While some people 听don鈥檛 look forward to getting older, it鈥檚 a natural part of life. And although 听it鈥檚 inevitable for everyone, there鈥檚 not always a clear path when it comes 听to making major life decisions. So even a little guidance and preparation from 听family members can go a long way. Here are a few suggestions to help you and 听your loved ones discuss and organize their finances and other important 听documents.
Evaluate And Start The Conversation Early
There鈥檚 not always a 听鈥減erfect moment鈥 to have conversations about finances. But it鈥檚 a good idea to get ahead of it sooner than later. Your parent(s) might be fully 听independent now, but down the road they might need some extra assistance. Plus, 听you鈥檒l want to discuss these matters while your parents are still healthy and mentally capable. After all, they should have the final say in how their affairs are taken care of. 听
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Gather Information About Accounts And Key Contacts
When the time comes, 听you should discuss things like who has access to financial accounts, who is 听the , and where they'd 听like to live as they get older. It鈥檚 in everyone鈥檚 best interest to start collecting these important details. No one wants to be scrambling in an 听emergency! And if your parents haven鈥檛 made a will yet, now is the time to get the ball rolling. Being prepared is key.
Power Of Attorney
Most people don鈥檛听like thinking about worst-case scenarios, but the alternative is being stuck without a plan. This is why you need to discuss choosing a power of attorney. 听Simply put, a power of attorney (POA) is someone who鈥檚 appointed to make financial or legal decisions on your parents behalf while they鈥檙e still alive but aren鈥檛 capable听of handling their own affairs. Having a POA makes it crystal clear who鈥檚 in control so there鈥檚 no room for interpretation 鈥 or lengthy legal battles. In Ontario, this document would be part of your advance care plan.
Note: In BC, a power of attorney for personal care is called a Representation Agreement and is also part of an advance care plan.
Executor
Another thing to talk about is deciding who will take care of any outstanding matters after your parents pass. This is where an executor comes in. An executor is someone who鈥檚 responsible for making decisions on your parent鈥檚 behalf once they鈥檝e passed听away. If no one is named executor before your parents die, the courts will appoint an administrator to execute their wishes. And this person may not be someone they would have chosen. So, it鈥檚 in their best interest to name an executor that they trust.
Collect Important 听Documents
Sometimes elderly people store things in unusual places. Does your mom or dad use a safety deposit box, a safe, or keep special things in their underwear drawer? If you are responsible for looking after them, make sure you鈥檙e aware of where they keep important documents. And if possible, make extra copies for yourself to have on hand to be prepared. You never know when you might need to have them听readily available!
听Examples Of important 听Documents:听
- Bank and brokerage statements 听 听
- Home, auto and life insurance policies
- Pension records
- Home mortgage or reverse mortgage
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Learn more about how to talk about 听wills: guide to discussing end-of-life wishes with family
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Home And Auto听Insurance
鈥Home Insurance
If they move to a 听condo or downsize their belongings, they鈥檒l need to notify their insurance provider to update their policy. If they鈥檝e gotten rid of or accumulated any valuables, they need to make sure it鈥檚 updated on their home policy. 听
Received a property as inheritance? Learn more about what to do next 鈫
Auto Insurance 听
As for driving, if 听they decide to only drive in the summer or are driving less mileage annually, 听have them contact their insurer to notify them of these changes. If they are 听only driving part of the year and keep their car in storage, they could switch 听their auto coverage over to 听while it鈥檚 in storage (this option isn鈥檛 available in Quebec).
听If your parents live 听in Ontario, another thing they should know is that once they reach 80 years they 听have to . At the renewal session they will 听be asked to complete a vision assessment and a five minute exercise. They may 听also be asked to complete a road test, provide additional vision information, 听or provide a follow up from their doctor. If you are concerned about their 听driving ability, maybe speak with their doctor (if you鈥檙e authorized) before 听taking away the keys. Keep in mind that being able to hop in the car enables 听seniors to maintain their lifestyle and provides a sense of independence. 听Don鈥檛 assume that just because they鈥檙e elderly that they can鈥檛 drive safely.
Dealing With A Loved One鈥檚 Insurance Policies After They Pass Away
Even though it鈥檚 hard 听to think about, it鈥檚 a fact of life that your parents are eventually going to 听pass away. Ultimately, insurance is a contract. It鈥檚 best to be proactive and 听have a will that outlines who has authority to manage their estate and 听property 鈥 including cancelling policies.
After death, the 听insurer may need to see proof of executorship and a . If you鈥檙e a named insured on their policy, you may be able 听to cancel the policy yourself with the required documentation. But it鈥檚 best 听to figure out what鈥檚 needed ahead of time so that it鈥檚 a smooth process 听during what can be a difficult time. If you鈥檙e feeling overwhelmed at this 听stage, try making short to-do lists. Hopefully this helps!听
Keep in mind, just 听because someone dies doesn鈥檛 mean their insurance should be canceled 听immediately. When someone passes, their policy should continue until their 听property (house and/or car) is under new ownership. If a home policy is 听cancelled right after the owner dies and something happens (like a house 听fire), there would be no coverage and the estate and property may not get 听reimbursed for the damage.
Learn more about how 听to deal with someone鈥檚 insurance policies after they die.
Discuss Long-Term Care Decisions Early
Do you know if your 听parents have plans to live in a nursing home or active retirement community? Or, maybe they want to stay put in their own home with a caregiver? There are 听many options to consider when figuring out what will meet their needs. Ultimately, 听it鈥檚 their decision where they want to live. But starting the process early 听will be a huge relief.
听In terms of finances, 听ask your parents about how they intend to pay for everything. They may have 听long-term care insurance or money set aside for their care. If they do have 听insurance, review the policy, and find out if there are any requirements if 听you need to help them submit a claim. Remember 鈥 transitioning into a new 听home is a big deal for anyone, so be mindful of how your parents might be 听feeling.
While these types of 听conversations can be awkward to have, it鈥檚 important to be open and honest 听with your family. After all, the main focus is that their wishes are 听respected and honoured. Take a sensitive approach when discussing these 听matters so that everyone is comfortable with any changes being made. 听Hopefully, it leads to everyone having peace of mind. 听
