Sitting your parents down to talk about their finances may feel like an awkward thing to discuss. But it is important to do because if your parents needed assistance or support with finances regarding their savings, or had not set up a will yet, who else but their next of kin would step in to help. For instance, in case of a health emergency you needed to obtain access to their bank account to pay their medical fees or have their finances managed, the only way you could have done it was if you were named your parents’ power of attorney by them and assigned their medical-care surrogate. It is better to have made such financial arrangements early on because, during an emergency, you might not be able to think straight because of stress and confusion. You need to collect as much information as you can regarding their finances. If they agree, ask them to write their information down on paper so you can use it when needed.
Here are a few things you should be prepared to ask them:
- If they are in debt.
- If their savings are enough to live a contented life in retirement.
- If they have an established plan for extended payments if needed.
- The kind of insurance strategies they have.
- Where they have their safe deposit box stored and what they have inside it.
How to go about doing it
When you start the conversation with them, try not to patronize them because this could scare them away. Also, make it clear that your motives are not selfish. They should know that this conversation is for their benefit and not yours. Do not try to convince your parents by saying you will not help them later in life if they refuse to talk about their finances. Try not to pick talking to them on days like holidays and opt to pick a time when your parents are calm and relaxed. Here are some ways you can get through to them with your motives. You can also start with stories of other peoples’ experiences, prompting them to start sharing their own too.
Share your own experiences with them
You can get your parents to open up and gain their trust by telling them about how it was for you in terms of legal documents. Make it clear to them that, again, you do not intend to find out if your name has been mentioned in the will or not, and how much you will inherit. In return for knowing where they have placed their asset planning documents if you recently wrote a will, let them know where you have it so they can retrieve it for you if you ever run into an emergency. Some parents might also find it embarrassing for their children to be advising them about their finances. So, you can begin by asking their advice on your financial decisions. Putting them first this way, they will be able to let their guards down and not feel as embarrassed sharing their own information.
Lift their burdens
You can initiate automatic fee payments for them so you can keep an eye on their funds (and help them accordingly), and they can stop worrying about having to pay their bills and have some more time to themselves.
Talk about present issues
Ask your parents if they have made any arrangements keeping the global pandemic in mind, because anyone can run into emergencies, including medical ones. Ask them if they have assigned a health-care surrogate for themselves who can make their decisions for them when they are unable to.
Getting reluctant parents to open up
You may ask hesitant parents to write down their information instead of telling you if that makes them uneasy. They may write down their financial accounts on a piece of paper and store it somewhere safe for you to access.
You can remind them of how their parents did, and where they may have fallen short, their hardships and how they dealt with them, or are still dealing with them.
If you still find your parents showing reluctance in sharing their financial info with you, you may call in someone else worthy of trust to offer help, like a friend you consider family or your parents’ lawyer. Since parents often do not take advice from their own children too seriously, and they consider talking about finances to them a taboo subject, then a third person (a person they trust or hold in high regards) may be able to convince them with more ease.
What to ask your parents
If your parents agree to talk or if you already get along with them well, then you could easily tell them that you need their financial information so you can help them, and be of assistance if they ever need it. Ask them for the following information:
- Do not ask them about the funds they have saved in their bank, as this may throw them off. Instead, enquire about the bank they have set their account up in. Advise them to pay their bills by automatic bill payment, it would be even better if you helped them go about it. This is to confirm that their bills are paid automatically if, for instance, they end up needing medical care for a while due to being injured.
- Ask them if they have anyone to make their financial decisions for them, and medical health care surrogate, if they are unable to do it themselves. Otherwise, a judge in court will determine who makes the financial or health care choices for them.
Enquire if they have a will written, because if they do not have it on time, such decisions that are supposed to be mentioned in a will, might have to be handed over to the law of the state to decide who will inherit your parents’ resources.