Last time you sat down with your folks for a conversation this awkward, you’d barely hit puberty and it was all about the birds and bees. And while the time for that kind of “talk” is long gone, you need to start thinking about how to handle yet another potentially tough discussion with your parents: money. Talking to your parents about their retirement and estate plans is hard to do — but it’s really important, particularly as your parents age and potentially become more dependent on you.
It’s not just about their will and how much they’re going to leave you (or not!). Do you know what kind of care they want in the event they’re no longer able to communicate their needs and wishes? Do your parents have any life or disability insurance? Do they have enough money to live on through their retirement?
Having the money talk with your parents is important for everyone involved. It’s not an easy topic to bring up though; handled right, it’ll put everyone’s minds at ease, but handled badly, you could end up feeling as embarrassed and confused as an awkward pre-teen.
To help you bring the money question up in the best way possible, here are a five tips for broaching the subject:
1. Start slowly
Try to ease into the conversation by sharing an anecdote about someone you know, or your own experiences with estate planning (i.e., I was talking to my lawyer about power of attorney in case something happens to me — is that something you’ve thought about?)
2. Know what questions to ask
Start a conversation about living wills and powers of attorney to make sure their will and estate plan is clear and addresses what you need to know so that their wishes will be respected. Then ease into the topic of their retirement income and whether they have enough live on.
3. Don’t wait until there’s a crisis
A major life crisis is the wrong time to try and figure out what’s happening with your parents’ finances and estate planning. Plan ahead and have this conversation early so you can be prepared — and so your parents can take comfort knowing that you know what they want.
4. Be a good listener
Your parents might have very specific wishes or even anxieties over what will happen to their estate. It’s up to them to decide how they want things handled. So listen carefully and work to understand exactly what they want and why. If you don’t agree with their plans, you can tactfully make suggestions — but be prepared to be open and respectful of their wishes.
5. It doesn’t have to be a “talk”
If your parents feel uncomfortable talking about money, ask them to write it down instead. Sometimes it’s easier for people to put it on paper than to have a face-to-face conversation.
6. Find out where everything is
If something happens to a parent, you don’t want to be scrambling around looking for documents. Find out where they keep personal records such as their wills, birth certificates, bank account info so that you can find them easily and quickly if and when you need to.