It’s important to create an open and honest dialogue with our aging parents about their financial situation, their desires and their concerns – before it’s too late; before an illness such as dementia makes this impossible. There are a lot of uncertainties when it comes to the aging process. It’s a source of angst for most families. Your family will be in a much stronger position when you plan in advance rather than react after the fact. When you fail to plan your options may be limited and the cost will most certainly be higher.
One important thing to note is that before you have the talk with your parents you should have the talk with your siblings and if you are in a relationship your spouse, significant other or partner. Are you in agreement on how you will handle your aging parents and any financial shortfalls that they might experience? What about from a caregiving perspective. What are your parent’s wishes; what can they afford; and finally what are the expectations of everyone involved. It’s important to come together so that there won’t be any surprises. Dealing with aging parents is a very stressful in the best of circumstances, juggling these concerns along with upset and frustrated siblings or partners can make a difficult situation far worse. Let everyone know what your expectations are and reach a common ground. This is true in regards to time and money. In most cases there may be 2 sets of aging parents to consider and each with a different set of needs.
Estate planning can be a difficult topic because it involves two sensitive issues: money and death. Two ways to approach the subject are by complementing them and sharing news about your own planning process. You could start by letting them know how much you appreciate how they have helped you over the years and then complement them where it’s appropriate. Maybe they have done a good job of saving over the years.
Another approach is to let them know that you have recently met with a financial planner yourself. By going through this process you were reminded that you really don’t know much about what their wishes are. Ask them if they would feel comfortable sharing with you more about their financial goals, their end of life wishes and their estate plans. If something were to happen to your parents they need someone they can trust to take over. People are living longer than ever and the risk of being impacted by an age related disease is increasing at an alarming rate. Who do they want to help them with this if they become frail and incapacitated or worse yet begin to suffer the effects of Dementia or other age related health issues? A great question to ask is: If they could design a lifestyle plan for their remaining years what would it look like? This should start the ball rolling.
Next we will look at how to talk to your kids about more than monopoly money.
This is the second of a four-part series. Click here for the first part.