Over this past year, COVID has affected—and continues to affect—the most vulnerable populations. We’ve heard too many stories of financial elder abuse and accounts of loved ones picking up the financial pieces after a loss. We feel that it is our duty to educate our readers on how to protect and support their parents’ finances through active and transparent dialogue. So, we’ve written a series on it. Please join us.

Part 1 – How to Start the Conversation

As our parents get older, it’s important to start conversations early on with them about their finances. We know that’s easier said than done, but take it from us, we’ve seen unnecessary financial disasters erupt that could have been avoided if there were broad stroke conversations about how to offer assistance when the time comes.

While role reversal is a natural transition in life, it can be an identity shifter for our parents and often comes with a heavy blow. We know that with age comes cognitive decline, but many of us only look for regression in physical ability. Do they need help plowing the driveway? Will they need help going to the grocery store? But we should also keep an eye out for cognitive vulnerably, such as unpaid bills stacked up on the table or conversations regarding strange calls that they received (Have you seen “I Care A Lot?”). These could be signs that we need to step in and help.

We put together some ideas on how to (gently) start the initial conversation with your parents on how we can help them protect their finances as they age.

Conversation Starters

Depending on family dynamics, this could go any number of different ways. If you think the conversation is off the table, consider sending in a third-party person like an aunt, a doctor, or a family friend to relay the message. This route may bridge a softer, less direct entrance to the conversation.

Or, if you’re up for the challenge, you could use your own experiences to segue into the conversation, such as:

>> “I was recently talking with my financial advisor about our investments and wanted to check in with you on how you’re doing. Have you checked in with your advisor lately or made any account changes?”

>> “I keep getting spam calls from fraudulent callers, have you received any of these? You know that the IRS typically never calls, right? They usually send letters in the mail.”

>> “I just switched over to autopay for my car payment. Do you have most of your bills on autopay? Most of the time, it saves some money. Do you want me to help you set this up?”

What Should I Ask About?

Another way to introduce the topic is to ask them about essential estate planning documents and whether you are identified in them as having a specific responsibility, such as serving as a power of attorney for healthcare and/or finances. You’ll need to know what that role entails. They will also need to have a will and possibly a living trust.

Similarly, you should ask questions about whether they have up-to-date beneficiary information on bank accounts, retirement accounts, insurance policies, brokerage accounts, etc. You don’t necessarily have to ask to review them, but you will need to know where to find them when the time comes.

Next Steps

This is the first step. Have the conversation. You don’t have to sweep in and switch roles over night, but rather inquire about how everything is set up and keep an open dialogue going to let them know you’re there to support them and offer any help they may need in the future. If you have any questions, please contact me at (978) 864-9581. We’re here to help.

 

Stu Steinberg, CFP, CPA, MBA has been working with families and their businesses since 1988. He can be reached at 61 Water Street, #2, Newburyport, MA  01950 and at (978) 864-9581 and stu@eaglerockwealth.net.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. This information is not intended to be a substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax advisor.

Securities and Financial planning offered through LPL Financial, a registered investment advisor. Member FINRA www.finra.org / SIPC www.sipc.org.