For most families, “don’t ask, don’t tell” seems to be the accepted approach to financial matters. But as parents get older, such reticence can be costly. When financial reserves grow thin, all it takes is a sudden change in circumstance to upset an otherwise comfortable lifestyle, plunging seniors into debt and adding to the financial burden of adult children with their own families to support.
With a little tact and understanding, however, such conversations are not only possible, but they can bring a family closer together. Here are some simple things you can do to make your conversation more productive:
• Choose your agenda carefully. It might make everyone uncomfortable to discuss assets during an initial conversation. Instead, begin by reviewing the locations of the personal and legal documents that may be needed in case of an emergency.
• Be prepared. Think of the conversation through ahead of time, research the facts needed for you and your family to make informed decisions, and bring your knowledge to the conversation.
• Pick a quiet time to talk. Thanksgiving and other traditional family gatherings may be convenient, but they hardly allow undivided attention on such potentially emotional and complex issues.
• Share information. Your goal is to build a picture of your family’s overall finances, so that you can work together as a team.
• Be sure to follow up. Everyone should leave the discussion with a to-do list—and a commitment to meet again at a specific time in the future. Most of all, listen carefully and suspend your judgment. After all, the success of these discussions depends less on individual financial decisions made in the past than on what you decide as a family about your future.
Representing Your Parents
When your parents are ill and can’t attend to their affairs, you may have to step in and represent them. Here’s what you can to ahead of time to be prepared:
• Fill out all HIPAA forms required by insurance companies and health care providers.
• Become a joint owner of bank accounts and safe deposit boxes.
• Have your parents make out a durable power of attorney giving you the right to make financial decisions if they become ill or incapacitated.
• Ask your parents to complete state-specific advance directives, such as a living will or ahealth care durable power of attorney.
