Some Things I Wish I Told My Dad About Finances

In 2014 my father was diagnosed with Lewy Body Dementia, which is the second most common type of dementia after Alzheimer’s disease. Little did my family know the difficult road that would lie ahead to provide my father with appropriate care as the disease continues to progress. As a financial advisor, I find comfort in being able to alleviate the stress my mother has had managing their finances through this difficult situation.

My father never liked to seek outside help with his personal finances. But five years ago, while he was still well enough to make his own decisions, he brought me down to his office in the basement to go over his accounts in case his health were to diminish. At the time, I was a trader on Wall Street and knew very little about how a retiree should manage their finances. But if I knew what I now know, this is what I would have told him on that day.

For Your Family’s Sake, Consolidate
The binder my father used to keep track of his accounts was always up to date and accurate. But as I thumbed through the graph paper with numbers carefully penciled in, I noticed that as time went on the pages weren’t as detailed and the time between entries was further apart. I didn’t know it at the time, but this was one of the earliest signs of his cognitive issues. When his condition worsened and I took over managing the accounts, there were checking and savings accounts at several banks, CDs reinvesting at almost no interest, paper savings bonds stashed away with no copies stored online or in another physical location, and a portfolio which had very little direction comprised of investments that were collected over the years that were never revisited to determine if they were still suitable.

We have since consolidated these accounts and come up with a portfolio that reflects their current needs. At any time, my mother has online access to a snapshot of her accounts where she can see everything in one place. This has given her great peace of mind.

Dust Off Those Estate Plans
It isn’t uncommon for a young family to establish their estate plans when they get married or have their first child and never revisit them again. This is a mistake. I cannot emphasize enough how important it is to have a durable power of attorney with clear direction. The power of attorney has been an important tool in managing my father’s finances. His will and health care proxy will take a lot of the difficult decisions away from our family. We are able to spend our time with him and focus on providing him with the best quality of life that we can, knowing what his wishes are.

Long-Term Care Isn’t Cheap, So What’s the Plan?
The cost of long-term care can easily dwarf the cost of attending a four-year university. We spend years planning how we are going to pay for our children’s education, but very little time is spent on how we will manage the cost to maintain our own quality of life in our later years. Long-term care insurance isn’t always feasible but if added to the picture, it can be an extremely valuable tool. In most cases, some form of it should be considered sooner rather than later as policies become more cost prohibitive as one gets older. My father does not have a long-term care policy and it would have made the planning process easier.

Can Anyone Help Pay the Bills?
In addition to long-term care insurance, other options to subsidize the cost of long-term care include Medicaid, VA benefits, and certain supplemental insurance policies. These were all areas that we explored after my father was already sick and in the early days it took time away from getting him the proper help. Understand these programs and policies before you actually need them to see if they will be available to you. Even if you are eligible, the paperwork can be overwhelming and it is better to be prepared.

Work With the Pros
Talking to your children about your finances and wishes in case your health were to decline is a great first step, but have a team of professionals and their contact information available for your family members so they can step in and do the heavy lifting when needed. A financial planner can act as the quarterback for your family and work between you and the other professionals that you entrusted. I was fortunate to work with my family’s estate attorney and accountant to guide me through the planning process. A geriatric social worker or elder care consultant could also be a valuable resource.

Nobody wants to think about the possibility of losing their cognitive abilities, but establishing a plan will assist your loved ones in the event that they need to oversee your care. Reacting to unfortunate events leads to worse outcomes than ahead planning for their possibility. Take the initiative, and speak with a qualified professional to assist you with your plan.