Tuesday, July 14, 2009
Adult children should help parents simplify their finances
Mellody Hobson, financial editor on ABC’s Good Morning America, gave adult children advice this morning (July 14). Have a conversation with your parents about finances while they are still well, she said. You may have to approach the topic several times.
She recommended talking to them about direct deposit, automated bill paying, having a will (she didn’t mention write a trust but that is becoming popular), and in many cases considering long term care insurance. Here verb was “simplify.” Good advice could be to take stock certificates and bonds and put them into investment accounts managed by major banks (they are normally protected from the bank’s own health). She said that over 70% of people in the US do not have wills. And 70% of people in assisted living facilities or nursing homes must self-pay. Most people don’t know that Medicare doesn’t normally cover nursing home care, she said (there are exceptions).
The link is called “How to Talk to Your Parents About Money: Get Mellody Hobson's Tips for Discussing Finances With Your Elders” with link here.
Hobson did not mention filial responsibility laws, or so called poor laws, which in 28 states (including California) could force adult children to support indigent parents, and which might be enforced in the future given the financial crisis in many states.
Hobson mentioned the AARP's estate planning link, which is here. I think that it is interesting how the AARP plays devil's advocate with the rapid promotion of living trusts by lawyers, in a piece called "The Truth about Living Trusts", at this link. AARP says that it does not endorse particular trusts or parties selling them. This article is in some contrast to what the media (like Jeffrey Toobin on CNN) has said about trusts (favorably) in view of the Michael Jackson experience.