How to Talk With Your Parents About Their Financial Affairs
An article I read recently suggested several reasons they may be wary. Some parents worry that their kids will lose motivation to work if they thought they might inherit a substantial amount of money. Others are concerned their children might pressure them for gifts, or might get greedy and try to take control of their finances as they get older.
These parents’ fears are not unfounded. According to the article, financial elder abuse is a $3.2 billion a year problem. For example, I recently read about a woman who was trying to evict her 91 year old father from his home, which she had conveyed to herself illegally under a power of attorney.
Fortunately, these stories are not the norm. Most children want what’s best for their parents. But without crucial information regarding their parents’ finances, such as where they bank or the bills they pay, they will not be able to step in to help if their parents become incapacitated.
If you are a concerned child of elderly parents and haven’t had a conversation with them about their finances, the article provides a few tips to help you broach the topic:
- Explain that it is important for you to know about their finances so that you can help if it becomes necessary.
- Gather information about the type of assets they own, where they are located and how to gain access to them in the event of an emergency.
- Determine if they’ve done any long term disability planning. If not, encourage them to talk with a financial planner.
- Involve siblings or other close family members in the conversation to discuss what should happen in the event of an emergency.
An integral part of this discussion, which was not mentioned in the article, should be whether your parents have engaged in estate planning. At minimum, they should have a Will, Durable Power of Attorney, Medical Power of Attorney and Directive to Physicians.
You can read Has Your Aging Parent Told You to “Mind Your Own Business”? by clicking on the link.