One of the most difficult conversations many of us face with parents is talking about money. Parents worry about losing their independence or confessing any weaknesses. Parents may also fear losing control of resources, may want to avoid confronting their own mortality, don’t want to stir up family conflicts, and may have trouble deciding who should receive assets or be in charge of the estate. Adult children have a hard time questioning their parent’s ability to do what they have been doing for 50 or 60 years. None the less, the time to have a conversation is now before a crisis occurs. Trying to find documents and making critical decisions under pressure can cause unnecessary stress and panic for the adult children.
Here are some openers to start the conversation while parents are still healthy and in their own home:
- When they turn 70, inquire about whether they are set up to take required minimum distributions on retirement accounts.
- Take care of your own financial documents. You can mention to your parents that you’re working on your financial arrangements and have they set up theirs?
- Use other people’s experience as an example. Perhaps a friend or acquaintance has had issues that can serve as an opener to start the discussion with your parents.
If you have siblings, discuss your concerns and plans for approaching your parents with them. Maybe only one or two children should broach the topic to avoid seeming like you’re ganging up on your parents. Let your parents know that you respect their privacy but are concerned that if something went wrong you would not be able to help them. Have the conversation when things are calm and there are few distractions. Information you should have includes a list of medicines, names of doctors, an attorney and financial advisor, copies of wills, power of attorney, and medical directives. You also should have a list of bank and investment accounts, passwords and insurance policies. Know where copies of tax returns and other documents are kept.
This is a process to start sooner rather than later. You’ll be glad you did.