Surviving financial discussions with your parents
by Sue Lanza
Some describe this conversation as of the most uncomfortable ever - second only to the dreaded "sex talk" that we endured from our parents as kids. The difference here is that the roles have been reversed and the stakes may be even higher this time. Yes, I'm talking about the knot-in-your-stomach discussion with your elderly parents about their finances.
Let's review why you want to have this little chat with one or both of your parents. Like many other brave souls before you, you have probably reached a stage in your parent-child relationship where an event or two got you thinking about the fragility of your parents; not their physical health this time but their financial wellness. For me, this moment came when my mother asked me to get her checkbook out of her purse. As I did, the checkbook fell open and I saw a sea of white space. I looked closer and found that there were sporadic entries and none appeared to have dollar amounts logged in. My mother had already exhibited mild dementia symptoms and living alone after my father's passing seemed to be getting harder for her. Now this - a new symptom of her decline that required my immediate intervention.
So how do we approach this most prickly of topics? Very carefully. My mother was part of the Greatest Generation where money, earnings and net worth was not discussed. This adds another barrier to a sensitive subject area. Experts suggest "backing into" the conversation by bringing up an example of something you may have recently done and then asking about a similar situation for your parents. You might say, "Hey Mom, I just opened a new checking account that has a free check balancing service at the bank each month. How are you doing with your bills and checkbook these days"? You may still encounter a dirty look or two but at least the door has been opened without putting your parent completely in a defensive mode.
What Financial Areas Should You Discuss?
Okay, so the alarming conversation is now underway and you need to be ready with your questions. Just asking your parents a generic question such as, "How are you doing?" will get you the generic answer. "Fine." Your parents are used to being in charge, taking care of you and keeping problems away from you. These talks generate worries for them about losing control and coming closer to their own end of life.
Despite the downside, here are a few financial questions that will generate discussion:
- How are you managing with your monthly bills? Do you need any help in managing your bank accounts and monthly money issues? Some parents may be fine and just need someone to sit with them to do all the bills together in one sitting. I found that my mom became overwhelmed at the idea of doing her bills so she procrastinated. She had mild memory loss so she forgot sometimes and next thing we knew she was behind a few months in her credit cards, potentially damaging her credit score (pristine until that point).
- What assets do you have? Where do you keep all the important papers related to these? Surprisingly, many adult children have no idea of the extent of a parent's portfolio: properties, stocks, etc. It is imperative to know the type of assets and where the documents are kept. Are they in a lawyer's office or in the freezer? Some of the paperwork that you may need to locate on a parent's behalf include:
- Death certificates
- Power of Attorney
- Advanced Directive, Health Care Proxy or Living Will
- List of bank accounts, credit cards, numbers and locations.
- Health and medical insurance information
- Originals of Social Security, Medicare, Managed care, dental cards
- Life insurance policies
- Tax returns
- Name of doctor, lawyer and/or accountant, if applicable
For my situation with my mother, the most important of all the documents listed above was convincing her to sign a power of attorney form so access to her assets would be granted if she became incapacitated. Without that paper showing that I had temporary permission to use her checking account, red tape could have delayed needed medical care.
- How do you want to handle future medical situations? What if you need extended care? Talking about advanced care planning and end of life issues can be thorny, but vital, in order for you to know your parent's wishes. You also need to have an idea about any existing medical problems and how they could blossom into a need for later care.
No one said this was going to be easy. In fact, it isn't. I remember my mother yelling at me that she didn't need me poking around in her business. but thankfully I won that particular battle. I had the temporary power of attorney form in place about one month before I suddenly needed it.
Unpleasant, distasteful and nauseating are some of the adjectives you might use during this process. Another one to describe you is courageous.