Having the “Money Talk” with Aging Parents
Discussing finances with aging parents is never easy. As a result, many families simply delay these conversations or avoid them altogether. This can lead to unexpected financial surprises, misunderstandings, and even conflicts down the road.
By talking openly about money, you ensure both their future and yours are secure, prevent potential disputes, and help in planning for long-term care. Your goal in having this conversation is not just about understanding their financial situation but also about ensuring financial stability and facilitating smooth estate planning.
Parents who have accumulated wealth over the years may be resistant to the idea that they need help managing their money. It’s important to be mindful of your language and positioning. It’s not, “I need to know how much money you have.” Nor is it, “You shouldn’t do this by yourself.” There are more delicate ways to broach the subject, and we’ve outlined a few possible scenarios below:
1. Segue from a broader topic
This approach starts by finding common ground, such as discussing recent market conditions or rising healthcare costs. This can naturally lead to conversations about the health of their investments and any concerns they might have about their retirement savings. The initial goal is not to delve into the details but to make them comfortable with the broader discussion. As they become more at ease, you can gradually move on to more sensitive topics.
Example Script: “Have you been following what’s going on in the financial markets?” or “I read so much about the cost of healthcare. What’s been your experience lately?”
2. Inquire about their financial advisor
Emphasize that you work closely with your advisor and that you’re curious how they like theirs. This gives you a chance to gauge the depth of relationship, frequency of contact, and trust in recommendations.
Example Script: “I’ve been meaning to ask you, how do you like your financial advisor?” or “What has your advisor been telling you lately?”
3. Blame it on your financial advisor
If bringing up the topic feels too personal, you can use your financial advisor as a reason for the conversation. This can take away some of the discomfort. After all, most financial advisors agree that family financial discussions are a good thing.
Example Script: “My financial advisor suggested that it’s a good idea for families to discuss their financial plans. Would you be open to going over the basics together?”
4. Inquire about the handling of their estate
You may end up playing a very direct role in executing their estate. If that’s the case, you have a vested interest in things being well thought-out and coordinated. Even so, this needs to be framed in their interests, not yours.
Example Script: “I read so much about estate planning and what can go wrong. Do you feel good about your plans?” or “If you don’t mind me asking, how recently have you updated your estate plan?”
Approaching the money conversation with empathy, timing, and a collaborative mindset can make this easier for everyone involved. What do you cover during that meeting? Start small and work your way towards more detailed conversations.
This works best when discussed over more than just one conversation. The idea is to open up the dialogue for the future. For most, we find the first step of simply asking is the hardest part.
Material prepared by Oechsli a third party non-affiliated with Raymond James.
Any opinions are those of Steven Bayardelle or The Wang Group and not necessarily those of RJA or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. You should discuss any tax or legal matters with the appropriate professional.
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