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Estate Planning,Financial Planning,Relationships

Having the Financial “Talk” With Your Parents

In the house I grew up in, we had the “Florida Room”, our screened porch converted into second den where my dad would often retreat to after work.  I have bad memories of that room because it’s where us kids would always be summoned to whenever we needed to have a mini-lecture from my dad.  The talks always seemed a bit forced, awkward, and would leave us trying to avert our eyes as much as possible until we were dismissed.

I thought I was done with these awkward conversations with my parents when I left the house for college.  Little did I know that things would come full circle with the roles reversed.  As my parents have been aging and dealing with health issues, my siblings and I were caught in the too-familiar position of having a general idea of my parents financial well-being but not much of a clue as to actual specifics.  With my father needing increasing amounts of health care services, what sort of position would they be in?  How “okay” are they, really?  And what conversations needed to happen with my parents and siblings to prepare for the inevitable?

Even though I have financial conversations with folks every single day, my parents’ generation tend to keep financial things very close to the vest and I knew this was going to be uncomfortable for them (okay, for all of us!).  But there were a lot of financial and relational issues we needed to address for everyone’s peace of mind.

Thankfully, it wasn’t nearly as awkward as I feared, and it turned out to be a huge relief to my mom to have someone to talk things out with and make sure there weren’t big things she was missing.  She also had a lot of concerns that she didn’t know what to do with.

Perhaps you could use some help thinking through the things that need to be discussed.  This list certainly isn’t exhaustive, and in some areas is just scratching the surface, but it can at least give you a starting point for these conversations:

  • What are the pieces of your financial picture?
    • Put together a net worth statement
      • Bank accounts
      • Investment accounts
      • Debts
      • Real Estate
      • Valuables
      • Life Insurance Policies
      • Other (business interests, notes receivable, etc.)
    • Are there any specific items on this list that you want to go to anyone in particular?
      • Asking this question up front will 1) help you make sure their will does what they want, and 2) eliminate some possible bickering amongst heirs
    • Who needs to be contacted in the event of an emergency?
      • This includes doctors, insurance coverages, financial accounts, attorney, etc.
      • Put together a contact list with phone numbers and any critical information that they and you know where to find
  • What is your estate plan?
    • Look at their wills together – does it accomplish their desires?  Do you need to add a memorandum for specific bequests?
      • Originals should be kept either with the attorney or in a safety deposit box, with copies with kids or whomever is appropriate
    • Who do you want making healthcare decisions for you?  What healthcare decisions do you want to pre-decide?
      • These are legally written out in Healthcare Power of Attorney and Living Wills.  If they (or you!) don’t have one, don’t delay in getting that done.
    • If the estate doesn’t get split evenly, have a conversation over why.  It’ll save everyone a lot of fighting if you can have the conversation while alive.
    • Do you have Power of Attorney documents in place?
    • Are beneficiaries updated on retirement accounts and life insurance policies?  These won’t be distributed according to their will unless the beneficiary is their estate.
  • What are the major risks
    • For many, this will be the potential cost of Long Term Care, whether it’s in assisted living or a nursing home.
    • Are your parents managing investments themselves?  Do they still have the mental faculties to do so?  What is the hand-off plan for these at some point?
    • How much of a monthly surplus or deficit is there?  Is there enough in investments to fill in the gaps for the rest of their life expectancy?  If not, what would a potential contingency plan be?
  • What sort of care would you like later in life?
    • This might surprise you, or might not!
  • What concerns do they have?

These conversations can be some of the most valuable opportunities to relay truly important things to them.  Things like assuring them they won’t be a burden, that you’re not going to leave them in a place against their will, etc.  It’s also a wonderful opportunity to ask the much more important questions.  What legacy to you want to leave? What do you want your grandkids to know?  Are they certain of salvation through faith in Christ?

For my own mom, I can’t solve all of her fears, but we have been able to put together a plan, give her (and me and my siblings) a lot more peace over the situation, and give us a much more clear path forward so that relationships can be the focus instead of finances.

You might start down this path and realize you have some questions that need some technical help.  Or perhaps you just need some encouragement to start the conversation.  Regardless, we’re glad to help in any way.  I can assure you that you won’t ever regret bringing it up, so long as it’s done in love and respect.  Blessings on the journey!