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Most adults with aging parents rarely look forward to raising the subject of their elders' money. It's a scary topic because it involves a role reversal. Parents are supposed to teach their young children about money, not the other way around. Years later, adult children and their parents sometimes find it challenging to break out of this family dynamic. Yet, there comes a time when children need to talk to aging parents about plans for their money and other end-of-life planning topics.
PLAN OR WAIT FOR A CRISIS
Ideally, the time to talk to parents should happen before any crisis. Injury or illness can happen fast. If plans are not in place, decisions may be made quickly without sufficient information. This risk of causing irreversible mistakes is high. Even if plans have been made, failure to share them with adult children may put an effective plan at risk. Talking when parents can physically and mentally hold their own in the conversation provides a better foundation for good planning. In other words, the sooner, the better.
SENIOR MONEY TABOO
The money issues for older adults have a different context as compared to younger, working-age people.
Younger people can justifiably say personal finances are no one's business but their own. However, due to the greater likelihood of disability or death, older adults' finances will eventually be the business of others. Those others most likely will be family.
Most of us would hate to think of our families, especially our adult children, struggling to clear up our final finances. Yet, many older adults are reluctant to take action. A few of the major reasons are:
- Fear of Death – Thinking about one's demise is frightening, so it's understandable why people avoid discussing or making plans about it.
- It's None of Your Business – By the time we arrive at our senior years, we've had decades of practice keeping our personal finances under wraps. It's a hard habit to break despite the multitude of good reasons to share such information with adult children.
- You Just Care About the Money - Adult children asking about money feels to some parents that the money is more important than the relationship.
THE NECESSARY CONVERSATION
No matter what the reason for avoidance, the issue needs to be raised. How and when to raise it, however, differs from family to family. The financial status of each party makes a difference in choosing a communication strategy. Is financial status good or bad? This is a matter of interpretation but assume "good" means relatively stable finances, and "bad" means the opposite.
Parents Good/Adult Child Good
In this case, the topic of money may be more comfortable to bring up. If both parties are financially stable, the idea that an adult child is overly interested in the parent's money becomes less concerning.
There still may be some reluctance by the parents. However, if they have been careful about their finances, they may be persuaded that sharing information with their adult children is fiscally prudent.
Parents Good/Adult Child Bad
This could be the most challenging conversation to start. Persuading aging parents to discuss their money with an adult child who they perceive is not in a good financial shape may not be easy. This can be especially sensitive if the adult child has depended on parents for financial support.
In this scenario, it might be helpful to enlist the assistance of a trusted third party. If the two primary parties respect this individual's objectivity, it might dispel any suspicions that the adult child is merely interested in getting the parent's money.
Parents Bad/Adult Child Good
Parents with a poor financial status may be reluctant to discuss money due to embarrassment. Although they may be proud of their child's financial stability, they could at the same time feel ashamed about their own situation.
Communicating about money in this context requires immense sensitivity. One potential ice-breaker could be a life event that provides a logical excuse for bringing up the subject.
It could be a positive event like a birthday, wedding or the birth of a child. Less happy events like divorce, illness, or death can also provide an opportunity to raise the topic. A note of caution: be careful about timing. Pick a time when emotions, good or bad, have leveled out. The event can still be referenced, but aging parents may be more open to talking once the intensity of the event has passed.
Parents Bad/Adult Child Bad
This conversation could go either way. Embarrassment for both parties may put a damper on the communication channel. On the other hand, there may be a "misery loves company" vibe that helps discussion along.
Adult children need to find the courage to get past the "who am I to talk" mindset. As mentioned above, the financial landscape is different for older adults. The discussion focuses on money matters in the latter part of life and after death. One option would be to seek free or low-cost financial advice options from which both parties could learn. An example of this would be seeking out information on the responsibilities of an estate executor. Learning such information together would not only prepare the adult child for the future, but it would also provide insight to the parent about things that need to be done to get the estate in order.
AFTER THE START