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Planning for the Unthinkable

Your relationship with your parents changes many times during your lifetime. When you were a child, your parents were responsible for you. They helped you overcome hurdles that you faced for the first time, and they gave you their emotional and financial support. As a young adult, you sought and achieved independence for yourself, but your parents were still there as a source of advice and guidance. And if you eventually had children of your own, you gained a little insight about why your parents made the choices they did.

Yet as your parents age, you may become increasingly concerned about them. The health problems they experience can make even routine daily living difficult. You may know little or nothing about their finances. They may be having great difficulty accepting the limitations that growing older places on them. And they may be unwilling to discuss anything with you, even if you bring up the subject yourself.

Nevertheless, there are a few things you really need to know so you can be there for your parents. Although discussions about these sensitive topics can be challenging, take comfort that it's not necessary to know every detail of their personal lives. Getting the answers to some basic questions should be enough to take care of most situations your parents are likely to face.

Powers of attorney
People don't like giving up control of their affairs. However, seniors do often face some situations that require getting help from others. The legal document that one uses to pick such a helper is called a power of attorney. When the document allows the helper to help even after the person needing assistance no longer has the ability to make decisions, it is referred to as a durable power of attorney.

Often, a person will choose one helper to make financial decisions and another helper to make medical decisions. Although a helper can assist with finances from a distance without much difficulty, seniors usually feel more comfortable if the person helping with medical decisions is close at hand to go with them to the doctor or hospital.

The biggest concern that older people have is that by creating a power of attorney, they have given up control of their lives. If you will be the one helping your parents, assure them that you have a duty to follow their instructions and that you will act independently only when they no longer can instruct you. Make sure you know how to find the power-of-attorney document, because you will need to show it to the financial and medical institutions that work with your parents. When you must act, be respectful of their past decisions and try to avoid major changes unless absolutely necessary. Remember that you must do what's in your parents' best interests, not yours.

Health-care options
As your parents lose the ability to care for themselves, their biggest fear may be having to leave their home and go to a nursing home. As recently as 25 years ago, nursing homes were often the only option for people needing regular medical supervision. Because they are expensive and Medicare generally doesn't cover the expenses, nursing homes scare older people with limited financial resources.

In part because of our aging population, a lot has changed in the types of care available to seniors. For those needing minimal care, health-care workers are available to visit seniors at their homes for an hour or two at a time. And as care needs increase, those workers can provide around-the-clock care at home. Although this care is not cheap, it sometimes compares favorably with the costs of other alternatives.

In addition, seniors have many choices beyond nursing homes if they decide to leave their home. Retirement living communities offer amenities such as home-cooked meals, transportation to local medical facilities and stores, and regular entertainment programs. Many such communities also offer assisted-living options that allow seniors to get medical supervision. The result is that seniors no longer need to go to a nursing home until their needs become high enough to warrant it.

You may want to look into the costs of obtaining long-term care insurance for your parents. Some companies will write policies for older seniors, and although the cost of insurance generally increases with age, paying premiums may be preferable to paying the full cost of care. Make sure that if your parents get long-term care insurance, it will cover the types of care your parents prefer.

Estate planning
It's especially hard to talk about estate planning with your parents. Your parents may interpret your questions as being motivated by greed. The key to communicating successfully with your parents is to know the appropriate boundaries.

The most important thing to remember is that your parents don't need to tell you anything specific about their plan. Although knowing more may be helpful to you and other family members, your parents do have the right to keep these matters private. For your purposes, it's sufficient that you know two things. First, your parents should have some type of plan in place. And second, the people responsible for implementing the plan should know how to do so when the time comes. If your parents can assure you that they have taken care of these two things, then you can take comfort that all will probably work out well.

On the other hand, if your parents don't have their affairs in order and look to you for guidance, your knowledge of resources available at The Motley Fool can give them the information they need.

Keep your family in the loop
If you have siblings, remember that even though you may be providing the most help, your parents don't want to create any discord in the family. Part of your responsibility to your parents is to keep your siblings aware of what you're doing. Giving your siblings periodic updates can avoid a lot of tension later on.

It's hard to take care of your parents. Yet after all they've done for you, it's nice to be able to repay their care and love with your own.

For more articles in this series:

It's never too early -- or too late -- to start planning for retirement. Let ourMotley Fool Rule Your Retirementnewsletter service help. It's yours free for 30 days.

Fool contributorDan Caplingerwelcomes your comments. The Motley Fool is investors writing for investors.

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Dan Caplinger

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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