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5 Ways to Help Seniors Leave a Financial Legacy

Get tips on how family caregivers can help their parents plan ahead to leave a financial legacy according to their wishes

Talking about finances with aging parents can be challenging. But without planning and discussion, their assets might not end up where they would have wanted. LendingTree shares tips on how family caregivers can help their parents plan ahead to leave a financial legacy according to their wishes.

Help aging parents distribute their savings in line with their wishes

Caregivers who want to help their parents or loved ones leave a financial legacy should approach it a lot like talking to children about sex, says Patti Black, a certified financial planner with Bridgeworth Wealth Management in Birmingham, Ala., and former caregiver to her parents. 

The conversation should start earlier than you think – and it’s not just a one-and-done event. 

Instead, it should be an ongoing dialogue so you can help them best distribute their wealth in line with their wishes.

Black, who helped care for both her mother and father before their deaths in 2018 and 2021, respectively, has worked with many clients to help their parents leave a financial legacy during her 25-plus-year career.

She says while it can be emotionally challenging, there are some steps caregivers can take to make the process smoother.


1. Start the conversation

Money can be a touchy subject, and many adults are reluctant to discuss their personal financial situation with others, even their family. 

A recent study by the Transamerica Center for Retirement Studies found that 46% of retirees never discuss their financial situation with others. 

That’s problematic, especially since a separate study found that 87% of people think it’s their parents’ responsibility to start the conversation about leaving a financial legacy. 

But Black says avoiding such discussions can cause problems in the future. 

She suggests caregivers start at a place where parents are going to be most comfortable and find an easy intro point for conversation. 

For example, you might let them know that you’re thinking about hiring a financial advisor and ask if they have one and how they’ve helped them?

You also want to do your best to make sure their financial house is in order and not assume they have basic tools in place. In fact, research shows fewer than half of U.S. adults have a will in place.

Another study found that only 18% of people have all the necessary legacy planning components in their will such as a health care directive or proxy and a durable power of attorney

2. Know where key financial documents are kept

Beyond knowing which financial resources and tools they have in place, you also want to know where to find them and how to access them. 

Black says you want to do everything you can so that you don’t have to “play detective” in the event of the parent’s incapacity or death.

Black says she’s had many clients who couldn’t find important documents after a loved one’s death. 

In her own case, she thought she was on top of everything, but later found burial insurance policies for her parents that she didn’t know about. Thankfully, she was able to turn them in after the fact, but it would have been a lot less headache if she had known about them ahead of time. 

“Parents may not want to show kids what they have or don’t have, but it’s more about letting them know that if something happens. They might say, ‘I keep all of this in the study in the third drawer of my desk. Here’s my financial planner and here’s how you reach them.’ You don’t want grieving family members having to tear the house up looking for this.”


3. Seek help from financial professionals

If your parents don’t already have a financial planner, you should consider helping them find one.

Even if they have always done their own financial planning and investing, there’s likely going to be a time when they don’t want to or can’t do it anymore, so building a relationship with a planner sooner rather than later is key.

An advisor can help them manage their money throughout retirement and create a financial plan.

4. Create a financial plan 

Research shows that only about one-third of Americans have a written financial plan. Those with a plan in place feel significantly more financially stable than those without one. 

Plus, it can help them leave the legacy they want to leave.

“The best way to plan for a legacy is to create a financial plan,” says Sean Pearson, a financial advisor for Ameriprise Financial in Conshohocken, Pa. “Specifically, once a retiree understands what expenses are essential, which are lifestyle choices and how much is reasonable to protect and save for the unexpected – the rest is a potential legacy. Planning can allow you to make tax-advantaged decisions in terms of what assets you want to own in retirement, and which assets you should spend in retirement.”

5. Understand the impact of taxes

Make sure you understand the tax implications of various legacy plans and take advantage of tax strategies that may be beneficial in building a legacy.

​”Simply understanding the tax-control triangle can be a great way to leave a legacy for your children,” Pearson says. “Specifically, what do you own and when will it be taxed? Most people have some money in the bank, as well as their home that would be non-qualified assets. States may collect inheritance tax on these assets, but not on their growth when left as part of the estate plan.”

So, if you’re a caregiver or may become one in the future and you haven’t yet started speaking with your parents about their financial legacy, the time to start is now. 

Taking a few small steps now can go a long way to help them feel more at peace about the future.

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Guest contributor: Maxime Croll, writing for LendingTree, is a Sr. Director at ValuePenguin focusing on the insurance industry. Previously she was the Director of Product Marketing at CoverWallet, a commercial insurance startup, and helped launch NerdWallet’s personal insurance business. Maxime has contributed insurance insights and analysis to Forbes, USA Today, The Hill, and many other publications.

This article wasn’t sponsored and doesn’t contain affiliate links. For more information, see How We Make Money.


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