Later Life Planning

Managing your parents’ finances in later life: 6 steps to help you prepare

19th October 2020

It can be difficult to broach the subject of declining health in later life, particularly if your parents have previously managed their financial affairs quite confidently and comfortably themselves. It can be an awkward conversation to have.

GETSET is a six-step process which is designed to provide clarity and peace of mind for the way ahead:

  • G – Getting their ducks in a row
  • E – Estate planning
  • T – Title and timeline
  • S – Simplifying their assets
  • E – Establishing a relationship with a trusted adviser
  • T – Talk to your parents and family

1. Getting their ducks in a row

Find out from your parents exactly what assets are where. This will include bank accounts, investments, savings and pensions as well as material assets of worth (e.g. jewellery). If your parents own property then it’s helpful to have all the information relating to that property in one place, utility information, TV licence and insurance documents.

Having this information readily accessible will make it easier if you need to step in and support your parents at some point in the future.

2. Estate planning

I recommend having a Lasting Power of Attorney for both property and financial affairs and health and welfare. Make sure you understand what your responsibilities will be if your parents make you an attorney and that the documentation is set up correctly by using a solicitor to set up the Lasting Power of Attorney for them.

It’s also important to make sure that your parents have a will in place and that it reflects their current wishes. Simply checking that the executors of your parents’ wills are alive, willing to act and understand their responsibilities is key.

3. Title and timeline

Making sure that you know where the title deeds of any property your parents own are held is a good thing to do. If an asset (property or land) needs to be sold quickly in a crisis situation being able to locate the title deeds quickly will help.

Time goes very quickly and there could be gifts that your parents have made over the years, some of which are remembered and some of which may be forgotten. Working through a timeline and documenting what gifts were made, to whom and when will help when it comes to managing the tax aspects of your parents’ estate.

4. Simplifying their assets

Having gained clarity on your parents’ assets it’s worth considering if they could rationalise the number of bank and savings accounts they have, while being mindful of the protection levels offered per financial institution through the Financial Services Compensation Scheme.

Where investments are concerned it’s worth making sure that these are held in an easily accessible and understandable format and in line with your parents’ attitude to investment risk.

As your parents get older it becomes more important to make sure any investments are structured in a way that means they can be adaptable if your parents’ needs change. For example, if care is required it may be necessary to commence taking regular income from their investments quite quickly.

5. Establishing a relationship with a trusted adviser

Your parents may already have an accountant or a solicitor and having a SOLLA accredited (Society of Later Life Advisers) financial planner who is able to coordinate matters is really helpful.

Bringing those professionals in when appropriate and engaging with you and the wider family can make dealing with any matters that come up as and when your parents experience later life issues easier than they otherwise would be.

Supported advice procedures mean we actively encourage older clients to involve their family or friends in any meetings we have. This can give you peace of mind that your parents are being supported in the best way possible and means that you are actively involved.

6. Talk

Talk to your parents! Even if as a family you have never discussed your parents’ financial matters or if you feel uncomfortable talking to them about a declining health situation plucking up the courage to have these conversations now will make it easier in the longer term.

Make sure you understand what their wishes are should the need for care arise. Do they want to be looked after in their home or would they be happy to move into a supported environment?  What do they want to happen to the house if they are no longer able to live at home? And, however difficult it may be, find out what your parents’ wishes are regarding their funerals

For more information take a look at our Later Life Financial Planning Services, or if you have any questions about any of the above please contact us.