top of page

What issues should I consider for my aging parent?

Updated: Dec 22, 2022

Becoming a caregiver for aging parents can be a drain emotionally and can carry financial ramifications both for parents and the caregivers. Helping our clients understand and manage the financial issues involved can make the situation a bit easier.

In this checklist, we cover a number of financial issues that our clients need to consider when faced with helping and potentially caring for aging parents, including:

  • Be sure clients examine their parents’ finances to determine if they are able to manage their own expenses. There may be sources of income available to their parents of which the parents are unaware.

  • It’s important to remind our clients to be sure they have access to their parents’ important documents such as any estate planning documents. They should have the names and contact information of any advisors their parents use such as an attorney, financial advisor, or accountant.

  • If our clients’ parents need long-term care, they will need to investigate ways to cover the cost. Medicaid planning or a reverse mortgage might be options.

  • If the estate of our client's parents is over a certain amount, then they may have an estate tax issue. It’s also essential for our clients to ensure that their parents’ beneficiary designations on insurance policies and retirement plans are up to date and that they reflect their wishes.

  • It’s important for our clients to ensure that their parents’ tax situation is in order, managing any capital gains or losses, as well as fully utilizing any deductible medical expenses.

  • Overall, it’s helpful to stress to our clients the benefit of having a handle on all of their parents’ assets, liabilities, and all related financial issues as a time may come when their parents are unable to manage their own affairs.

This is a comprehensive checklist of the types of financial issues that advisors should be discussing with their clients who are dealing with aging parents.


