Aging parents? Take these four steps to financially protect yourself

Gretchen Caldwell, the founder and President of Pure Planning LLC, has a particular soft spot for families who are worried that they might need to take care of another generation. These are often families who have been diligent about preparing for their kids’ futures, but are not sure what their financial responsibilities might end up being if their parent ends up in crisis later in life.

Gretchen Caldwell

As a financial planner, Gretchen is the queen of getting people to bite the bullet and face their realities. I asked her what I should take care of RIGHT NOW. Here’s her advice:

    1. Start a separate savings account specifically for family emergencies. Having money set aside as a cushion just for this purpose will make it easier to swallow if you need to dip into it.

    2. Ask your parent which Medicare plan they’re signed up for, and, if they’re low-income, determine if they’re eligible for Medicaid in their state. (California’s Medicaid program is called Medi-Cal, and its eligibility chart is here.) To better understand the differences between Medicare and Medicaid, check out this comparison. A site called is well-designed and well-written and will get you started with Medicare basics in a way that won’t make you want to pull your hair out.

    3. Work with your parent to create a document that contains all of their financial information and how to access their accounts and advisors. Confirm that you’re listed as their power of attorney. (It’s not as scary as it sounds—it can be written so that it only goes into effect in the event they’re incapacitated.)

    4. Talk with your parent about setting up a trust to hold all their assets. If they own anything of value that doesn’t have a named successor owner at the time of their passing, those assets will get tied up in probate court—and the family will end up paying fees tied to the value of the assets. Gretchen says, “’Estate planning’ sounds so fancy, but it’s really just a way to protect what belongs to your family.”