Health and aging: Is your family ready to cover the costs?

Talk about potential expenses associated with a long-term illness, such as home health care or modifications to the family home to accommodate a future disability. Should you or your parents purchase disability or long-term care insurance, consider other options such as hybrid forms of life insurance and health savings accounts, or simply save and invest more?

Review your choices with your financial advisor, who can help you ensure that your retirement and any other goals aren’t put in jeopardy.

Many people struggle with aging parents’ unwillingness to face their limitations. That’s why it can be wise to bring these issues up early. Ask specific questions like: At what point would it make sense for you to stop driving, or to have a caretaker come in to help with meals? These conversations can be difficult so don’t be discouraged if your initial efforts are dismissed. It will likely take more than one conversation to get the answers that you need.

Cynthia Hutchins, director of financial gerontology at Bank of America, recommends that siblings talk first among themselves about how they'll share the caregiving role. "You want to be sure that both your parents' and your own needs are considered. Sometimes it makes sense to cobble together a combination of in-home and outside care," she says, where siblings can at least share the costs, if not the hands-on responsibilities.

Among the things to consider: Which medical treatments do you and your parents want to be used or avoided at the end of your lives? Who do you want to be your health-care proxy if you are unable to communicate your wishes? You can use a health-care power of attorney and a living will to document your choices. And begin thinking about how you want to pass on your legacy—financial and otherwise.