How to Have a Conversation with Aging Parents
May 11, 2022 | Sage Capone
Our parents were the first people to guide us in saving money and helped us open our first bank account. But as they age, the tables turn and now it becomes our turn to guide them with their finances. Most times, elderly is targeted by financial scams. They become less inclined on making huge financial decisions and can get confused with their bills and accounts. Now it is our time to help them face these challenges? Here are some ways to support them in this process.
The best way to begin would be to start slowly. Find an opportunity if you’re talking about stocks or expenses to ease into a conversation. Obviously, this would be a starting point. If your parents have acquired a lot of wealth, they may shy away from the conversation. Keep trying to slowly gain their trust and candidness. It will take time but hopefully you can get an idea of their investments in a concerned manner. Soon enough this will lead you to more delicate conversations and openness.
Once your parents realize you are concerned for them, you can begin to help them in navigating different aspects. The number one advice would be to alarm them of elderly scams. It is reported that close to 800,000 older adults are scammed out of billions each year! Acquaint your parents to different tactics these scam artists are doing. For instance, when it comes to giving personal information over the internet as far as opening links or providing their social security information over the phone.
The unfortunate reality is that at some point your parents will be unable to make decisions whether it is from a health crises or mental decline. This is where it is important to discuss the area of cost of care. Insurance can help leverage the cost and keep expenses down. Guide your parents in creating a disaster plan for the future as to be better prepared. At the same time, you can facilitate the idea of them creating an Estate Plan if they don’t already have one. The first step would be for them to have an POA (power of attorney). This will allow them to have someone in control of their assets, bank accounts, withdrawing funds or writing checks.
The most important discussion you can have with your family is what will happen when mom or dad passes. It’s not easy to bring up but it’s reality. Bring the entire family together to have these conversations. As an estate planner, this is the number one problem we see with families. Even if one family member has moved out, involve them with the talk. Discuss who will be able to take care of mom and dad and what inheritance each child will be getting. If you will be leaving a large inheritance, involve your kids with the estate attorney or financial planner so they are able to consider a variety of investment options or trust options to mitigate long-term tax consequences. Again, starting these conversations will not be easy but it will be the best decision you’ll ever make for your family and their heirs.