“A mother can take care of ten children, but sometimes ten children can’t take care of one mother.” This quote comes to mind whenever I discuss this particular topic. When I try to gather these families to take care of Mom or Dad, and take care of their business and affairs, it can be a holy mess if the family cannot work together as a team.
I’m the guy who puts it all together for them, the quarterback, if you will. But I am also an expert in my field. Family members look to me for direction, because if they weren’t looking to me for that, and weren’t paying me for that, they’d be doing it on their own. In my years of experience, doing it “on their own” is not necessarily the best way.
So my ultimate goal is to help people take care of their beloved parent or parents properly, the way their parents unselfishly took care of them.
My Communication Approach
My clients will tell you that I bring up the issue of taking care of a parent well before it is needed. It usually starts with this: “Let’s sit down and talk to Mom and Dad, or as a family if there’s multiple siblings there, and let’s do it soon, before we have to, so that we’re ready.”
While it’s true that Moms and Dads sometimes don’t want to give out their exact dollar amounts, at the very least we’ll need to know if they have credit cards, bank accounts, life insurance policies, IRAs, brokerage accounts and things like that.
All of this feeds back into using the “Financial Inventory Organizer,” (FIO) a template of things to fill in, such as “Where are my accounts?” “Who is my attorney and how can he be reached?” “Who does my taxes?” “Where are my tax returns?” Using a master key approach can be a lifesaver, coupled with: “Here’s where we are and here’s what we need to do now.”
Money is an Intimate Subject
Without FIO, if Mom is rushed to the hospital and becomes incapacitated, we would have to sift through shoeboxes of statements and other things. We might not find everything we need either. We don’t know where her bank accounts and other things are. It’s a mess, and it happens more than you might think. And that’s when the frustration sets in.
Typically, if there are multiple children, and they are the ones taking care of things for Mom and Dad, everybody backs off the line except for one. That person is appointed to do everything. Then, he or she gets frustrated because of doing all the work, or when everyone wants his or her share of the cookie jar, so to speak. They’ll have arguments because deep down they want Mom and Dad to be taken care of, but they also want to make sure there are some “cookies” left over for them. It’s not exactly human nature in all its splendor.
The financial plan and estate plan should be first and foremost on the list of priorities. There are tangible assets, like the house or second home, that must be factored in too. Now that these assets have been accumulated, the priority should be doing the financial plan and the estate plan together with the financial planner.
Usually, when the plan is implemented, I ask them how they feel about talking to their kids about it. The kids may not know any planning documents existed. The parents may have done everything correctly, but when they go into the hospital or pass away, will the kids – the co-executors or co-trustees – even know where the will is? Do they know who has power of attorney? Can they even get their hands on the power of attorney? It’s important.
You don’t have to tell children how much you have, but you need to tell them where to go, and that they should “call Kenny.” I will take the lead at that point to direct them in what to do, how to do it, and where to go – like to the attorney’s office and the accountant’s office for Pennsylvania State Inheritance Tax.
They will especially need to know if power of attorney is enforced so they can draft money out of the account to pay bills, pay taxes and keep the lights on.
Financial Inventory Organizer
I created this booklet 23 years ago and often talked about it on the “Ask the Advisor” radio show with Jim and Jayme Meredith. I couldn’t believe how many calls I got when I did. A simple booklet to record their financial “being” in one place resonated with listeners.
That simple booklet evolved a couple of times. I think I’ve given away at least 1,000 or more because people find it so useful. Today, I give it to clients right away, when I meet them for the first time. I tell them it’s not for me, it’s for them, and I don’t want it back.
What I do want is for them to start putting their stuff together at Hefren – Tillotson, Inc. while we’re doing MASTERPLAN®. I give them some nice document folders to hold and categorize their important documents too.
I encourage them to make copies of the documents and put them in these folders for their kids in case anything ever happens. Once everything is all together and nicely organized, I then suggest we set up a time with their children so we can talk. At the very least, we can say: “Mom and Dad have IRAs … insurance policies, beneficiaries, etc.”
To me, it’s all about preparedness. When something does happen, they will be prepared and know it’s time to “call Kenny.”
If you have questions or concerns, reach out to me here Hefren-Tillotson. I would be happy to talk with you about your situation.