Hi, Todd Pouliot, Gateway Financial Again, thanks to our subscribers and returning to watch our videos. Today, I guess we all have this issue at some point or hopefully, have this issue and if you do, I'd like to help you out today in talking about this checklist. It's a very important checklist and I've had clients go through it obviously, both my parents are still living and my in-laws are still living. So, personal to me again. “What Issues Should I Consider For My Aging Parent?” So, becoming a caregiver for aging parents can be a drain emotionally and can carry financial ramifications for both parents and the caregiver. Helping our clients understand and manage the financial issues involved, can make the situation a bit easier. So, in this checklist, we're going to cover a number of financial issues that our clients need to consider when faced with helping potential caregiving for aging parents and there are a couple of different areas we're going to conclude here or include. Be sure clients examine their parent's finances to determine if they are eligible to manage their own expenses. There may be sources of income available to their parents of which the parents are unaware. And, it's important to remind our clients to be sure they have access to their parent's important documents such as estate planning documents and they should have the names and contact information of any advisors their parents are using such as an attorney, a financial advisor, and their accountant. And, if our clients are prepared for the long-term care need, they will need to begin and investigate ways to cover the cost. Medicaid planning or reverse mortgages may be an option. And, if the estate of our client’s parents is over a certain amount, you may want to have estate tax issues and those types of things considered prior. It's also important that our clients ensure that the parent’s beneficiary designations on insurance policies – retirement plans are up to date and they reflect their wishes. It's also important for our clients to ensure parent’s tax situation is in order. That's why we need an accountant there. Managing any capital gains or losses as well as fully utilizing any deductible medical expenses. Again, that capital gains and losses. Make sure you are really closely working with that financial advisor to make sure, “Hey, you know, my client only has six months left to live, don't sell these highly appreciated assets when we may get a step up in basis.” So, be cognizant of that issue and really aware. I've seen some terrible issues where that has not been properly handled. And overall, it's helpful to stress to our clients the benefits of having a handle on all their parent's assets, liabilities, and all related financial issues as the time may come when their parents are unable to manage their own affairs. So, this is a good comprehensive checklist that advisors should be discussing with their clients and if they're not let me help you out here. So, as usual, we're going to share our screen. We want to talk about cash flow and living arrangement issues. So, do your parents need assistance in managing their bills? Again, these are simple, yes/no, and once you say yes, that's when deeper dives need to happen. If you think that there's a no, then we can wipe that off the table and not cover that topic at this time. Could there be sources of income that you're unaware of? Is a plan needed to deal with potential illness or reduced mobility? Consider researching who can assist your parents in developing a plan. Also, different issues arise with parents that live locally or parents that live out of state. Make sure you understand what those differences are and how you are able to work with those people. Are your parents unable to live on their own? Consider the following, parents can modify their home and care can be provided there, which I know a lot of people prefer. There are also home caregivers that may need to help with common household tasks. Parents may be able to move in with a loved one. Professional geriatric care managers may be able to provide assistance. And, consider continuing-care retirement communities as an alternative living option. You don't really have to go into that full-service elder care facility. Maybe there's a path to get to that point if they're struggling with that. It's similar to more of an apartment living but on-site and access to health care. Estate planning issues. Do you need the contact information for your parents? Again, that's the advisor, the accountant, the attorney, and the doctors. Make sure you have access to all those things as that transition may occur. And, do important documents need to be organized? Again, I have another video on, “What Documents Do I Need To Keep On File?” That checklist is available for you here on YouTube. And, do your parents have an estate plan? If not, please get one immediately. Even if it's a simple plan, we have ways to help you virtually like this and we can do a lot of that online. So, make sure you review and make sure that they have consent with that as well. Review the estate plan. Ensure it is up to date – includes general and health care powers of attorney and a living will. Very important to have those answers before you need those answers. Some financial institutions will not honor your power of attorney which are from out of state or are more than three years old. Be very careful in that situation. Also, make sure if you have parents that live out of state and do care in other states, that they will accept both those powers of attorney and health care directives. If our parents are not subject to estate taxes but still have an A/B trust, revisit the need for the trust and/or review the funding formula given higher estate tax exemptions. And again, we're making this video here in 2022, to understand what those exemptions are here just in case there are any changes in the state law or estate planning amounts. If your parents have Trusts, consider whether lifetime conveyances or certain assets would be helpful in the event of incapacity or in order to avoid probate. I know a lot of people want to avoid probate, sometimes that's not a negative thing but it may be their wish to avoid probate. Continuing, will they need long-term care in a nursing home or home health care? Consider the financial impact it will have on cash flow and assets. Medicaid planning and reverse mortgages may be an option for you. Understand the need for long-term care is very expensive. Long-term care policies are also wonderful to have but they are extremely expensive as well. Will a parent's individual estate exceed their lifetime remaining federal estate and gift taxes exclusion? Again, right now in 2022, it's 12.06 million if no lifetime use, and the combined is 24 million. So, again, those are the numbers today, they may change at some point in the future. I've seen those numbers all over the board including in 2010 when there was no estate tax. Do your parents own multiple properties? Ensure that residency is clear for probate purposes. So, if you have a snowbird situation, make sure that you understand which court system you will be in. And an example is, JTWROS, joint tenancy with rights of survivor titling or transfer to a revocable living trust. I also like TOD, which is transfer on death, which can be an exceptional way to speed things along. Do the titles of your parent’s accounts – investment and bank accounts, need to be reviewed or updated? Again, there's that TOD to any brokerage accounts, POD payable on death to any bank accounts, or creating a revocable living trust to avoid passing through probate. Again, I think trusts are sometimes a little overkill and a little expensive for what you're trying to accomplish. And, in a simple TOD or POD can accomplish very similar things. So, make sure you work really well with somebody like us that understands how to make that happen, especially, if you're under the exclusion amounts of 12 million dollars. Do any designated beneficiaries need to be updated? Check to see if those statuses are updated. And, I will tell you more times than not, they're not correct, and you need to make sure that they're done right. And, it may be per stirpes if you have several children. But those designations need to be there. And, do your parents own any digital assets? I know we're at a point where sometimes we think the older generation is not very tech savvy but they may have digital assets such as social media so make sure you have those