"The talk" in adolescence might seem like the most awkward conversation that kids could ever have with their parents, but it turns out that discussing money as an adult with your aging parents can be equally difficult.
"Approaching one's parents about their finances can be a touchy subject," says Bill Demaree
, president and founder of Demaree Retirement Services. "You don't want to make them feel belittled or that you're trying to tell them what to do, but you want to make sure they have a plan in place to prepare for what could happen."
Time and time again, says Pat Simasko
, founder of Simasko Law, which specializes in elder law and estate planning, the hardest part of any plan is to get the person into the conference room in my office.
"It seems that events trigger the appointment," says Simasko. "Retirement, an illness, or maybe a loved one who has passed away prompts people to start thinking whether they have their legal or financial affairs in order."
Starting the conversation
Having a family meeting
can be difficult, particularly if your parents have never talked about their legal or financial affairs with their children, says Simasko.
"Some people aren't comfortable talking about finances with their parents, because it's too emotional, especially for most men," says Demaree. "But the emotional aspect is the very thing needed to help move people to take action."
Demaree recommends starting with a story that your parents can relate to about someone they know or someone in the news whose failure to plan caused difficulties. You want to interact with your parents, not make a presentation.
"Mention how this made you think of your parents and how you want to make sure they're prepared for the unexpected," says Demaree.
Simasko says this conversation could play out this way: "You know, a friend of mine's parent was just hospitalized and the kids had a terrible time, because they couldn't find any of the paperwork or financial paperwork. Did you ever get your estate in order
? If you did, can you show me where the paperwork is located?"
He suggests following up with a comment about how many years it has been since the paperwork was prepared and that the laws have likely changed. Suggesting a consultation with an elder law specialist would be natural at that point.
Important topics to cover
Discussions with aging parents should cover a wide range of topics, including the following:
- Designating a medical and a financial power of attorney
- Taking care of bills if someone is in the hospital
- Long-term care insurance and life insurance policies
- Preferences for medical care and future housing needs
Simasko suggests identifying more than one person as a power of attorney in case the first person is ill or unavailable.
If your parents seems to be having more difficulty managing living independently, that's the time to talk more seriously about their options.
"Some spouses say, 'I'll take care of you no matter what,' implying they will personally care for the other person if anything happens," says Demaree. "But what if, for example, the other spouse is not well themselves and may be too weak to help someone get in and out of the shower? Instead, talk about how you'll do everything in your power to keep them home, but discuss putting together a plan B just in case."
Simasko says that talking to an estate planner with experience with Veterans Affairs
, Medicaid, or other government benefits is important, because those programs could help pay for assisted living or in-home care.
"Start looking for housing before your parents fall," says Simasko. "Very few parents want to leave their home, and they sit isolated for days at a time. Modern facilities are beautiful and provide much-needed care, support, and social interaction."
By the way, Simasko says, when people come in with their aging parents, it's shocking how few of the adult children have their affairs in order. Don't forget to address your own needs along with those of your parents.