The goal of many parents is to protect their estates, have some form of livable income, and at the same time leave their children provided for. Adult children can assist their parents in meeting these goals, and at the same time protect assets that may someday be theirs.
1. Recognize your parents' needs before your own. Your parents' money is, after all, theirs. They not only earned that money, they have earned the right to enjoy it. If they want to spend some of their money on a vacation or something else they've always wanted, allow them that freedom.
2. Get to know your parents' financial advisors. Don't simply hear about the people who are financially advising your parents at Sunday dinner, take the time to meet these individuals and familiarize yourself with the products and services they are offering. Satisfy yourself that they are doing right by your parents-and, ultimately, you.
3. Really learn about the investment choices your parents make. Find out what instruments your parents are investing in, and utilize the Internet and other avenues to research them. Make sure you actually obtain the true information, as for example from a prospectus. Don't simply rely on rumors, bulletin boards or blog chatter, which may or may not contain any actual facts at all.
4. If you hear something on the news about one of your parents' investments, don't simply react. You must realize that with little exception, news reports today are deliberately sensationalized; the objective of a media outlet is to obtain and keep viewers and readers, not necessarily to report all the facts. Before you react and alarm your parents into taking actions they may later regret, take a deep breath and conduct your own investigation. Actually talk to the company, or read the prospectus. Once satisfied that you have all the information, then is the time to advise your parents-or not.
5. Make sure your parents have adequate insurance. If parents become sick or disabled, an estate can be quickly depleted, and one serious illness can destroy the assets your parents worked their whole lives to build. Learn about the limitations of Medicare and Medicaid and figure out if long-term care insurance would be a good investment for both you and your parents. The right insurance also means homeowner's coverage of assets against natural disasters, loss or theft.
The bottom line in protecting your parent's estate-and your future inheritance-is to become sincerely involved in helping them, and to fully understand their needs.
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