Death is often a topic we avoid, but one we cannot escape either. The loss of a loved one will always be difficult, but you can help reduce the amount of stress by completing my 7 Steps to Put Your Financial Affairs in Order. This will help make an emotional and chaotic time a little bit easier for your loved ones.
Today I’m going to focus on having “the talk” with your parents. For most of us, the first time we deal with the financial aftermath of death is after the loss of a parent, and it’s not always pretty. This isn’t always the easiest conversation, but one you need to have with your parents.
As you age, you become more keenly aware of your own mortality. Add in that money is often a taboo topic in many homes, and it’s likely your parents will be a bit uncomfortable when you broach the subject with them. I expect you will hear some variation of “we’re fine” and “don’t worry about it”. This may come as a huge relief to you, and you may be tempted to table the discussion. However, I suggest you ask a few more questions to make sure they are simply not pacifying you. Be prepared when you do that you may get some variation of “it’s none of your business”.
Whatever you do, don’t give up. Table the discussion for a short period of time and gently revisit it in the future. You might start by sharing with them some of the things you did to put your affairs in order. For example, you recently created a will and want to share with them some your decisions. Now you can ease into asking them about when they last reviewed/updated their will. You may find they are now more open to talking to you.
This may seem obvious, but remember, it’s highly unlikely their parents ever talked to them about these things or vice versa, so this is a whole new world to them. Plus, they are your parents, meaning they are the ones who are supposed to take care of you. Even though they recognize roles may get reversed at some point, it’s still a hard reality for many parents to accept so be patient with them and remind them why it’s important they do this.
Reality Check: Depending on the age of your parents, there is a strong chance your father handles the money and your Mother does not have a complete picture of their overall financial health. I mean no disrespect, nor am I suggesting your parents don’t have a good marriage or that your father doesn’t respect your mother. It’s simply the way things worked when they got married. The problem is that statistically women live longer than men, on average five years longer. Thus, there is a high probability that your Mother will outlive your father and may be ill prepared to manage the finances. Magnify that with her grief, it is a recipe for disaster.
Modern couples struggle with this, so don’t be surprised if you receive some push back as it may not come naturally to them. Help your parents revisit how they handle money as a couple, which starts with open communication on the following:
Now that they are in tune and communicating openly about money with each other, they are ready to complete the remaining steps in my guide on how to put your finances in order.
In some situations, your parents will simply not feel comfortable talking to you about their finances or their estate is complicated enough to warrant professional guidance. Don’t be offended, but be grateful they are willing to get their affairs in order. Work with them to find a knowledgeable estate attorney who can guide them through the process.
Tip: Be aware that even if you parents welcome your help, they may not be comfortable dealing with electronic forms and may still prefer to work with someone in person.
Whew. You’ve done a great job getting your parents talking to another (and you) about money. This will make it easier for their loved ones and also ensure their wishes are known and followed, which leads us to another important and overlooked topic – their long-term care needs. I’m not talking about their living will, but what they want to happen when they are no longer able to care for themselves. I’ll talk more about long-term care and some important considerations for you and your parents next Monday.
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SHANNON RYAN, CFP®
Remember I didn't have a great example of taking care of finances growing up. My parents have most of their affairs in order but we know they are not where they would like to be financially and that is due to the mistakes they made in the past. It can take time to recover from financial mistakes if one isn't careful.
My sister and I help out with their finances and we're glad they are letting us help them. Now that my dad is close to retiring full time we want to make sure they can enjoy their golden years without any worries.
Thanks for sharing these tips. I'm going to share it with my family :). Happy Wednesday!
Yes, it definitely takes time to recover from past money mistakes and your parents are fortunate to have children who want to help out and make sure their retirement years are great ones. Definitely share these tips with them and help them put their affairs in order. It will definitely make things easier for everyone. You have a great day too!