The Talk You Didn’t Have with Your Parents
Money is a difficult subject to talk about, but it’s especially difficult with our aging parents and relatives.
Why is it hard? Privacy, independence, mortality, reversal of roles. It might reveal a lack of knowledge, or past mistakes. It might be an acknowledgement of diminishing capacities. And we don’t want to make assumptions about how our relatives intend to leave their money.
But the “price” of not having that talk can be steep. I know of two cases where aging parents have been the victims of fraud and financial abuse. In another family, the lack of planning forced an older family member from her shared home.
A recent article in the NYTimes illustrates the need for that conversation.
Perhaps it’s best as a series of conversations over time. If you think it will be a difficult subject, start slow. Think about the other’s perspective. Be genuine about your concerns and willingness to help.
What kind of help might be necessary?
Generally, there are two areas:
- help now with practical aspects of life that can become more difficult
- estate planning
For help now, here are a few ideas:
- oversight of the checking account and other financial accounts – arrange for duplicate statements or online access
- bill paying
- joint access to the safe deposit box
- one person in the role of health care proxy with the proper legal documentation; contingent health care proxies can be named.
- ensuring health care wishes are known by that proxy
- one person in the role of durable power of attorney, to be able to make financial decisions if needed
Estate planning is important as an ongoing activity — every time there is a change of circumstances or every few years. For example, a new bank or financial account must be titled correctly following the plan for the estate. Likewise for any new property.
An unplanned estate that goes through probate (court-supervised settlement) causes much higher costs and potentially months or years of delay. Probated estates are public record: anyone can see the full financial details, and sometimes this attracts people you don’t want. A planned estate can usually avoid probate entirely.
If you haven’t taken some of these steps yourself, perhaps you can go through the process together.
Is it time to begin that conversation?