Money can often be an uncomfortable topic, especially when you have to talk with your parents about their money. It may eventually become your job to ensure your parent’s financials are in order and you have a plan that meets their wishes. Even if your parents are capable of managing their money now, it would be helpful to discuss what happens if they become unable to do so.
We’ve put together a list of tips that might make this an easier process:
- Deciding on the right time. It can be easy to delay this conversation. You may not want to admit your parents are getting older, or maybe you’re dreading the way they’ll react. It’s important to remember the sooner you have the conversation, the easier it will be for everyone involved. Putting a plan in place removes some of the burden and worry on both you and your parent’s minds. You also want your parents to be in the right mindset to formulate a plan that works for all of you.
- Bringing it up. You may be worried about how bring up his topic with your parents. Give them plenty of time to think about the subject and don’t try to rush them into the conversation. They may need time to prepare and talk with each other to get on the same page on how they want you involved. If your parents are still resistant, consider bringing in an impartial third party like a therapist or a doctor who can explain to them the importance of this conversation.
- Your role in the conversation. It’s important to remember that your parents’ are still in control of their assets, which means your role in the conversation is to make sure their needs are met. You will need their help to understand the financial assets and liabilities they have. Having this conversation while your parents’ are healthy can make sure you get all the correct information and help you know how they want you to manage their assets.
- If you become your parents’ agent or trustee - there are a couple things to remember. Since your parent’s still own their assets; you must always act in their best interest, manage their assets properly, keep your assets separate from theirs, and maintain records documenting the actions you are taking on their behalf. If you are worried about any of these, it may be best to seek guidance from an estate planning attorney who can make sure you are completing everything in a legally sufficient way.
- Long term care costs. When creating your parents’ financial plan, consider the cost of long term care. Depending on your parent’s health needs, this may be something that you need to keep in mind with their financials. Will the cost of healthcare fall to you and your siblings, or will it be budgeted into your parent’s financial plan? It’s something to talk about with your parents before it becomes an issue.
- If you have siblings. It is important to talk about who is responsible for what. Having to care and manage aging parents can put a lot of strain on sibling relationships, so it’s important to have the conversation with your siblings and your parents now.
By taking the the time now to figure out everything, will save you enormous stress and misunderstandings in the future.