Six Ways to Start the Money Talk with Your Parents
One of the most difficult conversations that grown children can have with their parents is a discussion about mom and dad’s finances.
Having the talk is critical for many reasons including these three;
Grown children should know about parental estate plans.
Children need to know if they will have to support their parents in the future.
It’s better to have a plan laid out among parents and children than act in crisis mode later.
Children can discover pointers on how to have conversations with aging parents in a new book entitled, Mom and Dad, We Need to Talk: How to Have Essential Conversations with Your Parents About Their Finances.
Here are some of the suggestions that author Cameron Huddleston, a veteran financial journalist and a former contributing editor at Kiplinger, outlines in her book:
Tip No. 1:
A life event such as a marriage, divorce or a birth could be used as a way to get a conversation started. In addition, you could also use an event in the news such as tax legislation, big swings in the stock market, and healthcare reform to begin a conversation.
Tip No. 2:
Another way to initially engage is to write parents a letter inviting them to talk. This way you don’t catch them off guard and it will give them time to process the request and work through their emotions.
In the letter, you can share that you want to have a conversation out of your love and desire to be able to help them as they age.
Tip No. 3:
Some parents might be resentful of having a money talk initiated by their children because they feel it’s a reversal of roles. If you find yourself in this position, you could start by seeking advice from your parents about your own financial situation. For instance, you could ask about whether you need life insurance or what is the best way to save for retirement.
Tip No. 4:
Consider starting with a story about an estate plan – or rather a lack of an estate plan – gone awry. Maybe you know someone who died without a will and the repercussions of that. Or perhaps you heard about a battle after a parent died and the stepchildren from a second marriage were fighting for a cut of the estate.
Tip No. 5:
Get your own estate plan, which is something you should be doing anyway. Once that’s done, you can mention to your parents that you recently got your will and other estate documents done and where they can find them if anything happens to you.
Tip. No. 6:
If your parents have treated money as a taboo subject, consider starting the conversation on a broader topic. Here is a suggested opener:
“Have you thought about what retirement will be like for you?”
This might give you clues to their financial situation. For instance, if they say, “I’d like to be able to travel, but it isn’t possible”.
Understanding the nuances of estate planning can be overwhelming. We encourage you to contact your wealth advisor to help walk you through you or your family’s specific situation.