How to talk to aging parents about their finances.

If you’re an adult with aging parents, you’ve probably thought about what’s in store in the years to come. From managing health concerns to ensuring that your parents enjoy independence for as long as possible, one thing is certain: Big decisions will need to be made. While these topics can be difficult to talk about, the sooner you start, the easier those decisions will be when they come.

Planning for the conversation.

Talking about money can be challenging, especially when it comes to older parents who may be adjusting to life changes like retirement or downsizing. If you have siblings, consider getting together to talk about any concerns and come up with a list of potential questions and topics in advance.

Sometimes it’s wise to plan around a family event where everyone will be in town; the holidays can provide time for conversations. Make sure to choose a time and place when everyone is calm and comfortable, and think about designating a spokesperson if multiple siblings will be in attendance.

You may want to discuss your parents’ current financial situation and healthcare wishes. For example, do they plan to stay in their current home? How will they manage planned and unplanned medical expenses? Do they need help budgeting or managing finances? Discussing whether any estate planning documents are in place is an important piece of the puzzle.

First, find out where important documents, passwords and contacts are kept.

It can become much more difficult to help a parent in need or who has passed if you’re missing details about or access to things like bank accounts, life insurance and taxes. Asking about the following before these items are needed can save hours, even weeks, when it matters most:

• Where to locate important documents like insurance policies, property deeds, marriage and birth certificates, and tax returns
• A list of financial accounts, locations and passwords
• Where and how to access any safe deposit boxes
• A list of important contacts including doctors, financial advisors, attorneys, insurance agents and mortgage contacts
• Where to access health insurance information, current medication information and medical history; encourage parents to sign a HIPAA release so doctors can share medical information with family members

Consider talking about fraud and elder financial abuse.

As parents age, many can become more susceptible to scams and fraud, especially when they’re being targeted by ever more tech-enabled scammers.

• Educate them on the latest frauds and scams, especially those targeting seniors.
• Talk about whether they have identity protection and/or a credit freeze in place.
• Counsel them that, unfortunately, caregivers sometimes take advantage of older people and that checks, IDs, credit cards and other personal information should be stored in a secure place at all times.

Next, talk about what estate planning documents are in place.

Documents like wills, trusts and powers of attorney are common tools to help ease the process of aging and estate planning. Some important documents to consider are:

• A living will that specifies someone’s preferences for medical treatment should they become incapacitated
• A will (also known as a last will and testament) that outlines how someone wants their assets, property and belongings to be distributed upon their death
• A trust, which is a legal arrangement that allows one person (the trustor or grantor) to transfer assets to another person or entity (the trustee) to hold and manage for the benefit of a third party (a beneficiary)

There are also multiple types of powers of attorney, including:

• A healthcare power of attorney, which appoints an individual to make medical decisions in the event that someone becomes incapacitated and unable to make decisions themselves
• A financial power of attorney, which can give someone authority over financial matters for property and financial decisions
• A special or limited power of attorney, which can give someone authority over specific tasks or decisions such as selling a piece of property or managing a specific bank account

Bankers, financial planners and estate planning attorneys can be especially helpful in understanding which estate planning tools might make sense for your family’s individual needs. Getting these tools in place before your parents need them can ensure that, should a crisis happen, decisions can be made with as little stress and friction as possible.

Taking action after the conversation.

These topics are complex and emotionally charged, so it may take multiple conversations to ensure that your parents’ wishes are clear and that plans are in place to support those wishes. Remember that it’s a process, and the goal is to make progress over time.

Opening the lines of communication early and having a plan in place can provide family members with peace of mind, knowing that actions and decisions have been carefully thought out in advance. To learn more, visit your local Commerce branch and connect with a member of our team who can assist with estate planning, elder care services and more.