Talking about your parents’ money
Last year The Toronto Star reported that many elderly Torontonians were bilked out of considerable investment money by someone they thought they could trust.
In the past, Comfort Life has covered tales of elderly parents and financial woes, such as the story of a woman from Arizona who found that her dad had racked up $30,000 of debt in a few short months. He had lived well beyond his means, leaving her to straighten out the financial mess.
Overcome the generation gap
There are many different ways that parents’ finances can go horribly wrong. And it’s likely not helpful to assume that everyone is on the same page. A US survey last October concluded that 63 percent of elderly parents thought their kids knew about their finances but only 42 percent of adult children agreed.
Do you think you might need to know your parents’ finances? What can you do to avoid problems like those listed above? How do you find out what you really need to know about your parents’ money? How do you approach the subject without causing undue conflict?
Here are five things to consider if you need to approach the subject of finances with your parents:
Pick the right family representative. In every family there is one child best suited to broach this subject. Perhaps it’s the one closest to the parent or perhaps there is another child better suited to discuss financial matters. Choose this representative wisely and have only one child approach the subject once. If it doesn’t go well, you’ll have to try a different tack. But even if it goes badly, the conversation may plant a seed that will blossom into openness in the future.
Appeal to your parents’ sense of responsibility. Elderly parents who have lived through the Depression, the hardship of World War II or immigration (or all of the above!) will have a strong sense of fiscal responsibility. Appealing to their responsibilities toward you and their grandchildren “after they’re gone” might be a good way to get them to share with you what plans they have, and for you to gage how sound those plans are.
Try talking about yourself first. For many older adults the subject of money is highly personal and they usually won’t divulge details willingly. Money is also an area of their lives over which they feel a sense of control at a time when they are being forced to give up control of other things. Remember, you used to come to them for advice so try revealing something of your own financial situation first. That may start an unthreatening conversation and inspire them to open up without feeling that you are prying or being disrespectful.
Find a financial advisor your parents will trust. Many older adults are unfamiliar with financial advisors and may be intimidated by the idea of sharing their personal information with a stranger. Hire an advisor to talk to your parents without them knowing about it. Ask for a personal referral and be sure to meet the advisor before introducing them to your parents to ensure a good fit.
Choose a time wisely. Pick a quiet time, maybe after you’ve shared a cup of tea or glass of wine and say something like, “There’s something I want to ask you, dad, and I know it’s a very sensitive area…” Be deeply sensitive, though. Don’t even raise the subject if you are not sensitive to every nuanced turn that the conversation might take.
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