Dollars & Sense Blog Series

How to Build a Financial Plan with Aging Parents

By Brooke Gais, CFP®
Vice President, Wealth Advisory

Discussing finances with aging parents can be challenging, yet it’s one of the most important conversations families need to have. Creating a financial plan ensures that your parents’ wishes are honored, their needs are met, and potential family conflicts are minimized during difficult times.

This guide provides a structured approach to get your financial planning “ducks in a row” when helping aging parents.

A Starter Checklist for Financial Planning with Aging Parents

1. Last Will & Testament

The fundamental legal document outlining how assets should be distributed upon death is essential for every adult, especially seniors.

• Names heirs to assets (homes, vehicles, pets, financial accounts)
• Designates the amount or percentage to be given to each heir
• Names a guardian for any dependents under their care
• Should be updated every few years or after significant life events
• Will be submitted to a probate judge for enforcement

Family discussion point: Has the will been recently reviewed? Do they know where the original document is stored? Who is the executor?

2. Advance Directive

These legal forms guide future medical care and are often state-specific. They become crucial when parents can no longer communicate their wishes.

• Living Will specifies desired medical treatments and end-of-life care
• Do Not Resuscitate (DNR) orders if applicable
• Medical Power of Attorney designates someone to make healthcare decisions if they’re unable to do so
• HIPAA authorization forms allowing access to medical information

Family discussion point: Who should serve as the medical decision-maker? Have their wishes regarding life-sustaining treatment been documented?

3. Medicare Coverage

For seniors 65+ and certain disabled individuals, understanding Medicare coverage is essential:

• Part A: Pays for hospital stays and inpatient care
• Part B: Pays for outpatient care and doctor visits
• Part C (Medicare Advantage): Combines Parts A+B and often includes prescription coverage
• Part D: Prescription drug coverage
• Medigap/Supplemental policies to cover what original Medicare doesn’t

Family discussion point: Are all parts of Medicare coverage optimized for their specific health needs? Are there gaps in coverage that need addressing?

4. Long-Term Care Insurance

LTC insurance covers services not typically covered by regular health insurance, which can protect assets from being depleted by care costs.

• Covers nursing home care, home health care, adult daycare, and 24/7 supervision
• Review premiums, policy details, and fine print to ensure coverage is understood
• Understand elimination periods, benefit triggers, and exclusions
• Consider alternatives if not insured, such as Medicaid planning

Family discussion point: Is there an existing policy? What assets are available for care if needed?

5. Financial Accounts

Compile comprehensive information about financial resources and how to access them:

• Retirement accounts: 401(k)s, IRAs, pensions, HSAs
• Taxable brokerage accounts and investment holdings
• Bank accounts: checking, savings, CDs
• Credit cards that may need to be paid
• Real estate holdings and related documents
• Lines of credit, HELOCs, reverse mortgages, personal loans
• Social Security benefits and payment information

Family discussion point: Is there a complete inventory of accounts? Are beneficiary designations up to date? Who has access to online accounts?

6. Taxes and Other Debt

Understanding existing tax situations and outstanding debts helps prevent surprises:

• Upcoming and previous years’ tax returns
• Property taxes and any payment plans
• Potential tax liabilities that family members should be aware of
• Outstanding debt obligations and their terms
• Recurring bills and how they’re currently being paid

Family discussion point: Have taxes been filed for the current year? Is there a system for organizing tax documents?

Creating a Central Information Repository

Once you’ve gathered this information, organize it in a secure but accessible way:

• Consult professionals based on specific needs (CPA, Financial Planner, Estate Attorney)
• Keep copies in secure locations that appropriate family members can access
• Create an “In Case of Emergency” folder with essential information
• Consider a digital vault or password manager for online account information
• Maintain a contact list of key advisors (financial advisor, attorney, doctors)

Next Steps

Building a financial plan with aging parents isn’t a one-time conversation but an ongoing process:

1. Start with small discussions rather than overwhelming marathon sessions
2. Involve appropriate family members to ensure transparency
3. Review and update information at least annually
4. Respect your parents’ autonomy while providing necessary support
5. Document decisions and keep records of important conversations

By taking these steps, you can help ensure that your aging parents’ financial affairs are in order, their wishes are respected, and that you’re prepared to assist when needed.

Remember: The goal isn’t to take control, but to collaborate on a plan that honors their independence while providing the support they need. One of the core services we offer to clients is hosting customizable family meetings.

Please reach out to our team if you would like to learn more about this service we provide to our clients.

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