Talking to Aging Parents About Finances

You see your parents aging and you begin to become concerned about their finances.  They may not have shared much with you about their finances or you may be fortunate that they have been open with regard to what they have accumulated.  Regardless of which scenario is true for you, talking about finances can be a delicate conversation.  If both of your parents are alive, this may be more appropriate guidance whereas if one parent is deceased, the survivor may have shared more of this type of information with you. 

How do you start the conversation?  The icebreaker could be to mention to your parent(s) that you are doing your estate planning or were talking to your financial advisor or accountant.  Do they have their affairs in order?  When was the last time their planning was updated? 

Many times, parents who are comfortable with their financial situation – they have income and assets to maintain the lifestyle to which they are accustomed – have their planning in order. You could engage in a conversation as to what their beliefs are for handling finances.   Asking for their advice can change whether they feel threatened with the conversation or whether they feel good to be giving parental advice. 

If your parents have been living from SS check to SS check and you suspect they might be in debt, they may be too embarrassed to tell you.  They may not want to burden you; they could be ashamed of their situation; they may have forgotten about having assets they don’t access to on a regular basis.  Whatever the situation, it is not something to be ignored.  You don’t want your parents to be bothered by collection agencies or creditors; you wouldn’t want them to perhaps lose their residence; you want to see them enjoy their golden years with as little stress as possible.  If you think that they have credit issues, find a way to help them – could the children help with their bills? Should a credit counselor be engaged? Should an investigation be made to see where their assets have gone?  Reach out to your team of professionals to get guidance on what to do.  If your parents die with debts, their estate becomes obligated to pay before assets are distributed to the beneficiaries.  If there are fewer assets than debts, there may be insolvency proceedings required for the estate.  Do what you can to avoid this situation. 

If your parents are ill, you cannot take a soft approach.  You need to step in and make certain that their affairs are in order.  Do they have a living will or health care directive?  Do they have sufficient assets to cover nursing care in or out of a facility?  Might you need to consider making alternative arrangements for your parents to live with another family member?  Often times, we find that when a parent becomes ill, it is the first time that the family gets involved in looking at these matters.  And, it is not an option. It has to be done and NOW.  Avoid that situation. 

These conversations are best had in person, but that may not be possible.  Is it a conversation to be had with one child and parents or with all children present with parents?  That is a decision that only you can make.  You know your parents best, but whatever you do, don’t approach the conversation in a threatening tone.  That could only put them on the defensive and make it more difficult. 

Information that is helpful for you to know is the identity of their attorney, their accountant, their financial advisor.  This is their team who can best piece together their financial situation and planning needs.  Working with one without the others can lead to gaps in the planning. If your parents are computer friendly, do they have passwords written down where you could locate the same?  Where do they keep their original documents? 

Some useful tips to make things easier for everyone is to analyze if financial accounts might be able to be consolidated.  Suggest that they create a “911” or “ICE” (in case of emergency) file to make locating important information easier. 

Good Luck.  This is not an easy conversation to have.



About the Author

Kay Sowa is a paralegal in the Trusts and Estates Group at Capehart & Scatchard, P.A. She is an IRS Enrolled Agent, an Accredited Estate Planner®, and a Certified Trust and Fiduciary Advisor. She oversees the trust and estate administration practice for the firm. She is an accomplished author and lecturer who has frequently spoken on behalf of a number of organizations including the National Business Institute and the Institute of Paralegal Education.

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