Having the Big (Financial) Talk with Parents

Your client’s parents have been there for their children all their lives. Now that they’re nearing retirement age, it’s time to return the favor — especially when it comes to their financial well-being.CNNMoney suggests families should talk about their elders’ finances when the parents turn 70 or the children turn 40 (https://tinyurl.com/3hp63tr). Other experts suggest it’s never too early to have these discussions.

But no matter which strategy your client chooses, having those conversations can spare their parents — and your client — financial hardship in the years to come.

When judgment becomes clouded

With age-related issues such as worsening eyesight, physical deterioration and the risk of Alzheimer’s disease, keeping track of their retirement nest egg and monthly bills can become a never-ending battle for your parents.

Baylor College of Medicine associate professor Robert Roush toldCNNMoney that neuroscience research indicates that the cognitively impaired make more financial errors than those who are not. But cognition problems don’t only affect an elderly parent’s ability to pay bills. Those with impairments are easier prey for con artists and scammers who would cheat the elderly out of their money — sometimes their entire life savings.

Make it a give-and-take conversation

It’s one thing to want to help, of course, and another to get parents to lettheir children help. They’ve been financially independent all their adult lives and giving up that freedom, that responsibility, is emotionally difficult.

Experts say one of the ways to get your client’s parents to open up is to talk about their own finances. Clients can tell parents about their 401(k) plan, investments and their will — and then ask their parents if they have advice, which puts them in the familiar parental role, CNNMoney says.

From there, they can broach the subject of their parents’ situation. If they steer the topics gently, their parents most likely will see it as a natural conversation instead of an interrogation.

The list of topics needed information about is varied. First, clients need to know where their parents’ important documents are located, and they should make sure they have access to them. Trusts, wills, advance healthcare directives and living wills, powers of attorney, life insurance policies, bank and other financial accounts, and financial and legal representatives are just some of the information you need, Forbes says (https://tinyurl.com/aqvukw8).

Also, clients should help make plans for where their parents will live during retirement, how they’ll pay their expenses and who will take care of them if they can no longer do it themselves. And then have a contingency plan in case those first plans fall through.

The end result of having conversations with aging parents, according to a Fidelity Investments survey, has a positive effect on them. Peace of mind jumped from 61 percent to 91 percent when comparing parents who had not had detailed conversations with those who have.

And, when the day is done, having everyone on the same page is what it’s all about.

We hope this information was useful to you and helps your clients and their families. If you have a specific case or a question, don’t hesitate to call our office. As always, feel free to call us for further advice or to share your ideas.