How Should Siblings Share Financial Responsibility for Aging Parents?

There’s a good chance that at some point in your adult life, you’ll need to start handling your parents’ finances and care. Stepping in to help aging parents isn’t easy, but the challenges vary depending on whether you’re handling it on your own or with the aid of siblings. Either way, you shouldn’t wait until your parents are unable to care for themselves to come up with a plan of action.

Lisette Smith, a certified financial planner with The Advisory Group, said in an email to The Balance that when estate planning, it’s important for siblings to talk to their parents about their goals for their elder years and the resources available as early as possible. That’s especially true if you believe it may affect your own financial planning.

“There is no shortcut to having these discussions, which may be difficult—or at least awkward—in most family dynamics,” Smith said.

Learn how to go about learning your parents’ wishes and needs, and how to split up caregiving responsibilities among siblings.

Understand Your Parents’ Needs

“It all begins with conversations,” said Cameron Huddleston, author of “Mom and Dad, We Need to Talk” and family finance expert at Carefull Corporation, in an email. Huddleston explained that the first conversation should be among you and your siblings, so you all can discuss how you want to approach family money talks with your parents.

For example, you should decide whether one person will initiate a conversation with your parents about their finances, or if it will be a group discussion. You also need to consider when to have the conversation and how to start it.

However you decide to go about it, Huddleston said it’s important to approach those conversations out of love and respect.

“Let parents know that if they ever need help, you want to be able to provide that help and follow their wishes.” To do that, Huddleston said, you need some information from them, including whether they have the following legal documents:

• A will or trust: These documents spell out who gets what when your parents die. If they die without a will, their property will be distributed according to state law.
• A durable power of attorney: This document names someone to make financial decisions and transactions for your parents if they can't do so themselves. Huddleston noted that if your parents want to name all of their children power of attorney (POA), they need to give each one of you the power to act independently of one another. Otherwise, you'll all have to be together to sign documents, speak with financial institutions, etc. For this reason, she recommended just naming one POA.
• A health care power of attorney: Also called a health care proxy or surrogate, this individual will be responsible for making medical decisions for individuals if they can't.
• A living will: This spells out what sort of end-of-life medical treatment your parents do or do not want.

It’s also important to find out what sort of care your parents would want if they need long-term care as a result of illness, disability, or cognitive decline. Do they expect you and your siblings to take care of them? Do they have the resources to pay for professional care?

“The sooner you start asking these questions, the more time you and your parents can explore what sort of care options they can afford and to create a plan for care so that none of you has to scramble when emergencies arise,” Huddleston said.

Figure Out How Your Siblings Can Help

Estate planning with your siblings for your parents can be a challenging task, as everyone will likely take on different responsibilities during the process.

Steven Wittenberg, director of legacy planning at SEI Investments Company, said in an email that siblings should be real about who they are, their skills, and their desire to be involved.

“It is important to communicate their viewpoint on whether they are emotionally capable or ready to take certain responsibilities,” he said.

How To Share Financial Responsibilities With Siblings

It’s common for siblings to have unequal financial resources, and that’s often a point of contention when helping your parents plan their estate.

“It is important not to make assumptions about other financial positions,” Smith said. “Those with more visibly wealthy lifestyles may have a lot of debt, for example, and may not be able to help as much as others think they should.” It’s important for everyone to be explicit about what their roles are to avoid animosity or resentment.

Huddleston said that if one sibling can't provide hands-on care but can afford to chip in financially, it could make sense for that sibling to help pay for someone to help transport parents, cook their meals, clean their home, or care for them so the sibling who lives closest doesn't get overwhelmed. Any siblings who aren't providing hands-on care also can do their part by overseeing their parents' finances and handling other logistical tasks (as long as they've been named POA).

“The most important thing to keep in mind is that you and your siblings shouldn't jeopardize your own finances to help parents out financially,” Huddleston said. “Then you'll just be perpetuating the cycle and potentially forcing your own children to support you as you age.”

Common Points of Dispute Among Siblings

Huddleston said fights typically break out among siblings when one person ends up taking on the bulk of the responsibilities.

“Again, agreeing in advance before emergencies arise on what roles each of you is willing to play can help,” she said. But if those conversations haven’t happened, it's never too late to have a family meeting to discuss how to divide up responsibilities, Huddleston said. 

If you’re the one who has taken on the role of caregiver, Huddleston said you shouldn’t be afraid to ask your siblings for help. If you’re feeling overwhelmed, they may not realize it unless you say something. “Just don't attack them for their lack of involvement,” she said. “Let them know specifically what they can do to make things easier for you.”

Tips for an Only Child

If you are an only child and can't take on financial responsibilities for your parents on your own, you might be able to tap into a variety of resources, according to Huddleston.

Working with an aging life care group may be beneficial for both health and financial aid. The Aging Life Care Association, for example, has programs in place that will provide an individual who can oversee a variety of aspects of your parents' care and point you to free or low-cost community resources.

Those who can't afford to help their parents (or don't want to), might be wondering if they're on the hook legally. More than half of U.S. states have filial responsibility laws, which hold adult children financially responsible for the parents' medical bills that they can't afford. However, Huddleston said that these laws are rarely enforced, and the best way to navigate your individual situation is to consult with an elder-law attorney.

The Bottom Line

When planning financially for your parents, it’s important to have open and honest conversations with all those involved as early as possible. Get on the same page with siblings before broaching the topic with your parents. And if you need help, it can be worth hiring a counselor or attorney.

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