Jill On Money: A practical checklist for aging parents

Approaching an aging parent about money, health and future plans takes empathy, since the discussion can touch on control, privacy, dignity, shame, fear and confidence.

A friend recently asked for help after seeing clear signs that her parents were struggling physically and that their affairs may not have been organized. She wanted a simple way to begin the process, so here is a checklist to get started.

Step 1. Start the conversation now

The first discussion may feel intrusive, and parents may push back. Lead with empathy, because the subject can bring up strong emotions about control, privacy, dignity, shame, fear and uncertainty. A gentle opener can help: “I read something about having difficult conversations, and it made me think we should talk about your physical and financial security and what you’d like to happen in the future.”

Step 2. Gather the key documents

In legal terms, discovery means exchanging information before a trial. Here, it means collecting the papers needed to protect your parents and keep their affairs organized. Keep everything in one secure place so siblings can review and update it when needed.

Health and insurance

— Medication lists, including vitamins and supplements.

— Medicare details, including plan types and supplemental coverage. If your parents agree, you and/or your siblings should obtain permission to speak directly with Medicare. Medicare Advantage and Part D plans are private insurers and have their own authorization forms.

— Names and contact information for doctors. If your parents use patient portals, ask for permission to access them so you can review visit results.

Financial information and documents

Get the contact information for any financial adviser or insurance agent. If your parents are comfortable, ask for duplicate statements or online access so accounts can be monitored.

— Bank, investment and retirement accounts

— Automatic payments and payees

— Insurance policies, including life, long-term care and disability coverage

— Housing, land and cemetery deeds

— Mortgage and loan accounts

— Vehicle titles

— Partnership and corporate operating agreements

— Marriage licenses, divorce papers and military discharge forms

— Existing estate documents and the attorney who prepared them

Step 3. Meet with an estate attorney

Hiring a qualified estate attorney is often worth it, especially when the family situation is complicated by a second marriage, estrangement, a family member with special needs, a small business partnership or substantial assets. If the situation is simple, an online service is better than doing nothing.

With the documents in hand, you or the attorney should ask:

— Are you worried about money?

— What would happen if you needed help at home?

— Do you want certain assets, including sentimental items, to go to specific people?

— Are you concerned that heirs may waste their inheritance?

— Do you want to give to charity?

Step 4. Understand the terminology

— Will: Directs assets to beneficiaries according to your wishes and names an executor to carry out the distribution. Without one, state law decides who receives what, and probate court may take time dividing the estate under a preset formula.

— Health care proxy: Names someone to make medical decisions if you cannot.

— Power of attorney: Gives an agent authority to act for you, such as withdrawing money, responding to a tax inquiry or making a trade.

— Letter of instruction: Covers funeral preferences and the handling of remains, which can matter if your wishes differ from family tradition.

— Trusts: Revocable trusts can be changed; irrevocable trusts cannot. Trust assets usually avoid probate and can allow more precise transfers, but they can also add complexity and expense.

— Transfer-on-death accounts: Many institutions allow a beneficiary to be named on non-retirement bank and investment accounts, which generally avoids probate.

Step 5. Share the plan

The executor should receive copies of the documents, along with the names, addresses and Social Security numbers of everyone listed in them, plus contact information for the estate attorney and CPA who will help guide the process.

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Jill Schlesinger is a CBS News business analyst. A former options trader and CIO of an investment advisory firm, she welcomes comments and questions at [email protected]. Visit her website at www.jillonmoney.com.