Talking with our aging parents about their finances can be tough. But it’s necessary. We need to know their plans and wishes should it become necessary for someone to step in and help.
As a daily money manager, I have frequent conversations with older clients about their personal finances, estate plans, and wishes. Talking with my own parents, however, was another matter. My father has always been skilled with money. Even now at the age of 90 he competently handles my parents’ financial matters. What if something happens to him?
From my work with clients, I knew to start the conversation early before any major health or financial emergencies arose. Periods of crisis, when people are not thinking clearly and emotions are running high, are not good times to discuss finances.
The best time to start the conversation is when your parents are still healthy and active – before problems arise, said Sheri Samotin, a Certified Daily Money Manager and author of Facing the Finish: A Road Map for Aging Parents and Their Adult Children. This gives your parents and you time to plan. When plans are made before they are needed, older adults can choose where they will live, who will provide their care, and how their money will be managed. If they wait, it is more likely they won’t get to make the decisions at all, Samotin said.
Sometimes there are signs that parents need immediate help. If you notice any issues that could indicate difficulty managing money, you will want to start the conversation right away.
There may be stacks of unattended mail in the home. Your parents may have made out-of-character purchases or talk of new close friends who could be financially abusive. For more signs, see AADMM’s Money Matters blog post, How Do You Know When Your Parents Need Help with Money?
You may notice health conditions making it difficult for your parents to care for themselves. As we age, issues such as poor vision, hearing difficulties, arthritis, a decrease in cognitive processing, and other conditions can develop. Taken individually, these ailments are often manageable. When combined, however, they make it harder for older adults to do everyday tasks such as paying bills. (US News)
Although you may be ready to have the conversation, your parents may not be. Some parents may not be prepared for the change in roles. For years they have been in the position of offering advice and guidance, and now their children start questioning their abilities. (New York Times) Some people fear the questions that may come up and don’t know how to answer them. Others fear loss of control.
In his book, How to Say It to Seniors, Closing the Communication Gap with Our Elders, author David Solie says elders are grappling with maintaining control over their lives in the face of almost daily losses of strength, health, peers, and authority. They may fear their children are aiming to take control of the checkbook and make them irrelevant. Or worse yet, send them to the nursing home.
What information will you need?
Before you broach the topic, think about the information you need. This may include:
- Who will manage their health and financial affairs should they become incapacitated?
- Do they have estate planning documents in place including financial powers of attorney, health directives, trusts, and wills?
- If these documents are not in place, would your parents agree to have them prepared?
- If it has been several years since they have been updated, would your parents agree to review them with an attorney?
- Do they have enough money to live comfortably?
- What are their assets, debts, and regular sources of income?
- What insurance do they have in place and where are the policies located?
- Do they have long term care insurance? If not, what is the plan to cover long term care costs, should they need it? (Medicare does not cover long term care.)
- Where can you find the necessary documents and information should you need to help?
- What are the regular bills? How are they paid?
- Where are the passwords – including the password to the computer?
- Where is the safe deposit box and what does it contain?
- Is there a list of names and phone numbers for doctors, attorneys, accountants, investment advisors, and home maintenance professionals?
It may take several conversations to gather the information. Each family is unique. Try to find a lead-in to the conversation. With each discussion, go only as far as your parents are willing.
I found a conversation opener a few years ago when my father continued to travel after my mother no longer could. I asked both my parents what would happen if there was a major event and Dad was delayed getting home. Who would assist Mom with the bills? And what, exactly, would need to be done? I revisited the topic over several visits, but not every time I saw them.
When you start the conversation, approach it with consideration for your parents and what they may be feeling. The conversation needs to come from the point of compassion, concern, and willingness to help them remain independent and living as they choose for as long as possible.
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By Robyn Young, CDMM and owner of Money Care, LLC in Williston, Vermont. She blogs regularly on her Money Care blog.
