Talking to your parents about money is one of the most difficult things you can do.
But it’s one job you have to do well.
Consider this example. I have a client I have worked with for more than 15 years. Looking out for his best interest, I asked him periodically to make sure his parents had their financial affairs in order. I asked him to get assurance that they were up to date on their insurance premiums.
Each time, my client’s father told him that they were all squared away.
But when my client’s father had a stroke at age 77, my client and his two siblings found out otherwise. The parents did not have the long-term care policies that were believed to be in place. They needed these to protect them when they could no longer care for themselves. And the mother, at age 74, was simply not strong enough to care for the father at home.
These days, unfortunately, the family is watching a portfolio of roughly $2 million sift away in bills paid to assisted living facilities.
How do you keep this from happening in your family?
Sometimes it helps to use stories like the one I just told. Maybe you’ve heard of something similar happening in other families. These cautionary tales can be used as a way to open up conversation. But it’s important to approach these situations with respect and restraint. You don’t want to scare people if you can help it, and you don’t want to back them into a shell from which no real information comes.
But you can try to plant the seeds of good communication early and you can always offer your help. Ask if they will sit down with you to look at the critical numbers. If necessary, offer help with a spending plan or a budget that makes sense. Sometimes family dynamics won’t allow for this. If this is the case in your family, consider bringing in a neutral third party. Someone like a geriatric manager, a trusted doctor, or a CPA could help.