Providing Financial Assistance to Aging Parents

8/03/2009

posted by N. Sioris

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Over the weekend The Wall Street Journal Report with Maria Bartiromo, aired an interview with Andy Cohen, CEO and co-founder of Caring.com. During the interview Mr. Cohen highlighted the challenges that many baby boomers are struggling with while providing care and financial aid to aging parents.

Currently, 45 percent of adult children in the U.S. are providing financial assistance to their aging parents. Mr. Cohen cautions that there are three major mistakes that people routinely make while helping their parents.

1. Not maximizing all the entitlement benefits that their parents are eligible for. Caring.com provides access to a "benefits check-up" which accesses 1600 sites to check for various benefits or entitlements, that your aging parents might be eligible for.

2. Not spending parent's assets before contributing their own, such as using life settlements, a reverse mortgage, or the parent's retirement savings. Cohen says for tax reasons this approach is advised, even though it's a tough conversation to have with aging parents, especially if the parent feels strongly about leaving an inheritance.

3. Not having all the legal documents in place in order to manage aging parents' health directives as well as make financial decisions for parents.