There is no perfect time to talk with your parents about their finances. No matter when you bring it up or how you broach the subject, it’s bound to be awkward for you—the adult child—and your parents. Be that as it may, having “The Money Talk” is a critical part of ensuring that everyone is prepared for whatever may come.
Right now, such conversations may seem almost inappropriate. The entire global population is dealing with the frightening and life-changing experience of living with a pandemic. Our minds are focused on day-to-day needs and the swiftly changing news, not long-term financial planning. On the other hand, the reality of the situation is drawing attention to places where we might want to ensure a little more certainty, including addressing big questions about estate planning and other money matters.
Why this is such an important conversation
It’s a sad truth that there are more bad actors out there than we’d like to think. And plenty of these people are more than willing to take advantage of individuals who are beginning to experience cognitive decline and are therefore more susceptible to scams and other forms of manipulation and influence. Even more unfortunate is the fact that such crimes tend to increase during times of cultural and societal stress, such as a pandemic. In addition to external influences, a decline in mental capacity can lead to unwise purchase or investment decisions.
Collaborating with your parents (and a Connecticut estate planning attorney) to create legal documents (such as trust and power of attorney documents) is the best way to protect against the risk of your parent becoming the victim of a financial swindle or management misstep that could cost them dearly and create hardship both for them and for you.
Without such documents in place, it can be very difficult to effectively intervene in a moment of crisis.
If, for instance, you suddenly become aware of a dangerous financial situation, but you don’t have the proper authority to take steps to avoid or mitigate that situation, you may have to go to court to establish conservatorship. This can be a slow process and can also expose your parent to a loss of privacy because it will require a disclosure of medical condition and other personal details.
Why it’s important to have this conversation sooner than later
The best time to talk with your parents about these matters is well before there is any question of capacity. You want them to be able to fully engage in the conversation and express their wishes clearly. Early intervention allows for a much more productive dialog.
That said, it’s understandable if, despite best intentions, you keep putting the talk off. If that’s the case, there are a few red flags to watch for. For instance, general signs of decline and struggle may indicate that time is running out to have a proactive conversation about finances. If your parent is uncharacteristically forgetful, clumsy, or seems to struggle with routine daily tasks (keeping house, personal hygiene, driving, etc.), it may be time to broach the idea of getting them support to help with managing their finances.
Likewise, if you notice anything awry with your parent’s finances or witness any kind of exploitation, you will obviously want to get involved as soon as possible. There may be a pile of unpaid bills, missing money, or a string of reckless purchases. On the more nefarious side of things, there are certain things that should definitely set off warning bells:
● changes in beneficiaries
● the appearance of unexpected caregivers
● unfamiliar names on bank accounts
How to have the conversation with the least stress and emotional strain
Step 1: Start with yourself.
Money is a sticky subject for most people. Before you engage your parent or parents, take some time to work through your own feelings about the situation.
Step 2: Extend the invitation (and prepare to be patient)
Once you’ve prepared yourself, you can simply invite your parents to talk. The key is to be respectful and let them know that your motivation comes from wanting the best for them. One of the scariest parts of getting on in years is losing control of things, so once you’ve extended the invitation to talk, be patient. You may have been thinking about this for a while, but it may be a completely new idea to them. Give them time to process.
Step 3: Break things down and offer reassurances
In most cases, brevity is your friend. Don’t try to get everything out in one, long talk. Break things up over time. Tackle one piece of the conversation at a time so it’s not so overwhelming.
Above all, find ways to help your parent or parents retain as much control and say over their finances as possible. Make sure they know this is not a hostile takeover; it’s an offer of support.
Step 4: Get help when you need it
Finally, no one says you have to navigate this difficult conversation or process on your own. Any one of our Connecticut elder law and estate planning attorneys can guide you through all the options and choose the legal structure that is most appropriate for your family.
So go ahead – get brave. Initiating this conversation now will help make things go much more smoothly later. And it may provide a much-needed sense of calm and certainty during these challenging times when so much else is outside of our control.