digital assets managed during potential periods of incapacity and they'll be transferred to heirs such as updating estate documents, digital assets, and signing up for a password manager. I will tell you that that password manager can be a big help to the person that's in charge of that estate after somebody's gone. They can get all that data and it's really easy to organize especially when your brain starts failing you as you get a little older and your memory starts slipping. Insurance issues. Any life insurance policy, health, and homeowners? Consider that coverage is adequate and it's up to date. And, do your parents have long-term care insurance – they have a rider or a long-term care rider on their insurance or annuity or critical illness insurance? Review the benefits and when they trigger the policy. Again, tax planning. Again, this is a big area to discuss. Make sure your accountant or CPA also does estate planning returns. A lot of them don't – in fact, most of them don't. Make sure you contact somebody like us who has connections with somebody that's good with those tax planning issues. So, any deductible medical expenses this year? Consider – your parents can deduct qualified unreimbursed medical expenses that are 7.5 percent of their adjusted gross income. That number is very high sometimes. When you're working, you can't get over that hurdle but as you retire and you're on social security or some fixed income you may hit that 7.5 percent. That also includes transportation, healthcare appointments, modification to a home or car for medical reasons, long-term care insurance premiums subject to limits based on age, and privately hired in-home healthcare employees. So, you can really reach that 7.5 percent very quickly. Strategies can be used to take advantage of large medical deductions such as accelerating income through a Roth IRA conversion or capital gain harvesting. So, make sure you work with somebody who understands how to take advantage of those large medical deductions. Any capital loss carry forward on your parent’s tax return? Consider selling an asset at a gain to offset the carry forward loss which will expire if unused after the death of the parent at holding. And, be cognizant of that TOD that we talked about earlier. Are there any unrealized tax losses in an account owned by your parents? Consider harvesting the unrealized losses and right now with the market the way it is, here in 2022, this could be an excellent time to do that. No time like the present. Again, work with your parents not against them, and help them understand that these things are available to them if they have those. Be mindful of the double basis rules referenced. And again, I have a, Will I Receive A Step Up In Basis For This Gifted Property?” flow chart available. And, I hope you enjoy all these checklists and flow charts we have for you because they all do intertwine at some point. Is one parent ill and are they any sizable unrealized tax gains in any account owned by the healthy parent? Consider having them gift the account to the ill parent to potentially take advantage of a step up in basis at death. What a great planning strategy. Wonderful planning strategy there. Be mindful of the one-year boomerang rule by referencing another one. “Will I Receive A Step Up In Basis For The Appreciated Property I Inherited?” flowchart. Again, all these flow charts kind of work together and lack a better word, flow together. Asset and debt issues. Could there be property, assets, or life insurance that needs to be managed but have not yet been identified? Again, that password manager can also be a great private investigator – look into some things that you may not be aware of. Look at the points feature on credit cards and miles with airlines to see if they're transferable, check for safety deposit boxes, and search state agencies and unclaimed property sites that are run by many state treasurers. Real easy to do. I find our clients have unclaimed funds a lot. Will there be any expenses that require your parents to sell any investments? Do your parents have annuities or illiquid assets that need to be reviewed to understand the options? Some of those annuities have a spousal inheritance or they can take over the account without any differences – any costs in there. So, understand what death benefit may be available to you or transfer options for spouses in that situation. Have your parents reached their RBD or required beginning date and do they own any retirement accounts? Consider reviewing their distribution plans and any automatic transfer schedules for these accounts. Make sure that those are done. Make sure that those are done. Make sure that those are done. That's a very important thing. Missing an RMD is a 50% tax penalty. It's the most critical tax torpedo the IRS has for us. And, are there any assets or accounts that should be consolidated? Sometimes people have assets all over the place and they don't know where they are. Maybe bringing them to one advisor that can bring all of that together onto a single sheet where you can look at that balance sheet and say, “These are the assets that I have.” Consolidating them – may help you reduce costs as well. Are there any state-specific issues that should be considered – out-of-state property or estate tax liability? Every state has its own estate tax plan. Some states have unique rules that can have a material impact, such as liability for the surviving spouse to pay for those expenses associated with the illness of the deceased spouse. And, do any steps need to be taken to reduce your parent's risk of elder abuse? Boy, amazing, amazing way to finish there. And, I will tell you, we can have a whole discussion on cybercrime and everything going on with the risk of elder abuse. It is rampant. Be very cognizant of how you can do that. So, freezing the credit on the ill parent is a good way. Contacting your credit card companies to make sure you have a limit on how much a single expense can be and having a second person there to oversee those things. Just a litany of ways to help you with credit and trying to avoid cybercrime. And, it’s just amazing how much people are motivated in other countries, and possibly in this country. But, the robocalls that are constantly calling, “I'm from Microsoft.” “I'm from the bank.” “I'm from the IRS.” “I'm from so and so – we need your personal information – we need to log into your computer.” I've seen it happen. We've had clients that we've tried to educate on that. And, there's just no way to ultimately stop any of that cybercrime that's out there, but being mindful of the holes that may be exposed or a door-to-door salesman that may be exposed and you want to make sure that that money does not disappear wrongfully. So, again, this is not something that we like to talk about and that's what financial planning is. Financial planning is to make you uncomfortable and we hope that in a small way, going through this checklist takes a little bit of that uncomfortable feeling out of what you have because now you have answers. And, not having a plan is a terrible idea, and not having answers to some of these is a terrible idea too. So, if we can help you in any way please contact us. is our website and we've got our calendar there so that we can help – talk to you about some of these issues. If you have an aging parent and how to deal with that transition of an aging parent. You're carrying a lot probably on your back right now. It's a lot of stress and going through this checklist can help you relieve a lot of that stress if you have a single parent or both parents are ill as they get older. It's not a problem that we have of morbidity, you know, that is the new conversation of morbidity, where it used to be the conversation of mortality. People are living longer but we're living longer with more and more diseases and as technology advances, we won't know what the future holds for us. But, thanks for coming today, I hope I can help you with this difficult topic of discussion. Hopefully, you can use this checklist. And, reach out to us. Email us, and we can send you these checklists and flow charts and we can talk about these things we'd love to have you as a client. Again, Todd Pouliot, Gateway Financial. Thumbs-up, we love that and we appreciate our subscribers. Keep coming back and ring that bell for those notifications so when you get those new videos you can catch up on them real quick. Thanks, and have a great day.

18 views0 comments
bottom of page