By Rich Arzaga, CFP®
A conversation with mom and dad about personal and financial matters is not easy for many families. But as parents get older, especially those in their 70s and 80s, we found with our clients that many parents appreciate the assistance of adult children. If this might be the case for you, the next question becomes, what type of support should you consider offering.
Estate Planning Documents
In general, fifty percent (50%) of all families do not have an estate plan. If you are receiving this message, you (and likely your friends and family) probably have complicated enough assets to qualify for needing an estate plan. Further, of the approximate fifty percent (50%) who do have an estate plan, about one-half of those plans are outdated or incorrect, and may likely cause challenges when executing. In short, there is a seventy-five percent (75%) chance your parents’ estate plan is out-of-sorts. Maintaining proper estate planning done is table stakes. You can help by encouraging parents, aunts, and uncles to visit an estate planning attorney. If you need a recommendation, we’re happy to offer you a few names to consider.
Older Americans are subject to identity theft and could use your help. Consider the following:
- Credit freeze. Credit bureaus offer this service. Creating a freeze is no charge. The cost for “Lifting” a freeze for specific credit inquiries is nominal – about $10 per service. My family has employed a credit freeze since this option became available in 2003-2004 and has gladly paid for the Lifts as needed. The credit freeze has been our family’s best approach to help prevent credit fraud. It gives me peace of mind that I have control of legitimate credit queries and new accounts.
- Credit Reports. Review your parent’s credit reports with them to make sure all reported creditors are correct, and to update any other personal information. More importantly, resolve listings of creditors that are incorrect, and consider closing credit that is no longer needed.
- Personal Information. Drivers licenses, State Identification Cards, Passports, and Social Security Cards. Consider securing in one place items that not regularly used. And ask to make copies for your records, then scan and secure these copies with an encrypted electronic service. For our clients, we offer an electronic vault called WealthVision that features encryption standards that exceed those of many banks. If you don’t work with us, ask your advisor if they offer a similar service.
- If not already set up, consider caller-ID for your parent’s home phone. Encourage your parents to let all calls they don’t recognize go to voice mail. This small idea should significantly reduce the risk of telephone scams. This same principal should apply to their cell phones.
- Add a call blocking tool to the home phone. I don’t know of any service that is full-proof, but having something is a step in the right direction. I’m not entirely delighted with ours, so I if you come across one you have had success with, please let me know.
- Your parents need to know the difference between someone they call and someone who call them. If they make the call, they know who that other person is. A person calling them with an emergency should be viewed as suspicious. If this happens, encourage your parents to call you or other family members to confirm or for help. Assure them that asking for a number to call back and waiting to confirm is prudent and safer for all family members. If the incoming caller insists and will not leave their name and number, then ask your parents to encourage them to call 911. And tell your parents about the call my mother-in-law received from a kid who started the call with “Grandma?” My mother-in-law filled in the blank and responded by using my daughter’s name, asking if this was her. Fortunately, she knew my daughter’s voice well enough to hang up. Very upsetting for everyone, but it could have been worse.
- Cell phones, laptops, iPads. Check them all for updates and patches.
- Passwords. Consider strengthening passwords and using a password manager to help your parents manage this. If a password manager becomes problematic (they often duplicate entries and cause confusion), using a password that is a combination of things in their life might be the solution. Example: first house address numbers + second home street name + current home city abbreviation + children’s birth years + the number of grandchildren or pets minus the number of previous marriages!
- Social media. Ask your parents to list for you their various social media accounts and passwords. This idea becomes especially useful as they get too old or unable to use.
Be their advocate. This can include adding yourself to
- conversations with vendors solving problems.
- discussions with caregivers. Make sure to take notes.
- visits with financial advisors. Our most rewarding meeting is with older clients who include their adult children. The synergy can be more productive than a meeting with the parents alone.
- Ask to be listed as a contingent contact on financial accounts. This option is relatively new and required by financial institutions to be offered. Take advantage of it.
If there is any part of this you would like to explore, feel free to contact Cornerstone Wealth Management at 925-824-2880. We are happy to help if we can.