Addressing your aging parents’ finances is not easy. Several years ago, when Gwen's mom started showing signs of memory loss, she had conversations with her about her finances. The daughter felt awkward probing her mom about her accounts, income and estate-planning documents, but that small amount of discomfort was worth it. It would’ve been incredibly difficult to get the information the daughter needed to take over her finances as her dementia progressed if they hadn’t had the money talk with her while she was relatively lucid. She was fortunate that her mom was willing, for the most part, to have these conversations. Plenty of older adults don’t want to talk about money with their children. “People hold tight to their bootstraps,” said Gwen Morgan, author of the “What If … Workbook,” a guide that helps people give loved ones necessary information if anything happens to them. “They don’t want to let the information out.”
Go Banking Ratesrecently posted an article entitled, “How to Talk About Money With Your Aging Parents,” which emphasized that even if your parents are hesitant to open up, the sooner you talk to them about money, the better. If not, it only becomes more difficult to obtain the information you need to help them manage their money and make decisions if they become incapacitated. In the worst case scenario, one would have to go to court to get control. This has the potential to destroy families. No one wants to resort to that.
Here are several strategies from the article to get aging parents to discuss their finances. Make sure that the conversation is respectful. Also, make certain that it’s understood that you’re not trying to take over your parents’ finances. Starting with an area that doesn’t feel like a loss of power may be more successful, the article advises.
1. Use a story. This can get the ball rolling. It can be about someone who did or didn’t have information about his elderly parents’ finances and what happened: major headaches for the children because they didn’t have any information about the father’s accounts or legal documents. Assure your parents that you want to make sure this doesn’t happen to your family and suggest that they divulge some of their financial information now.
2. Get help from your siblings. The child with the closest relationship with the parent should start the conversation, with the other kids joining in later conversations to discuss specific details about your parents’ money.
3. Talk about your own situation. The article notes that you might be able to get your parents to speak more freely if you share what you’ve done to get your own financial affairs in order. This can include that you’ve met with an estate planning attorney to create documents such as a will and trust. Also, let your parents know that you have a list of your accounts and passwords to give to your spouse if the unforeseeable occurs. Then ask your parents what steps they’ve taken.
4. Discuss your parents’ future. Inquire of your parents about their plans for retirement. This is a more general discussion that can get things going, the article said. You can ask if they plan to downsize or what sort of care they’d like to receive if something happened. This could start a detailed discussion about their finances.
Taking the right steps now can affect future well-being. Similarly planning now for the future can positively affect financial well-being. We all want to stay in control of our lives as long as possible and for that we must plan. When it comes to planning for the future, the sad fact is that every year we fail to plan we lose options. Wait long enough and the only options left are those made for us out of desperation. Timing is everything. In order to maintain control as long as possible and have an effect on your own quality of life decisions you must choose to act now. Your decisions need to be made known and documented correctly. Remember, good planning is no accident!