The “M” word. Though Millennials are definitely more comfortable discussing the unspeakable than their elders, “M” here does not refer to them.
We’ve examined families’ willingness or reticence to talk about death, with some people even going so far as to plan for their digital afterlife. And while death and dying can be very difficult to face, there’s another area even more fraught with peril than end-of-life wishes. Discussions usually take place behind closed doors, on a need-to-know basis. The taboo topic? Money.
For many families, the words parents, money, and family chat never appear in the same sentence. It’s tantamount to an oxymoron.
Last month we discussed how elders can stay smart about their financial resources when opportunistic businesses attempt to scam them. What’s also essential is for seniors to share their financial circumstances with their adult children or other significant relative(s), so that when the time comes for these responsible parties to take the reins, they won’t be blindsided.
A family money discussion can also be a great way to initiate the HECM conversation, once you have a clear picture of your parents’ resources.
There are certain conversations the older generation must initiate, and money tops the list. Unless a senior is non compos mentis (in which case they are probably already in assisted living or other type of care facility), it’s up to them to broach this delicate topic with their offspring or other responsible relative.
Obviously, the first step is for both halves of a couple to work out their personal desires and details, so they can present a unified picture to family members. As uncomfortable as it may be to discuss what the older generation often regards as sacrosanct information, the reality is, at some point the younger generation will need to take action on their behalf, and trying to manage the unknown in an emergency makes everything exponentially more challenging — especially if they’re facing a health or housing crisis.
If a daughter is struggling to decide whether mom needs to move into memory care and has no idea what her mother’s financial situation is, how much money is socked away in savings and investments, whether she has a HECM, or even whether her parent has a financial advisor, it’s going to be rough sailing.
Creating Financial Harmony
For some families, the “M” word will remain off limits until that crisis looms. Yet concerned children can gently encourage their parents to open up before such an event, saying they want to know about their elders’ financial circumstances now so they can fully and easily support them later on.
Retirement expert Ed Slott suggests 7 money questions families ought to discuss:
- Medical power of attorney: Are there living wills or health-care proxies that detail your desires for medical treatment in case you are unable to speak for yourself?
- Financial power of attorney: Who will handle your money decisions if you can’t make them yourself?
- If you become incapacitated, what are the long-term care possibilities?
- Do you have life insurance or long-term care insurance?
- Are your legal documents current? Do you have a will or trust? Who is the attorney you worked with?
- What about your retirement accounts and beneficiary forms for IRAs and 401(k) retirement plans? Are they properly filled out and current?
- What are your assets? Is there a mortgage or reverse mortgage that must be paid off?
If we’re fortunate, we’ll grow old. Money is a tool for our life journey. The more we can discuss it as easily as we do subjects like home repair, vacations, or our grandson’s strange tattoo, the more prepared family members will be to serve their senior loved ones when the time arrives.