marriages. It’s an opportunity to ensure that both spouses have clarity on financial matters and that the children’s inheritance wishes are respected.
It’s important for parents to involve their children in these discussions because the financial arrangements in blended families can be intricate and challenging to navigate without proper understanding or guidance. This approach allows for transparency and clarity, reducing potential complications or misunderstandings in the future.
Protect Your Assets with a Trust
Understanding state laws and planning strategies is also critical, especially concerning wills and trusts. Kay emphasizes the importance of knowing state laws, particularly in scenarios like divorce or distributing assets, suggesting that consulting an attorney becomes crucial. For better control and asset protection, Kay suggests using trusts.
Not reserved exclusively for the wealthy, Kay explains that a trust allows individuals to determine how their money should be managed in case of incapacity or when they can’t communicate their wishes. Contrasting it with a power of attorney, she highlights that a trust provides more control and specific rules for asset usage, offering protection and clear guidelines, both during life and after death.
Christina agrees that a trust isn’t solely for the wealthy but serves as a mechanism to protect assets and ensure they’re distributed according to one’s wishes. Consulting an elder law attorney to understand the legal implications and intricacies of setting up trusts can be helpful, especially regarding asset management during periods of incapacity.
Don’t Forget to Prepare Your Own Children, Too
As we help our parents plan and manage their finances, we can’t forget about the flip side of family preparedness—caring for adult children as they age. There are some essential steps parents should consider to ensure their adult children aren’t overwhelmed if something happens. To avoid potential accessibility issues that could come with storing important information in a safe, Kay advocates for openly sharing usernames, passwords, and account information with family members, keeping them informed about financial details and accounts’ whereabouts.
Kay shares her family’s approach—maintaining a comprehensive list of account details and financial structures for easy access in case of emergencies. Regular updates and discussions about financial matters within the family are encouraged. Departing from the past generation’s culture of secrecy surrounding money matters, adults are now shifting towards openness about finances.
Finding a Trustworthy Agent
Unfortunately, not all families have trustworthy individuals to handle financial matters. In these instances, Kay suggests carefully selecting and naming reliable persons who could assist. Kay and Christina highlight the significance of this transparency, stressing the need to prepare and entrust responsible individuals to step in and manage financial affairs if required.
Sometimes, there exists concern about adult children attempting to handle their parents’ financial matters prematurely or without proper authorization. Although such occurrences exist, their involvement typically happens from a different perspective. Kay explains that many individuals, especially those without children or with complicated family dynamics, often seek professional help from services like MemoryBanc to manage their finances.
Kay shares experiences where they’ve been hired by individuals who don’t have someone reliable to manage their affairs or families who anticipate complications with their adult children. Sometimes, adult children might resist professional help initially but later appreciate the support when faced with overwhelming financial responsibilities due to their parents’ health crises.
Kay expresses her satisfaction in situations when MoneyBanc could eventually transition the financial responsibilities back to the adult children after organizing and streamlining the affairs. It is rewarding to work alongside families and facilitate a smooth transition of financial matters back into their hands, relieving the burden and ensuring a cleaner, organized situation for the family to handle.
Be Proactive
If you haven’t done this recently—or ever—sit down with your partner and compile essential data like passwords, financial details, and contacts. A clear financial roadmap will be helpful down the road.
To help adults with this, Kay created a valuable resource, the “Do It Now” kit available on MemoryBanc’s website. This resource is designed to help individuals organize essential information efficiently. It comprises passcodes, financial outlines, and key personal information, serving as a practical tool for couples to streamline this process in about an hour.
Managing possessions and heirlooms passed down through generations can be complex. Christina shares her experience of sifting through family belongings to identify significant items worth preserving for future generations, acknowledging the challenge of downsizing while ensuring the preservation of cherished family treasures.
Kay and Christina discuss the need for proactive communication within families, advising adult children to check in on elderly parents and offer support in managing digital platforms and bureaucratic procedures to ensure smooth transitions in times of need.
Open Dialogue About Scams
Safeguarding elderly family members against online scams can be daunting. Kay emphasizes the severity of these scams, labeling the perpetrators as criminals. Together, she and Christina discuss the efforts of organizations like AARP in educating and raising awareness about financial scams targeting seniors. She recommends incorporating discussions about these scams into family conversations, emphasizing that victims might feel ashamed or hesitant to report such incidents. It’s crucial to create an open environment for sharing any concerns without judgment.
Christina reiterates the need to reassure elders that falling for these scams isn’t their fault, as these criminals are exceptionally skilled at deceiving people. The importance of support and assistance in such situations should not be understated, and Kay encourages a non-judgmental and helpful approach to tackling these fraudulent activities targeting the elderly.
Repriorment, Not Retirement
Kay’s work has provided valuable information and support for so many families and aging adults. Kay cites her work with MoneyBanc as her most significant professional achievement since turning 50.
When asked about where she sees herself in a decade, Kay shares her perspective on retirement, expressing a reluctance towards the idea. She preferred the term “repriorment,” aiming to maintain meaning and purpose in her life by continuing to aid families and ensuring those around her have the necessary tools for a fulfilling life.
See Kay’s full episode here:
Join our community at www.LivingAgelessandBold.com
See all of our podcasts at https://christinadaves.com/living-ageless-podcast/
Listen on your favorite platform and make sure to subscribe.
Watch and subscribe on YouTube
And if you love it, please leave a review!