Finances are a subject many families are hesitant to discuss, especially between parents and children. But as your parents age, there’s a chance that they may become less capable of managing their finances. This can be a delicate subject to approach for everyone involved. While you may be met with some resistance when bringing up the topic, it’s important to have open discussions with parents about their finances and potential issues they may face as they age.
You don’t want to wait until past due notices start piling up or your parents fall prey to a scam to have these discussions. It’s easier to talk about it in advance than to fix an issue after it’s happened.
Here are some suggestions for preparation steps you can take right now.
Be responsible with your own finances
If you plan on helping your parents, you should be in a financially secure place yourself. Make sure that your own financial strategy accounts for your aging parents.
Find the best way to approach the subject
You probably know best about how your parents may react to a conversation about their finances. If they wouldn’t react well to a formal meeting, try to work finance-related topics into your regular conversations. Be patient, as they may not open up initially.
Is there an existing plan?
Talk to your parents about their needs and priorities. Determine if they have an estate plan in place, or if they are working with a planning professional. If they haven’t done so recently, they may want to look into doing so.
Some of the items that may need to be addressed include (but are not limited to):
- Current will
- Living trust
- Durable powers of attorney
- Medical directives
- Insurance policies
- Credit card and loan documents
- Bank and investment statements
- Social Security information
Don’t go it alone
Be sure to include your siblings in your conversations. They can help ease some of the burden on you and provide support while you talk to your parents.
It can be hard for parents to feel like they are letting go of their independence. They’ve spent most of their lives running a household and being in charge. Many of these suggested steps can be taken gradually, and you can make adjustments as your parents become more comfortable with discussing their financial picture.
If you have questions or are interested in discussing further, please contact your American Federal Banker.