Anne Bokma and Bart Mindszenthy write on the important topic of parental financial care. Originally posted on Nov 2011 on canadianliving.com
Money management for your parents
Managing money matters
My parents were the product of another age: They lived after the Great War, through the depression and the Second World War. So when it came to their financial values, fears and safety zones, they were highly conservative and outright secretive.
As they moved well into retirement mode and their early 80s, it was clear they were declining in various ways and at different rates, both physically and cognitively. They looked at their financial and legal affairs as personal and private, marginalizing even me, their trusted only child. My father told me I was the executor of their wills, yet the originals and copies were in their safety deposit box, to which I had no access.
Having “the talk”
It took a number of very careful conversations with my father (who was the master of the purse) to edge him toward thinking about letting me have a role in their financial well-being. I wanted him to understand that I needed to know their wishes in order to do the best things for him and my mother.
We talked about how I could help make sure their bills were paid on time, address any other financial concerns and oversee their finances in case one of them felt ill (by having signing authority at the bank and access to the safety deposit box). We also talked about them giving me power of attorney rights.
Once my father got comfortable with the role I was asking to assume and why, and what the benefits and safeguards were for them, he was ready to commit to sharing access to their finances. He and I went to their bank; we signed forms allowing me to cosign for access to all of their accounts and the safety deposit box. He also had power of attorney documents prepared and signed.
From then until he was well into his 90s, we made weekly visits to the bank and I helped him with all transactions. When he was no longer well enough to come with me, I was entrusted to do it all for them on my own. Mind you, I was 50 years old by then.
Even though it’s uncomfortable having these difficult conversations with aging parents, I would encourage others to press to have those talks, as well as to forge agreements, and build plans and databases of personal information. This can only help both them and you, and allow everyone to explore and understand any financial fears, needs and wishes.
– Bart Mindszenthy
Canadian Pension Plan (CPP)
• CPP Retirement Pension:
This is a monthly benefit payable to eligible contributors aged 60 years and older. The amount received depends on the age at which you apply and how many years contributions were made.
• CPP Survivor Benefits:
These payments begin six months after the contributor’s death and are made to the deceased contributor’s estate, spouse or dependent children.
• CPP Disability Benefit:
This benefit is available to those who have made enough contributions and whose disability prevents them from working.
Old Age Security (OAS)
• OAS Pension:
A monthly benefit for those aged 65 and older who meet the Canadian legal status and residence requirements, an OAS pension is not based on financial or employment status. You must apply to receive benefits.
• OAS Widowed Spouse’s Allowance:
Based on previous years’ income, this benefit is designed for low-income spouses of deceased OAS recipients.
• Guaranteed Income Supplement (GIS):
A monthly tax-free benefit for Canadians aged 65 and older who receive the OAS pension, a GIS provides an amount based on previous years’ income and marital status.
• Spouse’s Allowance Program:
This program offers a monthly tax-free benefit for the spouse of an OAS or GIS recipient between ages 60 and 64. The amount is based on the combined incomes of the OAS recipient and spouse.
• Widowed Spouse’s Allowance:
This tax-free benefit is for low-income spouses of deceased OAS recipients.
This program may provide retirement, disability or survivor benefits to eligible individuals who have lived or worked in another country, or to the surviving spouses, common-law partners or children of eligible individuals who have lived or worked in another country.
Veterans Affairs Canada
• War Veterans Allowance Program:
Providing financial assistance to low-income war veterans, this program’s benefit is based on previous years’ income. The minimum age for males to apply is 60, for females, 55.
• Service Disability Pension:
This provides benefits to any veteran who has become disabled during service.
Keep a paper trail
Knowing where your parents keep their important legal and financial papers could alleviate much stress should they suddenly get sick or pass away, says Frank Raso, a lawyer in Hamilton. Raso suggests keeping those documents together in an unlocked fireproof and waterproof box. Here’s a checklist of what your parents should have.
• Birth certificates
• Insurance policies
• Power of attorney documents (living wills)
• Family trust documents
• Funeral instructions
• Most recent tax returns
• Contact information for lawyer
• Names and locations of bank branches and nature of bank holdings
• A list of all assets, including RRSPs and nonregistered investments
• Income sources, including pensions and rental incomes
• Debt information, including loans and credit cards
• Prepaid funeral contracts
• Contact information for insurance agent
• Contact information for financial planner
– Anne Bokma
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