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Tips for Talking to Aging Parents About Their Finances

July 11, 2022
Woman teaching mother how to access something on cellphone

Conversations about money can be uncomfortable and awkward. And if you have aging or ill parents or parental figures, these chats can be particularly difficult. Adult children often worry about coming across as overbearing or even greedy and parents may struggle with the role reversal and their own fears around aging. However, it is very important to talk about finances while aging parents are still in good physical and mental health. These conversations are often easier than you expect and it will help you to relax if you learn that plans are in place or to take action if there are things that need to be addressed. Here are some tips for talking to a parent, parents or loved one about their finances and to encourage an open dialogue about finances moving forward.

Time it Right

Like any difficult conversation, finding the right time and place is key. If you’re rushed, surrounded by people, celebrating a holiday or in an unfamiliar place, you’re less likely to be successful or have a positive experience. Approach your parents in a comfortable, quiet setting when everyone’s well-rested and relaxed.

Start Early and Go Slowly

To avoid having to make quick and emotional financial decisions after a health crisis, reach out to your parents about their plans before you actually think you need to. As a loose guide, many advisors follow the 40/70 rule. If you’re in your 40s and/or your parents are in their 70s, it’s time to start talking. Just remember that discussions about finances aren’t usually completed in a single conversation—especially if there hasn’t been any significant planning. If your parents are resistant or respond defensively, try your best to keep your emotions in check and revisit the topic again later.

Tailor Your Approach

How you initiate financial conversations will depend on the relationship you have with your parents and your unique family dynamics. You may be able to ask them very direct questions, but if you need a more subtle approach, there are strategies that can help. Mention that you recently drafted a will and share where your loved ones can find it if something happens to you; share an anecdote about a friend whose dad had a severe stroke and his family couldn’t access finances for his care; or ask for advice around long-term financial planning. The conversation will likely evolve from these starting points. Let your parents know that you love them and just want to make sure that they are taken care of and that together you are able to support their wishes.

Cover Key Topics

Regardless of your approach, there are a few areas you should address during these series of conversations. Estate planning is a top priority to ensure that your parents have an updated will outlining how their assets and property will be distributed. Also verify that they have powers of attorney (POAs) in place in case they become incapacitated and need someone to manage their finances or make health care decisions on their behalf. Wills and POAs can only be completed in good mental health, so these documents need to be created before a medical emergency. It’s also a good idea to establish whether they can afford a long-term care facility or home care services to give your family time to plan. To prepare for current long-term care accommodation costs and learn more about rate reduction programs, click here. This website includes more details around getting help for seniors who need support at home. Try to also confirm that tax returns are up-to-date and any outstanding taxes have been paid so that they are eligible for government benefits.

Establish Roles

It’s not necessary to have the entire family present for financial discussions and a big group can sometimes feel confrontational. The child closest to the parents—geographically or relationship-wise—or the sibling most comfortable with financial planning may be the best family member(s) to initiate. For other families, the adult child who lives close by may provide hands-on care while another sibling manages the parents’ finances. Whatever you decide, just make sure that siblings or other important family members are kept informed and everyone understands their role moving forward.

Talking about money with an aging parent or loved one is not a one-time event and will require time, energy and patience. If you are struggling, a neutral and experienced financial planner may be helpful. Having these conversations early will mean that you have a plan in place, will know what to do in a crisis and can ensure that your loved ones’ wishes are protected.

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