How to Talk to Aging Parents about Finances

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Money is a sensitive subject for many people, but understanding your parents’ financial resources is critical as you consider their long-term care. It’s also worth remembering that inquiring about your parents’ finances can feel like an invasion of confidentiality.

But as parents age, there’s a need to ensure they are on solid financial footing. It’s also important to know what resources you might expect to inherit someday for your own planning purposes. 

5 Tips for talking to your Aging Parents about Money

1. Begin with a Broad Topic, such as their Retirement Plans

You could ask, Will you want to downsize? Or, what kind of care would you want if you become ill? It may get them talking more than if you just asked point-blank about their finances. And knowing more about their wishes will give you a better idea of how much money they may need.

2. Discuss your own Legal and Financial Planning Process

Adult children usually discuss recent projects and emerging goals with their parents. Sound legal and financial plans are important for your own future as well, so feel free to mention these objectives in regular conversations about what you and your family have been up to lately. Whether you’re just starting to look for a financial planner and legal counsel, or you already have a comprehensive plan in place that you simply review once a year, use these undertakings to facilitate open, honest conversations.

3. Inquire if you can take something off their plate

Pope says you could start with things that aren’t money-related like helping with grocery shopping, or finding a lawn mowing service. Then offer to help with income tax preparation. They may take you up on that! Because who really likes to do taxes? It will give you access to financial information that opens the door to keeping the conversation going.

4. Keep some topics Off Limits

Always be respectful of your parents’ privacy and independence and try to make sure your questions and comments are appropriate. Sure, you probably want to know if you can expect a bequest someday, how much it will be worth and whether other family members will receive the same amounts, but this information is not important. Refrain from asking insensitive questions like these. Your parents’ money is theirs to spend how they please, and they are likely to need most if not all of their income and assets to fund their care as they get older.

5. Check to see whether your parents are eligible for Financial Assistance

For example, maybe you can find ways to help them pay for prescriptions, health care, or even utilities. They’ll need to tell you their monthly income, how they spend their money, and what benefits they already receive. Mom and Dad may be more willing to share information if they know it could help them financially, especially if you take the lead and help them through the process.

Planning ahead can help make transitions in their lives easier, both financially and emotionally. That’s why it’s important to find an approach that fits you and your parents and start the conversation.

5 Ways to Talk to Your Aging Parents about Their Finances

1. Use a Direct Approach

If you have a good relationship with your parents and they were relatively open about money matters while you were growing up, there’s no need to beat around the bush. Simply let them know you would like to find out some information about their finances to give you peace of mind. You don’t necessarily have to ask them to tell you everything at once. Instead, you could start by asking about particular aspects of their finances.

2. Build the Proper Framework

It’s important to frame discussions so that parents don’t feel their privacy is being invaded or that their children are interested only in their inheritance. While the direct approach can be tempting, asking outright how much money your parents have generally isn’t advisable because it puts them on the defensive.

Instead, you could start off by discussing broadly the effects the pandemic has had on people’s finances and say you want to make sure your parents feel comfortable financially. Approaching it this way can help you gauge how they are feeling about their finances. Are they nervous? Mildly concerned? Relaxed? How they respond will help you better determine what the next steps may be. 

3. Ask for Advice

Some parents might be reluctant to have money talks with their children because they feel like it’s a reversal of roles. If you suspect that will be the case with your parent, start the conversation by asking for help with your own financial matters. For example, you could tell your parent that you want advice on how to save for retirement, whether you need a will, or how much life insurance you should get now that you have a family of your own.

The goal in asking your parents to give you advice is to get them to open up about the financial and estate planning they have done.

4. Talk about Your Own Financial Planning Experience

Plenty of financial advisers say that talking about your own financial planning experience can be a good way to get your parents to open up about theirs. Nelson said he often recommends to clients that they get their own estate planning done, then use that as a conversation starter with their parents. For example, you could tell your parents that you recently had a will drafted and want them to know where they can find it if something happens to you.

Hopefully, your parents will then let you know if they have a will or other estate planning documents and where they are. Or you could tell them that you recently met with a financial planner or took some other step to make a financial plan. You could share how helpful the experience was for you and ask whether they’ve done anything similar.

5. Find out if your Parents expect you to contribute Financially

Some people’s goal is to spend their last dollar on their deathbed, Ash says. If they have unforeseen long-term care expenses, they may reason they’ll go on Medicaid or move in with their children. But, the vast majority wants to provide for long-term care costs if they can, and they don’t want to be a burden on family. If that’s your parents’ expectation, however, finding out now can help you prepare.