According to a 2019 study by GOBankingRates, 73% of Americans have not had a conversation about finances with their aging parents. Meanwhile, 23% have tried to approach the subject, but their parents refused to engage in the conversation. Furthermore, 19% are afraid to bring up the subject at all, and 17% believe talking about money is a taboo in their family.
However, this talk is not something you should shy away from.
Today, we’ll highlight the importance of having financial conversations with your aging parents. Plus, we’ll share stories of cases we’ve seen over the years to illustrate the benefits that can come with having these conversations — and what can happen to those who don’t have the money talk.
Read on to find out more!
The Importance of Financial Conversations
Money is not the most pleasant topic to discuss, and many people are hesitant to broach the subject for a variety of reasons. For example, many people don't know where to start the conversation, and some are concerned or afraid that discussing the subject will damage the relationship they have with their parents.
But we need to realize that, whether we like it or not, money is an issue that needs to be addressed.
So, why and when should we have these conversations?
Well, what happens when your parents get sick? What are their wishes? Do they have a game plan? How do they plan on paying their bills? Do they have any long-term care insurance?
If you don't know the answers to any of these questions, then it's time to find out the information you need before anything terrible happens.
Another reason to have these conversations is that we're seeing an increasing number of highly sophisticated frauds, both over the phone and online. A growing number of seniors are being conned out of significant sums of money, and having money conversations could help prevent this.
For instance, we know someone whose parents were scammed by people who contacted them in the voice of their grandchild, claiming that they were in danger and needed urgent money but didn't want their parents to find out. So what did the grandparents instinctively do? They sent the money without hesitation, only to discover later that they had been scammed.
That’s why having money talks with your parents, and creating plans and paperwork around their financial picture, is extremely important.
Key documents are essential and are bound to come up when having financial conversations with your parents. It cannot be avoided.
What exactly counts as a key document?
Wills, powers of attorney, and health-care proxies are all important documents to have. It's critical to know where they are, when they were last updated, and if you can preserve a duplicate of them.
After documents have been discussed, you may want to go a little bit further with understanding your parents wishes and having them all successfully set up.
Proper planning and having the right documents set up and completed can save you and your family from a ton of distress and uncertainty.
Initiating Money Conversations With Your Parents
You've probably heard the phrase, "one size does not fit all." This is especially true when it comes to having the money talk with your aging parents.
You don't want to push them into talking about finances if they aren't ready, but you could give them a gentle push by asking a question that will help them understand why you want to have this talk.
Other strategies include having a conversation about your own personal finances to introduce the issue, brainstorming a real-life scenario, or sending your parents articles and information on elder fraud.
We recognize and understand that there are different approaches for different situations. If for any reason, you still have trouble or do not feel comfortable discussing finances with your parents, advisors at Heller Wealth Management are here to help!
How We Help
At Heller Wealth Management, our priority is to make you feel comfortable and keep you at ease when having these types of conversations.
We have what we call the Heller Wealth Management Client Portal. In this portal, we keep your copies password protected and have a document list with all your valuable information and notes you would like to pass down or keepsakes in terms of any emergency or uncertainty.
Suppose if something does happen, we can always open up the vault and have a conversation about what will take place and needs to be done.