Talking to parents about finances is challenging. It feels uncomfortable because “money talk” in our society is considered a taboo topic of sorts. Additionally, the roles of parent and child are reversed. You’re now in the position of making sure your parents are taken care of. But you’re not alone in feeling this discomfort. According to a survey by Fidelity Investments, 52% of adult children say they have not had any detailed conversations about estate planning with their parents. Here are some tips on how to talk with aging parents about finances and estate planning.
When Is the Right Time?
Ideally, you should have financial discussions with your parents before their retirement. But often, this time has come and gone before people start thinking about these issues. If this is the case, sooner is better than later. It’s important to understand what your parents’ plans are. Have they prepared to cover their living expenses, medical expenses, and long-term care? If they’ve done estate planning, you need to know what their documents dictate in order to best help them.
Why Finances Can Be a Difficult Topic for Parents
Aging parents sometimes fear losing control of their finances, or they are scared or embarrassed that they don’t have a solid financial plan. Also, many people are uncomfortable thinking about dying, much less talking about it. For these reasons, it’s important to take things slowly and frame the conversations in light of your concern for them. Communicate that you want to help.
The Impact of Saying Nothing
If parents are expecting you to assume the role of executor for their estate, at a minimum, you should know. According to a Fidelity survey, 92% of parents expected one of their children to be the executor of their estate — however, over 25% of children surveyed weren’t aware that their parents expected this. Almost a third of the families surveyed disagreed as to whether loved ones knew where to find important estate planning documents.
The executor of an estate should know the location of important estate planning documents like a will or living trust, healthcare proxy, and living will. It’s helpful if they also understand their parent’s intentions. Ideally, parents should review the documents with the person who will play the role of executor for the estate.
Not having a candid discussion about your parents’ financials and expectations can cause a significant strain on everyone involved. Waiting until aging parents pass away or, sometimes worse, become mentally or physically incapacitated, is a burden that comes with emotional stress.
Tips for Starting the Conversation of Estate Planning with Your Parents
Finding a good time and an effective way of opening the conversation can be the toughest part. Here are some tips to open the conversation and ideas for what to do while you’re having it. The more prepared people are, the easier it is to know how to talk to aging parents about finances.
1. Ask for a Meeting
Instead of diving directly into the topic, mention reading an article about it or bring up a situation you are aware of where someone didn’t know their parents’ plans. You can also ask questions about where to find your parents’ estate planning documents, like their will. These approaches will help you to gently raise the subject to get your parents thinking about it without diving into the details. Then, ask for a meeting to talk in more detail.
Giving your parents time to think and to collect any information they may need will help them not feel pressured. If you have siblings, it’s a good idea to include them in the conversation so everyone is aware.
2. Focus on Listening to What Your Parents Want
Keep the focus of the conversation on your parents’ wishes. When you talk with them, focus on what they want and make sure they understand that they will benefit from the conversation. By ensuring you understand their wishes, you can better carry them out, no matter what the future may hold.
Make sure to do more listening than talking. Listening helps people feel understood and comfortable. You don’t need all of the details to be able to help your parents with their planning or to understand how to carry out their wishes.
3. Communicate Carefully and Sensitively
Keep in mind that this discussion is likely difficult for all of you. Exercise empathy and compassion, and be patient with the conversation. It’s not easy talking about or even thinking about our growing old, even though it’s reality.
This is likely to be an ongoing discussion, so consider doing a little at a time. You don’t need to have all of the answers at once, and you may learn more by giving the conversation some time to flow.
4. Don’t Make the Conversation about Money
You’re more likely to get your parents to open up about their finances if you begin the conversation with big-picture topics. Asking them about their retirement plans may be a good start. Their responses may help you to understand their level of planning so you can better prepare for the next conversation.
You can also ask them what type of care they would want later in life. This can open the conversation about estate planning documents like a living will, and financial and health care power of attorney. While you’re talking about these documents, you can raise the topic of their financial plan to cover any necessary expenses.
Discussing plans for downsizing or what to do with treasured collections also provides an opportunity. If you’re using Thingealogy to help your parents organize their items or create a memorandum of personal property, this activity provides an ideal segue.
If you think they are uncomfortable with the reversal in roles, where you are seeking to care for them, try asking their advice about your own retirement plan. Once the conversation is started and they are feeling more comfortable, you can broach the topic of their own estate plans.
Knowing how to talk to aging parents about finances and estate planning can be challenging. But, by approaching this sensitive topic in a sensitive way, you can have an open and meaningful conversation that will bring peace of mind to all of you.
Thingealogy® is a free story-telling app with beneficiary-assigning features for your tangible personal property. Download the app, and try it out for yourself!
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