Discussing finances with aging parents is never easy. Many families delay or avoid these conversations altogether, often leading to unexpected surprises, misunderstandings, and even conflicts later. However, open dialogue about money can ensure financial security for your parents, prevent family disputes, and facilitate smooth estate planning.
The goal of these discussions isn’t just about understanding their financial situation—it’s about ensuring stability and preparedness for the future. That said, navigating these conversations requires sensitivity, patience, and tact, especially when dealing with parents who may be resistant to discussing their financial matters.
Why Discussing Finances with Aging Parents Matters
- Financial Security: Ensures they have enough resources to cover expenses, including healthcare and long-term care.
- Estate Planning: Helps avoid legal or financial complications when the time comes to execute their estate.
- Family Harmony: Prevents potential disputes among siblings or other heirs.
- Avoiding Surprises: Prepares you for any unexpected liabilities or financial challenges they might face.
How to Start the Conversation
Initiating this discussion can feel awkward. It’s not easy to say, “I need to know how much money you have,” or, “You shouldn’t manage your finances alone.” Instead, consider these subtle, thoughtful approaches:
1. Segue from a Broader Topic
Ease into the conversation by starting with a neutral topic, such as rising healthcare costs or recent market trends. This can naturally lead to discussions about their investments or retirement savings without feeling intrusive.
Example Script:
- “Have you been following what’s going on in the financial markets?”
- “I’ve been reading a lot about the rising cost of healthcare. What’s been your experience lately?”
2. Inquire About Their Financial Advisor
If your parents work with a financial advisor, asking about their experience can provide insight into their financial planning approach. This strategy allows you to understand their current support system and identify any gaps without pressing for personal details.
Example Script:
- “I’ve been meaning to ask—how do you like your financial advisor?”
- “What advice has your advisor been giving you about the current market conditions?”
3. Blame It on Your Financial Advisor
Using your financial advisor as a neutral third party can make the conversation feel less personal and more professional. Many advisors encourage family financial discussions, so this approach is not only valid but also effective.
Example Script:
- “My financial advisor suggested it’s a good idea for families to discuss their financial plans. Would you be open to going over the basics together?”
4. Inquire About Their Estate Plans
If you’re likely to play a role in executing their estate, discussing estate planning is essential. Frame these inquiries as an effort to ensure everything is organized and in their best interest.
Example Script:
- “I’ve been reading about estate planning and how important it is to avoid potential complications. Do you feel good about your plans?”
- “If you don’t mind me asking, how recently have you updated your estate plan?”
Tips for Navigating the Conversation
- Choose the Right Time: Avoid discussing finances during stressful or emotionally charged situations. Select a relaxed moment, like over a casual meal or during a quiet weekend visit.
- Emphasize Collaboration: Frame the discussion as a partnership rather than an interrogation. Your role is to support, not take control.
- Be Empathetic: Acknowledge that discussing money can feel uncomfortable and assure them of your respect for their independence.
- Start Small: Begin with general topics and gradually work your way to more sensitive issues. Financial conversations are often best spread out over multiple discussions.
Key Topics to Address
Once you’ve opened the door, consider covering these areas over time:
- Income and Expenses: Understand their sources of income and major expenses to ensure they can sustain their lifestyle.
- Healthcare Plans: Discuss insurance coverage, medical expenses, and any long-term care plans.
- Estate Planning: Confirm they have an updated will, trusts (if applicable), and designated power of attorney.
- Debt: Determine if they have outstanding loans or credit card debt.
- Investment Management: Review how their investments align with their goals and risk tolerance.
Why It’s Important to Take Action Now
Delaying these conversations can lead to unnecessary complications later. Taking proactive steps ensures your parents’ financial well-being and gives you peace of mind knowing their affairs are in order.
Ready to Support Your Parents’ Financial Journey?
Navigating family financial discussions can be challenging, but you don’t have to do it alone. Our team of wealth advisors specializes in guiding families through complex financial planning.
Schedule a discovery call with one of our lead advisors today. Together, we’ll help you create a comprehensive strategy that addresses your parents’ financial security, estate planning, and long-term goals.
Material prepared by Oechsli, a third party non-affiliated with Raymond James.
Any opinions are those of Voyager Wealth Advisors and not necessarily those of RJA or Raymond James. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. You should discuss any tax or legal matters with the appropriate professional.
