4 questions to ask aging parents about their finances

If you haven’t discussed your aging parents’ long-term financial goals with them, you aren’t alone. Many people shy away from family conversations about money because it may feel awkward or uncomfortable – or they may fear that their parents won’t react well if the subject is broached. Unfortunately, avoiding the topic can create confusion and headaches down the line if your parents become incapacitated or pass away unexpectedly – particularly if you’re in charge of aspects of their estates like serving as executor or power of attorney.  

Just as every family is different, there is no “one size fits all” approach when it comes to discussing money, but it can help to start with basic and practical questions that will give you a sense of your parents’ goals for the future without delving into more delicate territory. Use the following primer to start the conversation – and remember, these are usually not one-and-done discussions. Getting a full view of your parents’ financial situation may take time and patience – but it will serve you well in the long run to gather the information while you can.

1. “What do you want to accomplish over the next five-to-ten years?” Understand your parents’ aspirations for the next few years. What are their personal and financial goals? If your parents are not yet retired, ask them when they plan to leave the workforce and what they want to achieve before they do. If your parents are retired, ask about how they want to spend their time. Will they move to a new state? Travel more? Pick up a part-time job or find a volunteer opportunity? Gathering a sense for how your parents want to spend their time will help you get on the same page with what to expect in the years ahead.

2. “Where can I find financial information in case of an emergency?” Unexpected events or illness can occur at any time. If something unfortunate happens to your parents, it’s important for you to know how to access key personal, financial and estate planning materials. Contact information for their financial advisor, tax professional, estate planner and lawyer is a great place to start. Make sure your parents have the right permissions in place so that you can step in when the need arises. Many professionals require documented authorization before they can legally discuss information with a family member. 

Additionally, ask your parents to consider sharing passwords for key accounts or letting you know where you can find a list of them. Having access to your parents’ smartphones, computers, social media or other accounts can help in an emergency.

3. “What do you want your legacy to be?” As people enter and move through retirement, they often become more focused on the legacy they want to leave behind. Ask your parents how they hope to be remembered, and what their plans are for making that happen. The following elements can be pivotal to the conversation: 

• Will and trust: Ask your parents if they have an updated will or trust, and if there’s anything they’d like to share about how the assets will be distributed. Having a conversation about why your parents are allocating certain amounts to family members, charities or foundations while they are still alive can help prevent future conflict and confusion after they pass away, when you will inevitably be dealing with other emotions and factors related to their death.
• Health care: Health care choices and expenses are often major sources of stress for retirees. Discussing your parents’ current health priorities, possible assisted living facilities or treatment options can give your family a roadmap to follow for future decisions. Ask your parents if they have formalized their wishes in a health care directive, which is a legally binding document that can enable them to choose a loved one to make medical decisions if they are unable to do so on their own. 

4. “What support do you want from me?” Extending an offer to proactively help may eliminate frustrations or relieve stress for even the most independent and well-prepared parents. Keep in mind that assistance may be nonfinancial – such as completing house projects, planning more time with their grandchildren or helping identify how they can get involved in activities. Consider including a financial advisor or attorney in the discussion if your parents have financial or estate planning to-dos or questions.

Retirement and legacy planning can be complicated, but having regular discussions with your parents can help you both prepare for the future. If you’ve already covered the necessary ground, a scheduled check-in can be helpful in case your parents’ plans or your family situation changes. 

Jean D. Koehler, CLTC®, RICP®, CKA®, CRPC®, is a Financial Advisor with Ameriprise Financial Services, LLC. in Arcadia, CA. She specializes in fee-based financial planning and asset management strategies and has been in practice for 23 years. To contact her, please visit https://www.ameripriseadvisors.com/jean.d.koehler/ or call 626.254.0455. 55 East Huntington Drive Suite 340 Arcadia, CA 91006.

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