Focus on the Family

Talking Finances With Mom and Dad

Don't wait until faced with a crisis. Sorting through money matters now can make all the difference.

by Carol Heffernan

If there's one issue that parents and children often find difficult to discuss, it's finances.

It was sure that way for Bruce Madson.

"It's a taboo subject that we've avoided," he says, "even though [my parents] both have health problems and are struggling to stay on top of things."

Maybe your parents have always been hush-hush about their finances. Perhaps talking about money makes everyone in the family feel uncomfortable.

Undoubtedly, though, the day will come when age or unpleasant circumstances will force parents and adult children to hash out this touchy topic. Without question, the best time to address finances as a family is when your parents are relatively healthy and independent.

If a parent becomes ill or disabled, the limitations dramatically change the decision-making process. Fewer options are available and administrative hassles quickly add up.

Speaking with your parents is a necessary first step in avoiding future financial headaches. Consider these strategies when broaching this sensitive topic with your mom and dad:

  1. Involve appropriate family members in the discussion. Talking about a parent's potential incapacity and inability to manage independently is a conversation no family enjoys. Parents may not want to give up money matters, and children may hesitate to control it. But in the event of a crisis, it's crucial to have a plan devised to handle the onslaught of financial decisions.

    That said, parents also have the right to make their own choices, including the making fiscal decisions privately. In this case, it is recommended that your parents meet with a financial planner, lawyer or an advisor who specializes in helping the ill or elderly.

  2. Ask your parents what they feel comfortable handling. Allowing parents to have as much independence as possible is ideal. Encourage them to maintain control as opposed to taking it away—unless their decisions become harmful.

    Are they confident paying the bills, making deposits and dealing with health insurance? Are they aware of frauds targeting seniors? Do they have records of their savings and spending? If necessary, delegate who will follow up with them on these responsibilities.

  3. Make sure personal and financial documents are in order. Concern over a parent's financial well-being is front and center for many adult children.

    These are some of the financial matters to consider:

    • Investment, bank and insurance accounts
    • Social Security numbers
    • Debts and payments
    • Tax returns
    • Savings and investment records and lock boxes
    • Contact information for doctors, insurance agents, accountants, etc.
  4. Plan for an emergency. Before crisis mode hits you, sit down as a family and settle on some key answers that will give everyone involved some peace of mind.

    Who will speak for your parents if they are unable to speak for themselves? Do they have a durable power of attorney to handle financial affairs if they become ill? Has an attorney drawn up a will or living trust in recent years? What about end-of-life care?

    Handling these details now will help protect your parents and their assets in case of an emergency.

  5. Listen to your parents and treat them with respect. Keep in mind that you may not agree with every financial decision your parents make. Still, there is no need to parent your parents.

    Instead of telling them what to do, ask questions that clearly express your concern: "What can I do to help you?" "How do you think we should handle this?" "Do you feel overwhelmed by any aspect of your finances?"

    With good intentions and a willingness to listen carefully, your family can work through this challenging topic one issue at a time. And when the hard work is done, your family will act and react more effectively.