Talking With Your Elderly Parents About Lifestyle and Money—Part 2

The previous article focused on the physical needs that your aging parents may have and how to deal with those things that your parents are no longer able to do physically, due either from physical infirmity or from a dementia or Alzheimer’s condition.  This article will focus on how to talk with your parents about money.

While everyone has been raised a little differently, most of the prior generation has tended to keep their finances very private.  Parents in most cases have not ever spoken with their children about what their assets and liabilities are, much less what their income and expenses are.  To ask about these things is not deemed to be “polite conversation”.  Yet, as our parents age, how do you know whether your parents are paying their bills or even have enough money to pay their bills?  If they needed extra care, could they afford it?  Is their home paid for?

Handling your own finances is one of the badges of independence that you possess.  It is difficult to have those discussions with your parents about their finances.  There are several suggestions that may be helpful.  One may be that you have recently worked with a financial planner on your own finances and were very pleased.  You may suggest that your parents do the same and maybe use the same person for their financial planning.

Another suggestion might be that you have also done your estate planning, perhaps using a living trust as part of your estate planning.  You may suggest that your parents should consider doing that, as well, which would protect the surviving spouse and make sure that their bills are paid during times of infirmity.  As part of the estate planning process, your parents will need to name successor trustees to themselves, which will probably be you.  That will at least ensure that you will be able to take over for them in the event that they are no longer able to act.  Most trusts have language whereby their children and your parents’ physician determine when they no longer have the mental capacity to act as trustee.

Sometimes, with a living trust in place, a recalcitrant parent may find it acceptable to allow you to be a co-trustee with that parent while they are alive.  This may allow you to gain access to their financial records to make sure their bills are paid, that checks have been deposited and their financial investments properly monitored.  Sometimes that parent is gradually just losing interest in taking care of paying the bills.  Perhaps, you can offer to write out the checks for the bills for their signature, as a first step in having the parent accept your assistance.

There is no magic formula for breaking the ice on this subject.  There is also no magic age that turning over management of financial assets should take place.  We have all seen cases of parents in their 90’s still being sharp and perfectly capable of taking care of their own finances.  We have also seen cases where the parent is in their 70’s and is not capable of doing so, due to physical or mental infirmity.

You will know when it is time.  Using your own case as an example of you doing financial planning or estate planning may open the door to conversations with your parents that may result in their financial futures being properly managed and having an adequate plan for the future.