Scary financial tasks to deal with now – News Couple

Scary financial tasks to deal with now

You are reading Entrepreneur United States, an international franchise of Entrepreneur Media. This story originally appeared on NerdWallet

There are some things that no one wants to think about until they have to, like taking care of your parents as they age and knowing what happens to your money when you die. But planning these events now can save you and your loved ones a lot of trouble later.

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The first step is to just talk about the inevitable.

“Think about the people you care about. Would your life be better if you never brought up this topic? Or would everyone’s life improve if you did?” says Lauren Williams, certified financial planner and owner of Worth Winning, a Dallas-based financial planning firm.

“Starting a conversation is a game changer for being able to address these topics,” she says.

Well, your death and your parents’ growing up doesn’t make for light conversation at the dinner table. But there are ways to alleviate each of these uncomfortable topics.

How to Have a Caregiving Conversation

Millennials are currently the “sandwich generation,” says Frank Barry, CFP program president and president and managing partner at PF Wealth Management Group in Oakland, California. This means that they are responsible for raising their children while also thinking about how to take care of elderly parents.

The pandemic may have forced you to have frank discussions with your parents about their health care situation. You can use this momentum to engage with conversations about what kind of care they would prefer later in life, whether it’s moving in with you, going to assisted living or getting home care.

Williams suggests making a list of open-ended questions to get you started, such as “What do you want to happen if you suddenly get sick?” or “How do you see me being a part of your retirement?”

Talk about the resources your parents plan to use to pay for care, says Barry. Do they have a life insurance policy? Are they on Social Security? Do they have a pension? Will they need to consider long-term care insurance? This type of insurance covers chronic conditions, disabilities or disorders. If your parents don’t have it or can’t buy it, you can buy it for them, he says.

Having the conversation allows you to prepare now if you need to start setting aside money for caregiving.

Estate planning for everyone

Contrary to what you might think, estate planning isn’t just for the wealthy. It is also not limited to married people or those with children.

Handing over your assets and handing over your financial responsibilities often involves filing a will, creating an advance healthcare directive if you are incapacitated and even having a separate digital will for your online life that includes login credentials and instructions on what to do. Your social media accounts or assets are like cryptocurrency.

The first simple step you can take now is to log into all of your financial accounts and assign a beneficiary to each. Then you can turn to the bigger questions.

“The work begins with you sitting down and you asking – what do you want to happen if you are no longer around?” Barry says.

Yes, the thought of something bad happening to you can be overwhelming. But creating a detailed estate plan avoids your loved ones having to settle your finances while also grieving your loss. It can also reduce the likelihood of a probate, which is the lengthy legal process of distributing your property after your death.

You can use an estate plan to articulate your desires and priorities, such as appointing a guardian for your children, deciding what happens to your beloved pet, or donating your money to a cause you care deeply about. (Seeking advice from your parents can also start a conversation about their property plan and caregiving needs.)

Williams suggests asking yourself these questions to make the process less abstract:

  • What will happen if you stay in hospital for a while?
  • What if I am incapacitated and have to undergo surgery: Who do I want to make the decision for?
  • Who will pay the bills or walk the dog and I can’t?

If you’ve started writing down your answers, you’ve already taken the first step toward creating an ownership plan. You will need to hire an attorney when you are ready to formally move forward.

This article was written by NerdWallet and originally published by the Associated Press.

The article Scary Money Tasks to Deal with Now originally appeared on NerdWallet.

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