FAmIlY FINANCE hAVING “ThE TAlk” WITh YoUR

Rachel: We don’t like to think about it, but one day our parents are going to pass away. Sure, that’s a downer of a topic, but it’s reality, which means that you absolutely need to talk with your parents about their financial future.

You might experience what my dad calls Powdered Butt Syndrome: Your parents changed your diaper, so they might have difficulty taking financial direction from you. But you’re doing them a huge favor. You’re making sure you know their wishes, so you can do your best to grant them. In the end, this should be a comfort to both them and you.

dave: One of the most important topics is life insurance. There are basically two types: term and whole life. With term insurance, you have a policy lasting a set term, like 20 or 30 years. It carries a low premium, and it is there for protection, so your family will have money if the insured person dies. Whole life and similar types are marketed as investments, but I do not recommend them for anyone— there are better ways to invest your money for wealth building. Life insurance’s only job should be to replace your income in the event of your death, which is vital if other people are depending on it. When you talk to your parents, make sure they either have term life or that they have enough money in savings to cover expenses. If they don’t, take them to an insurance professional to evaluate what they need.

Rachel: You should also bring up their will. The last thing your parents want is for the state to determine how their hard-earned money gets div ided. But with no will, that ’s exactly what will happen. Ask anyone who’s been in that situation, and they ’ll tell you what a mess it creates—it causes confusion w ithin the family and leads to siblings who refuse to talk to one another. How crazy is that?

Make sure you communicate that this isn’t about you getting “your money.” It’s about making sure that their wishes are met for how their estate is distributed. W hile you’re at it, draw up your own will!

dave: Next, ask if they have long-term care insurance, which ty pically covers nursing homes, assisted-liv ing facilities a nd in-home care for seniors. Ever yone 60 years old and older needs it—no exceptions. Overlooking this critical piece of their financial plan can be absolutely devastating to your parents’ retirement nest egg.

Years ago, I tried to persuade an older friend to get long-term care for himself and his wife. He didn’t take my advice, and a year or so later, his wife was diagnosed with A lzheimer’s. At that point, it was too late for her to qualify for coverage. The cost associated with living with Alzheimer’s

write your own will

Visit womansday .com/makeawill to fnd out what you need to do so your own children are clear on your wishes . for a decade or more is several hundreds of thousands of dollars. Unfortunately, his situation is not unique: Research shows that 7 out of 10 seniors will require some form of long-term care.

Rachel: Lastly, I recommend a “legacy box.” This is a simple box or drawer in which your parents put everything you need to take care of their estate when they’re gone. It should include insurance documents, a copy of the will, keys to a safety deposit box, online passwords and so on.

Also, make up your own legacy box. You can’t imagine how much having every thing in one place will help your family during a sad and stressful time if something happens to you. In fact, this whole discussion comes down to one thing: being prepared. And the effort is totally worth it. It’s a final gift of love to those you care about.