Talk to me: Discussing finances with your aging parents

(photo courtesy of http://www.outofajam.net)

Many people find it difficult talking about finances with their aging paren'ts, who would prefer to keep such information secret, even from their kids. But delaying this discussion can have unfortunate consequences especially when there is a crisis according to Carolyn Rosenblatt, mediator at AgingParen'ts.com. She suggests a few ways to get this conversation started: work with your paren'ts over time, ask what they are expecting of you in terms of helping out with their finances, and reassure them that you are not trying to take advantage of them or take away their independence. Let them know that if something should happen you would be completely lost as to how to help them. And finally, choose a quiet moment to introduce this conversation.

Once your paren'ts are comfortable discussing their finances, Rosenblatt recommends going over the following four issues:

1. Legal: Have they done estate planning? Who is their attorney? Is there a will, a trust, and power of attorney? Where are their legal documents? Would they let you speak to their attorney?

2. Healthcare: Do they have additional medical insurance? What is covered? Do they have assets set aside to pay for care at home? Do you have permission to speak with doctors?

3. Income and expenses: What income do they have? What are their debts and expenses each month? Do they have a financial planner? Do you have permission to contact that person?

4. Financial records: Where do they keep their tax returns? Who prepares them? Where are their bank accounts and other records of assets? Do they bank online? Where are the usernames and passwords?

Keep records to organize all of the above information and make sure to keep all siblings in the loop. Offer your paren'ts assistance so that when the time comes to take over completely you are ready to do so. But most important, arrange this conversation sooner rather than later.

Here are a few books that can help you prepare for this important stage in your life: