How to Talk to Your Aging Parents About Their Money

By Ken and Daria Dolan, Dolans.com

posted: 14 DAYS AGO

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Money is a sensitive subject and family relationships are fraught with emotion. So when you put the two together, the combination can be downright combustible.

Yet, talking about important money issues with family members now can save you plenty of headaches and heartache down the road.

Defensiveness. Fear. Misunderstanding. All are rampant when it comes to talking with your aging parents about the very sensitive issue of money.

"My son is treating me like a child."

"My daughter is trying to take over my finances."

"This is just the first step to my kids taking away my independence."

"My kids are after my money!"

For most families, "money" and "old age" and "wills and trusts" are among the toughest subjects to broach.

Our parents (like most of us) were raised not to talk about their money, period. It's a "personal" matter. On top of that, some parents still look at their 30-, 40-, 50-, and 60-year-old children as "kids," and can't imagine having a weighty discussion about something as personal as their money with "the kids."

It's little wonder that so many people avoid talking to their parents about money. Yet, it is one of the most important conversations you can have.

Today, personal finance experts Ken and Daria Dolan of Dolans.com help you navigate this tricky situation.

Don’t Wait Until It's Too Late

Nancy, from Virginia, wishes she had started this conversation with her parents sooner.

"My Dad always handled the money in our family. My mother never wanted anything to do with it and understands little about where things stand for them financially. We could see the early signs of Alzheimer's starting to take their toll on my father, but we always believed we had more time. By the time my siblings and I finally agreed that we needed to talk with him about how we could help him, his memory had slipped enough that I'm not entirely sure we know where everything is. We need to be sure our mom will be able to take care of him, and herself."

"But my mom isn’t willing to talk about money. She's dealing with worries about watching her husband of 50 years slip away each day, stress about handling all the household, and now she is feeling threatened by having her children asking questions about their finances. She wants to maintain her independence and dignity, too."

"On top of already sensitive discussions about money, we are dealing with very emotional issues about long-term care plans, healthcare and how much help she needs."

If you ask the right questions the right way, talking about money issues with your parents becomes a "win-win" situation. You can rest easy knowing how your parents want important decisions handled, where they keep important papers and whether they are in good shape financially.

Over the course of these conversations, reassure your parents that you're not taking over the helm of their finances; you're merely helping them steer along the financial waterways -- and getting the important information that you'll need to step in if it ever becomes necessary.

Your 3 Goals

You'll need to build a bond of "money trust" between you and your parents before they'll feel comfortable having you know everything about their finances. Don't attempt to do this in one big conversation.

Start these conversations early enough so that you'll have plenty of time to build trust and get the information you need. The first step is to gather basic information about their finances so that you can help them with three main objectives:

1. Maximize their available cash

2. Protect the assets they have amassed over many hard years of work

3. Maintain their independence

Not sure where to start? Here are seven questions to ask your parents about their finances.

Needless to say, if your parents, like most parents, fit into the difficult-to-talk-to category, you will have to employ some high-level diplomacy to get this conversation started.

Tips for Getting the Conversation Started

Here are some tips for ways you can get this conversation going in a non-threatening or intrusive way.

1. Use cues from your parents to broach the subject.

The next time your mother or father makes references to "when I’m gone," or to the financial condition of friends, to a friend who passed away or who is in poor health, use this as your chance to start a conversation.

Squelch your instinct to reassure your parents that "you’ll live forever." Instead, use their opening gambit to start a meaningful conversation about money.

2. Find a reason to begin talking about money issues.

Mention a relevant article from a newspaper or magazine, or a topic that you recently discussed with a friend. You can even print out this article, or if they are online, email it to them.

Offer a rationale for the conversation: "Everything is going so fast these days … we should start planning for the future as a family!"

3. Start with something less threatening.

Here's an easy conversation starter: "Need any help with bills? Bookkeeping? Tracking bank fees? Taxes?" One way you can get involved is by offering to be your parents’ "financial secretary."

You can use this financial documents checklist to make sure you (and both of your parents) know where all their important financial documents and accounts are located.

You can help handle their correspondence, phone calls, paperwork, and investment details. It's the best way to learn the most about their situation. But remember, as you take on new responsibilities for your parents, always double-check their comfort level to be sure that you aren't over-stepping.

Introduce a possible scenario and discuss different situations, beginning with the least threatening. For example, you can ask:

· If they have a pension and how it works

· If they are working with anyone they trust when it comes to their money or if they handle it all on their own

· How long your parents think their savings and investments will provide for them

· Your mom if she knows enough about their finances if something happened to your dad, or vice versa

4. Tap into your parents' natural instinct and desire to help you.

As we get older, the parent/child relationship can be turned upside-down. No parent wants to feel like their child is now the adult in the situation and they are the child.

So, go to your Mom or Dad for advice. Tell them you're thinking of revising your own will, or trying to decide where to invest for retirement and want their advice. That might open up dialog about their own investments, their level of investment expertise and estate planning.

5. Respect above all else.

When you're talking about money, stress to your parents that you are not interested in taking over their bank accounts, their lives or their independence, and that no decision will ever be made without them. Remember how it felt when you were a kid and your parents "decided" your future without asking you first? Keep that feeling in mind when you're talking with your parents.

If the initial conversation becomes uncomfortable, postpone further discussion until another time. You might try bringing in a trusted family financial adviser to back you up. Sometimes the presence of an "outsider" can be helpful.

6. If all else fails, ask one of your parents' peers to broach the subject with them.

Having a friend suggest that it's time for them to talk to you about their personal finances can feel much less threatening than you approaching them.

If you are tempted to put off the conversation any longer, imagine for a moment what it would be like to have to jump into your parent's finances tomorrow, with no information.

Could you find important personal financial documents? Would you know what their wishes were? How long would it take you to track down their bank and brokerage accounts, insurance policies, wills and trusts, etc.?

As you tackle the financial and emotional issues surrounding your aging parents, here is some other advice that we hope will help you:

· 7 Questions to Ask Your Aging Parents About Finances

· Support Your Aging Parents Without Going Broke

· Your Guide to Long-Term Care Insurance

2009-11-09 13:19:30