As your parents grow older, one of the toughest things you will have to talk about is money. Money is a sensitive topic on its own, and most of our parents grew up in a time when financial information was kept private. Plus, few parents appreciate being told what to do by their children.
While it’s an uncomfortable discussion, don’t wait. You’ll certainly want to talk before impairment becomes an issue, or you face a medical or other crisis.
Here are 5 tips for having successful financial discussions with your parents
1. Set the tone for a successful discussion up front
Be respectful and let them know ahead of time what you hope to achieve by talking. Be specific; make sure they know your goal is to help them protect their assets as they age. Recognize that your request to talk may catch them off guard, so be patient.
2. Make them feel comfortable
Schedule time to talk in a private location where your parents will feel comfortable, away from distractions like grandkids or pets. Keep the mood friendly, helpful and upbeat. If you sense that your parents are feeling tired or stressed, end the conversation and reschedule. Be patient and know that this will likely require more than one meeting.
3. Help them prepare for the discussion
Let your parents know your initial goal is to help them gather important financial information, so ask them to assemble these items:
- Personal information (SSN, birth and marriage certificates, etc.)
- Names and phone numbers of important contacts (financial advisors, accountants, attorneys, etc.)
- Insurance details, including policy numbers and beneficiaries (life, homeowners, auto, long-term care, health such as Medicare or Medicaid, etc.)
- Financial information (bank and investment accounts, retirement accounts, pensions, debts, credit cards, location of stock or bond certificates, etc.)
- Estate planning documents (wills, trusts, power of attorney documents, living will or medical directives, etc.)
- Real estate details (titles, deeds, mortgage documents, etc.)
- Military service documents (for information on veteran’s benefits)
- Documents for any prepaid funeral or cremation arrangements or burial plots
- Security data (passwords, keys or access codes to their home safe, safety deposit box details, etc.)
- Tax returns
- Make copies so you can keep them in a safe place
4. Discuss the day-to-day finances
Talk about how they pay bills and ask them to put together a list of what they pay on a regular basis. Most couples have one designated person who handles the finances, so this list is helpful for the surviving spouse if something should happen. Be sensitive to the fact that they may have debt you didn’t know about or fewer assets than you expected. If this is the case, reserve judgment and consider talking about that issue another time.
5. Plan for the future
Talk about the plans your parents have in terms of long-term living arrangements. If they want to ‘age in place,’ make sure they can do so safely, and make modifications to their home (install grab bars in the bathroom, for example) when needed. Review their finances with them to help them learn about their options. Consult an Alaska USA financial advisor to talk about long-term care insurance or other financial alternatives.