It’s never easy to have financial conversations with your loved ones, especially our seniors. I think so much of it has to do with the fact that they were raised in a different time, and I know from experience how money was always a hush-hush subject that they avoided like the plague. No, seriously. My parents and grandparents could make avoiding talking about money a full-time job.
As our loved ones get older, the key is talking about finances before it’s too late. I think a lot of us wait until the last minute because it’s such an uncomfortable topic to talk about. We need to overcome the awkward money stigma, push through it, and establish a clear plan, outlining our loved one’s wishes as they approach their end-of-life season.
Tough conversations like these need to happen in the comfort of your senior’s home. Make sure you’re not starting behind the eight ball, be more than accommodating to their schedule, needs, and setting. I can’t stress enough how important it is to have separate conversations with each of your parents to make sure that both of their wishes are honored accordingly. This ensures that if there are any discrepancies, the two of them can reach a compromise that benefits all parties.
Your superpower to help you through the conversation? Being disarming. One of the finest points in the art of persuasion is initially making it seem like their idea to better ease into the conversation. I mean, who doesn’t love being right? And leave it to our seniors, too. But hey, we love them for their strong wills!
Speaking of wills, that’s one of the first things to talk about when having that sit-down discussion about finances with your loved one. Important questions to ask may include if their will is up to date and who has power of attorney. A part of this discussion might include establishing where their money is located and who has access to the funds. There needs to be somebody other than themselves with a signature on file for money to change hands or withdraw money. This other person can be the one with the power of attorney, family attorney, or trusted family member.
You would be surprised at where seniors keep their money. I’ve seen it all: coffee cans, mattresses, socks, boots, old pots in the back of the cabinet—the list goes on. All I’m saying is don’t underestimate their creativity and hiding places. After all, I had the most difficult time finding Christmas presents when I was younger, so I wouldn’t put it past them if they would be incredibly gifted at hiding their own hard-earned cash.
In our internet-driven world, most banks have online account access. Usernames and passwords to these online accounts need to be written down or recorded for safekeeping. It might be a good idea to log in every few months just to be sure the account can still be accessed and they haven’t accidentally changed their username or password. This might be a good opportunity to open the discussion about having access to other online accounts including social media. It’s important to convey that at the end of the day, it’s not an invasion of their privacy, but rather an extra step to protect them online. Not too long ago, my parents were scammed out of a decent sum of cash and were left vulnerable to other online scams. We used this opportunity as a way to establish boundaries online and what information is safe to disclose online and what isn’t. It’s a well-known fact that most internet scammers today target our older ones, so it’s important that we do our part to help keep them safe and prevent such mishaps
Making sure they’re crossing their T’s and dotting their I’s, it’s worth looking into their life insurance policy. It would be wise to check and see if the beneficiaries are current and still in accordance with their preference. Depending on the policy, long-term care insurance might be included and it’s crucial to know the details of that particular plan.
Social security is another great topic to cover. There needs to be full disclosure of income, be it stock market earnings or social security income. Finding out the details on their social security benefits will prove helpful especially knowing how long they paid into it.
Another topic that might slip under the radar would be personal assets. In the event that they need long-term care or a life-altering accident occurs, it’s important to know which of their assets can be liquidated and in which specific order they prefer. This might be something that could be stated in the will as an extra measure, too.
“Life gets very tricky when design with contract law versus probate,” said Tinja Anderson, a financial strategist at MassMutual Greater Houston. “For every family, having a financial planner who can project out how your assets will look, especially when incorporating inflation, interest rates, long-term care, social security, RMD’s, etc., is crucial. And even better if they have a legal team available to them to review and coordinate the financial estate flow. The reality is that money is emotional. The challenge is, that it is even more emotional if there is a risk of running out. The tough conversations need to be had, and then they need to be had routinely.”
At the end of the day, we all want respect for our aging loved ones. The tough financial conversation may not happen all at once, and you may have to chip away at it until you have a complete understanding of their financial situation and end-of-life financial wishes. Only you know your senior best, so prioritize the topics in the conversation accordingly. Be patient and understanding throughout the entire process and help them understand that these tough conversations need to happen because of how much we love them.
Quote from Tinja Andrerson | Financial Strategist, MassMutual Greater Houston. Contact her at email@example.com for more information on financial planning.