Discussing finances with aging parents can be challenging. As a result, many families delay these conversations or avoid them altogether, which can lead to unexpected financial surprises, misunderstandings and conflicts.
By talking openly about money, you ensure both their future and yours are secure, prevent potential disputes and assist in planning for longterm care. The goal of this conversation is to understand their financial situation, ensure financial stability and facilitate smooth estate planning.
Parents who have accumulated wealth over the years may resist the idea of needing help managing their money. It is important to be mindful of your language and positioning. Avoid saying, “I need to know how much money you have” or “You shouldn’t do this by yourself.” Instead, use more delicate ways to broach the subject:
- Segue from a broader topic.
Start by finding common ground, such as discussing recent market conditions or rising healthcare costs. This can naturally lead to conversations about the health of their investments and any concerns they might have about their retirement savings. The initial goal is to make them comfortable with the broader discussion before moving on to more sensitive topics.
Example Script: “Have you been following what’s going on in the financial markets?” or “I read so much about the cost of healthcare. What’s been your experience lately?”
- Inquire about their financial advisor.
Mention that you work closely with your advisor and that you’re curious about their experience. This allows you to gauge the depth of their relationship, frequency of contact and trust in recommendations.
Example Script: “I’ve been meaning to ask you, how do you like your financial advisor?” or “What has your advisor been telling you lately?”
- Blame it on your financial advisor.
If bringing up the topic feels too personal, use your financial advisor as a reason for the conversation. This can reduce some of the discomfort, as most financial advisors agree that family financial discussions are beneficial.
Example Script: “My financial advisor suggested that it’s a good idea for families to discuss their financial plans. Would you be open to going over the basics together?”
- Inquire about the handling of their estate.
If you end up playing a direct role in executing their estate, you have an interest in ensuring things are well thought out and coordinated. Even so, frame this in their interests, not yours.
Example Script: “I read so much about estate planning and what can go wrong. Do you feel good about your plans?” or “If you don’t mind me asking, how recently have you updated your estate plan?”
Approaching the money conversation with empathy, timing and a collaborative mindset can make this easier for everyone involved. Start small and gradually move towards more detailed conversations. This works best when discussed over multiple conversations. Simply initiating the dialogue can often be the hardest part.
- Securities offered through LPL Financial. Member FINRA/SIPC. Marzano Capital Group is another business name of Independent Advisor Alliance, LLC. All investment advice is offered through Independent Advisor Alliance LLC, a registered investment advisor. Independent Advisor Alliance is a separate entity from LPL Financial.
