How to Talk to Your Aging Parents About Their Money
Having difficult conversations now will help everyone later.
Money and death are conversational taboos, but that doesn’t mean you’re off the hook. Getting your folks to open up about their finances now, no matter their situation, will make everything easier later on. Understanding where your parents stand financially makes it possible for you to help them however you can, and having these challenging conversations now rather than later is better for all involved.
Get the ball rolling with these conversation starters, based on the position your parents seem to be in. Make sure your own finances are squared away—you want to be prepared if the conversation comes around to your situation—gather your support team (spouses and siblings are a good place to start), and start talking.
If your parents are well-off
Wealthy parents probably already have an estate-planning and financial team in place. Even so, you should get an update. Use your ages as a guideline for when to broach the subject.
“I have a 40/70 rule, meaning if you’re 40 or your parents are 70,” says Jody Gastfriend, vice president of senior care at Care.com and author of My Parent’s Keeper. “But the sooner the better. When my dad got dementia, I realized you can never start too early.”
To make the conversation feel less threatening and intrusive, open by saying you need their advice. Then segue into your questions: What do they believe are best practices for handling finances? What paperwork have they completed (long-term care insurance, living will, financial power of attorney)? What are their thoughts on in-home care versus assisted living, and how do they plan to afford their lifestyle over the years? Be sure to find out how to contact their lawyer or financial planner, as well as the whereabouts of their estate-planning documents.
If your parents are in debt
Debt is a reality for more than 60 percent of Americans ages 65 and older, but you might not be aware whether that’s the case for your mom and dad.
“Many parents are embarrassed and don’t want their children to know,” says Shirley Whitenack, an eldercare lawyer in Florham Park, New Jersey.
If they’re in the hole when they die, their debt will likely not get passed to you, unless you’re a cosigner on their credit cards or mortgage. (The debt will be passed to the estate, however, and needs to be resolved before any inheritance is distributed.) If your parents have to lean on you financially in their later years, decide the best way to step in—maybe bills remain in their name but you pay them from your account, for instance.
You should also try to understand their top money worries: “Let them know you want to help them live comfortably and avoid bankruptcy,” Whitenack says. Suggest they reach out to a nonprofit credit counseling agency for help creating a budget, says Bill Fay of Debt.org. You could also check the nationwide Eldercare Locator to find local organizations that assist with financial planning or estate documents.
If everything seems A-OK
When calm, clear minds prevail, pounce on the chance to get organized. Start the conversation by saying, “I want to be helpful in the future, so I need to gather information now, while life is good.” Just be clear that you’re not threatening their independence, Whitenack says—you simply want to be prepared should something unexpected pop up (who saw Covid-19 coming?).
Find out where your parents keep the important bank documents, and start an “In Case of Emergency” file; scan the paperwork and share the file with your siblings. While you’re at it, see if your parents need to streamline their finances—maybe they can consolidate accounts so they’re easier to manage. A budgeting app like Truebill or Clarity Money can track subscriptions and expenses in one place. Ask your parents to sign up and share the log-in so you can check in if necessary.
If a parent is ill
As tough as it is, right now you need to be direct. Make sure your parent has advance-care directives, and get them to complete financial and medical power of attorney forms to grant you (or another family member) the right to manage the money and health-care decisions that will, alas, come fast and furiously, Whitenack says.
If your parent has a diagnosis but is still active and cognitively healthy, strive for a balance between candor and compassion. “You don’t have to take charge,” Gastfriend says. “That can make your parent feel like their rights are being taken away.”
No matter what, discuss long-term care wishes and figure out a budget: The average cost of an assisted-living facility is $48,600 a year, and in-home care averages $23 an hour. “Eldercare is an enormous cost, and the majority of people aren’t well-off enough to self-fund it for years,” Gastfriend says.
If you have a scattered family
Mom lives in Florida, you’re in Indiana, and your brother is preoccupied with his in-laws in Vermont. Still, everyone should get on the same page about your parents’ expectations. First decide whether you or a sibling will start the conversation, then clearly communicate that you’re there for your parents, despite the hundreds of miles that separate everyone.
Ask them to share their long-term plans, for both their finances and day-to-day care. Your family may also want to consider hiring a senior-care expert to assess safety issues in your parents’ home, advocate for them, and mediate family discussions (find one at Aging Life Care). An initial consultation can range from $300 to $800, and additional services can cost between $100 and $250 per hour. Always stay in the loop—and don’t be shy about passing the Mom-and-Dad baton to a sibling if your parents are avoiding the conversation. Sometimes all it takes is another voice to get people to listen. It can be frustrating, but it just might do the trick.