End-of-life planning and the future of one's finances aren't discussions that most people want to have—especially not with their adult children. However, as awkward as it may be, neglecting to talk dollars and cents with your aging parents can be a big mistake when it comes time for you to take over their financial decisions. Try these 6 tips for talking money with older parents:
1. Know Your Topic
First and foremost, you need to know exactly what it is that you plan to discuss. Some topics might include how your parents plan to split their assets, what long-term care is going to look like, and what insurance policies are currently in place. Talk to your financial advisor and do some research to see what financial planning conversations you should be having with your parents.
2. Find the Right Time
Broaching the subject of finances with your aging parents is a tough thing to do, and timing is everything. All too often, these difficult conversations only happen out of necessity during times of crisis or health emergencies. Try to start a dialogue with your parents sooner rather than later, and avoid a time when emotions are already heightened, like during busy holidays.
3. Ease into the Conversation
Even if it's a good time to talk finances, you don't want to catch your parents by surprise. Luckily, there are a number of different ways you can try to ease into the conversation:
- Make it about you. Approach the conversation from the perspective of your own finances and plans for the future. Frame the discussion as if you're asking them for advice.
- Relate to current events. Maybe the stock market has taken a turn for the worst, or a close friend is dealing with a family crisis. Talking about current events in your personal life or the country at large can provide a natural way to segue into a discussion of your parent's finances.
- Involve a third party. Try to get the ball rolling by setting up a meeting with an experienced third party, such as a financial planner.
4. Respect Their Privacy
Finances can be a sensitive topic for anybody, and your parents are likely no exception. As you start the conversation, it can be helpful to set some boundaries. Ask them if there's anything they are embarrassed about or if there are any topics that are off limits. Be patient and focus only on what you need to know to help them. While you might want to know how much you and your siblings are getting in inheritance, it's probably not necessary for the discussion at hand. This way, you'll avoid sounding self-centered, and your parents will know that you are genuine and coming from a place of care and concern.
5. Be Diligent with the Details
While you want to be as patient as possible, you still need to be firm and ensure that you're getting all the information you need to make the best decisions for your parents. As such, you need to make sure that you're getting the full picture of your parents' finances. Keep track of all account information, deeds, co-op agreements, insurance records, and other assets. It may seem invasive, but diligent bookkeeping will save you and your parents a lot of time in the long run.
6. Keep the Conversation Going
Discussing future financial plans with your parents shouldn't be a one-and-done deal. Life happens, and situations may change. Schedule regular times to meet with your parents and discuss the current state of their plans. This ensures that you'll all be on the same page when it comes time to make the big decisions.
Don't put off talking finances with your parents until it's too late. As uncomfortable as it may be, having ongoing financial discussions with your parents will help everyone feel more confident in the future and show your parents that you care.