Bringing up the topic of money with your adult children can feel just as awkward as telling them about your sex life. But breaking the silence about your financial and medical plans is necessary, particularly for aging parents, if you want your family to be spared from chaos and confusion after you pass away.
Ed Slott, retirement expert and founder of IRAhelp.com, says leaving your loved ones in the dark can only make it more difficult for your family during an already deeply emotional and stressful time. “When the pressure hits and you’re under stress, that’s when mistakes are made, both medical and financial,” says Slott.
To help navigate this touchy topic, we invited him to discuss how to bring this conversation to the table and some of the basics of what you need to cover together.
The parents should always initiate the conversation
If you’re married, the first thing you need to prepare is a unified message to present to your adult children. No one wants to think about it, but in the event that one of you dies first, what arrangements have you planned for the surviving spouse? Once you’ve worked out the details, you should talk to your children together, says Slott.
Getting your reluctant parents to talk
For those of you whose parents are resisting this conversation, Slott says it’s best to bring the topic up in a way that reminds your parents why having the chat is to their advantage. Saying things like: “I’m here to make what you want to happen, actually happen,” or “It would be better if you gave us some clue of what to do so there’s more family harmony during an already difficult time.”
The basics of what you need to cover
Families need to discuss financial and medical issues that might come up during parents’ later years and after they die. For parents with multiple adult children, Slott says it’s wise to assign roles to them based on their strengths. In his own family, he’s ready to handle the money issues while his sister will handle the medical-related questions.
Below are some questions to ask your aging parents:
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If you become incapacitated what are the long-term care possibilities?
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Is there life insurance or long-term care insurance available to tap into?
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Medical power of attorney: Are there living wills or health-care proxies that detail the desires for medical treatment in case the parent is unable to speak for himself/herself?
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Financial power of attorney: Who will handle your money decisions if you can’t make them yourself?
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Are your legal documents current? Do you have a will or trust? Who is the attorney you worked with?
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What about your retirement accounts and beneficiary forms for IRAs and 401(k) retirement plans? Are they filled out properly and current?
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What are your assets? Are there any mortgages or reverse mortgages that must be paid off?