Financial Security For Dummies. Eric Tyson
help where possible. In most communities, a variety of nonprofit organizations offer information and counseling to families who are caring for elderly parents. Numerous for-profit agencies can help with everything from simple cleaning and cooking to health checks and medication monitoring, to assisted living and health advocacy. You may be able to find your way to such resources through your state’s department of insurance, as well as through recommendations from local senior centers, doctors, and other medical providers. You’ll especially want to get assistance and information if your parents need some sort of home care, nursing home care, or assisted living arrangement.
Take some time off. Caring for an aging parent, particularly one who is having health problems, can be time-consuming and emotionally draining. Do your parents and yourself a favor by using some personal or vacation time to help get things in order. Also be sure to take care of yourself and give yourself some needed downtime and a real vacation from your obligations.
Understand tax breaks. If you’re financially supporting your parents, you may be eligible for a number of tax credits and deductions for elder care. Some employers’ flexible benefit plans allow you to put away money on a pretax basis to pay for the care of your parents. Also explore the dependent care tax credit, which you can take on your federal income tax Form 1040. And if you provide half or more of the support costs for your parents, you may be able to claim them as dependents on your tax return.
Discuss getting the estate in order. Parents don’t like thinking about their demise, and they may feel awkward discussing this issue with their adult children. But opening a dialogue between you and your folks about such issues can be healthy in many ways. Not only does discussing wills, living wills, power of attorney, living trusts, and estate planning strategies make you aware of your folks’ situation, but it can also improve their plans to both their benefit and yours.
Splitting from your spouse
In most marriages that are destined to split up, both parties usually recognize early warning signs. Sometimes, however, one spouse may surprise the other with an unexpected request for divorce. Whether the divorce is planned or unexpected, here are some important considerations regarding divorce:
Question the divorce. Some say that divorcing in America is too easy, and I tend to agree. Although some couples are indeed better off parting ways, others give up too easily, thinking that the grass is greener elsewhere, only to later discover that all lawns have weeds and crabgrass. Just as with lawns that aren’t watered and fertilized, relationships can wither without nurturing. Money and disagreements over money are certainly contributing factors in marital unhappiness. Try talking things over, perhaps with a marital counselor.
Separate your emotions from the financial issues. Feelings of revenge may be common in some divorces, but they’ll probably only help ensure that the attorneys get rich as you and your spouse butt heads. If you really want a divorce, work at doing it efficiently and harmoniously so you can get on with your lives and have more of your money to work with. The more spent on legal fees, the less will be left for you and your soon-to-be ex-spouse.
Detail resources and priorities. Draw up a list of all the assets and liabilities that you and your spouse have. Make sure you list all the financial facts, including investment account records and statements. After you know the whole picture, begin to think about what is and isn’t important to you financially and otherwise.
Educate yourself about personal finance and legal issues. Divorce sometimes forces nonfinancially-oriented spouses to get a crash course in personal finance at a difficult emotional time. This book and others I’ve written, such as Personal Finance For Dummies (also published by Wiley) can help educate you financially. Peruse a bookstore and buy a good legal guide or two about divorce.
Choose advisors carefully. Odds are that you’ll retain the services of one or more specialists to assist you with the myriad issues, negotiations, and concerns of your divorce. Legal, tax, and financial advisors can help, but make sure you recognize their limitations and conflicts of interest. The more complicated things become and the more you haggle with your spouse, the more attorneys, unfortunately, benefit financially. Don’t use your divorce attorney for financial or tax advice — your lawyer probably knows no more than you do in these areas. Also, realize that you don’t need an attorney to get divorced. A variety of books and kits can help you. Consider divorce by mediation. Research mediators in your area. Both parties have to agree they want to reach an agreement and are willing to work together to reach that end. The amount of money that goes back to each party and the diminished stress, particularly on children, can be substantial.
Analyze your spending. Some divorcees find themselves financially squeezed in the early years following a divorce because two people living together in the same property can generally do so less expensively than two people living separately. Analyzing your spending needs pre-divorce can help you adjust to a new budget and negotiate a fairer settlement with your spouse.
Review needed changes to your insurance. If you’re covered under your spouse’s employer’s insurance plan, make sure you get this coverage replaced. If you or your children will still be financially dependent on your spouse post-divorce, make sure the divorce agreement mandates life insurance coverage. See Chapter 11 for more about insurance. You should also revise your will.
Revamp your retirement plan. With changes to your income, expenses, assets, liabilities, and future needs, your retirement plan will surely need a post-divorce overhaul.
Coping with the death of a spouse
Of course, everyone ultimately passes away, and we all hope to live a long, healthy life and go peacefully into the night at a ripe old age. But medical problems, accidents, and other largely unpredictable events can cause an untimely death of a spouse or other important loved one.
I’ve worked with numerous people and had other friends who have dealt with this situation, and the challenges are numerous. Here are some things to consider:
Take some mental health time off. With the passing of a spouse, in addition to the loss of companionship, you are thrust into a new role and unchosen lifestyle. Think about all of the things that your partner took responsibility for in your household. Allow some time and space to grieve and to adjust to your new and unplanned role.
Find someone to lean on. It could be a relative, a friend, or both who can help you to cope with your new situation and be a sounding board. Just be sure that the person you’re relying upon is trustworthy and without an agenda. A counselor or psychologist may be useful as well for a period of time. Check them out and interview at least two or three and beware of those who are prone to push continual and costly sessions as far as the eye can see. If religious, some organizations offer very reasonably priced six- to eight-week group sessions for support and guidance. One example is http://mournerspath.com. Check out your faith group for offerings.
Move slowly with important decisions, especially financial ones. You might consider selling your home, moving, making changes to investments, and so on. Any of those could be a reasonable thing to do with proper time, thinking, and research. But give yourself some time to adjust and process all that has happened and changed. You also want to be sure you aren’t being pushed into making a decision by a salesperson or anyone else with a financial conflict of interest or some other agenda.
Know where everything is. In some couples, responsibility is shared for dealing with financial matters whereas with other couples, one person deals with everything. Regardless, each of you needs to know where everything (for example investment accounts, insurance policies, wills and estate documents, car titles, and so on) is located and dealt with.
Dealing with a natural disaster
Tornados, earthquakes,