As children, we depend on our parents for all financial needs. And many young adults (and grown ones too) still seek financial help or advice from mom and dad. But there will come a time when that assistance will need to be reciprocated back to our parents in their later years.
The key to an effective transition, while preserving the dignity of all involved, is communication.
A recent article in CNBC recently offered advice to adult children and their elderly parents. The article titled “When Adult Children Become Financial Caregivers” suggested six steps.
While I recommend that you read the original article for more detail, the steps are as follows:
- Knowing the Right Time to Talk
- Framing a Sensitive Subject
- Building Trust Through Transparency
- Establishing Sibling Responsibilities
- Maximizing Efficiency
- Planning for an Inherited IRA
The basic principle to bear in mind is that both the elderly parents and the adult children have to assume and understand their evolving roles. This is key for a family transition to move gracefully. This means communication, communication, communication – not only between parents and adult children, but also between the adult children who will be working together on behalf of the family as a whole.
Naturally, this is all easiersaid than done. In truth, there are any number of principles and rules for this transition, but the six from the original article certainly are a helpful start.
For more information about planning issues affecting your elderly parents and how best to handle the
transition to shared financial responsibility, or for answers to your other estate planning or elder law questions, contact us at Peak Legal Group.
Reference: CNBC (June 3, 2013) “When Adult Children Become Financial Caregivers”