PLAN NOW TO LOOK AFTER AGING PARENTS (FINANCIAL FOCUS)

Much has been written about the "sandwich generation" -- those people who, while still caring for their own children, are also forced to assume responsibilities, financial and otherwise, for their aging parents. If you're still a potential "sandwich" member, then you've got some serious issues to deal with. But you can make it easier for everyone involved if you do your planning early.

Dealing with one's parents on financial and lifestyle issues can be quite emotional. However, strive to keep emotion out of your decision-making. It's not easy, but it can be done.

You may want to start your planning by discussing the following topics with your parents.

* Durable powers of attorney

By obtaining durable power of attorney from your parents, you will be able to use their assets, should they become incapacitated, to pay their medical bills and hospital expenses. Power of attorney also lets you make a variety of legal and financial decisions. And some broader power of attorney arrangements even permit you to set up trusts.

Even in the best relationships, asking for power of attorney is a sensitive issue. Your parents may tell you they will never need you to take these powers. And they may be right; their physical health and mental capabilities may always be strong enough for them to manage their own affairs. Nonetheless, you should stress to your parents that power of attorney will let you take care of them only if they need it.

Before seeking power of attorney, you should consult your own legal adviser to make sure you fully understand your rights and obligations.

* Health care directives

By establishing a health care power of attorney also called a medical power of attorney -- your parents can designate someone to make health care decisions for them if they become incapacitated. The health care power of attorney documents typically contain an individual's preferences regarding specific medical decisions.

Another health care-related document is a living will. Living wills have been recognized by law in most states, but they are less flexible than a health care power of attorney. Living wills are usually limited to decisions about life-sustaining procedures.

* Long-term care insurance

The average cost for a nursing home stay is $40,000 a year -- and it can easily cost twice that amount in major metropolitan areas. Medicare picks up very little of these costs, so people have to come up with the money out-of-pocket.

These costs can wipe out your parents' lifetime savings -- and yours, too. By purchasing a long-term care policy, you can make sure your parents maintain their financial independence and your own financial goals are not jeopardized.

The sooner you start talking to your parents about long-term care, the better. The younger they are when they purchase coverage, the lower their premiums will be.

Try discussing all these arrangements with your parents as soon as you can. It might not be the most comfortable thing you've ever done, but you will be doing a service for everyone involved.

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