The Covid-19 pandemic highlighted the importance of healthcare funds and emergency funds, especially for families, specifically when it comes to millennials with aging parents. Most of these funds require long-term planning, consistent efforts and deposits. If you haven’t started saving or investing, you need to start today before it’s too late.
Why planning for your parents is important
Many financial experts feel that millennials are different from other generations because they have a role in the financial aspect of their aging parents. They strongly suggest that millennials must know their part in their parent’s retirement and healthcare. You should be aware of their life insurance policy, Social Security and pension. Be mindful of the details and what might happen if they need medical support that isn’t in their insurance. You can also help them to improve their retirement plan, emergency funds or pension.
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Financial planning for your parents
Handing down their assets and you taking over their financial responsibilities requires:
1. Making a will.
2. Creating an advanced healthcare directive.
Having a digital will can include login credentials and instructions on what to do with accounts or digital assets like cryptocurrency. If you haven’t done any of those mentioned above, you can start by designating a beneficiary for every financial account.
Though it will be unpleasant to think about what would happen if they are not here, creating a detailed plan for their financial matters will reduce the chance of probate — the lengthy legal process for sharing property after they depart.
With an estate plan, they can make their preferences and wishes clear. It could be choosing the guardian for their children, deciding what happens to the pet or donating money to a cause. You can also have a conversation with your parents about this as financial experts suggest you have clear answers to these questions:
- Who should the hospital call if they are admitted?
- Who should make decisions if they are incapacitated?
- Who should pay the bills and take care of the rest of the family?
Once you have clear answers to the questions, you can hire a lawyer to officially move forward and be ready legally.