Some conversations in life truly matter. Talking about money issues is perhaps one of the most important and difficult conversations to have with aging parents. It takes courage and planning. Most of us do not want to talk or even think about our parents’ declining health, let alone financial matters, so how can we volunteer to learn, understand and help our parents as they age?
How to begin
If you find it difficult to start these conversations with your mom or dad, try talking about your own plans. Perhaps you have an RRSP account or have thought about your retirement. Let them know that you care and about how important it is to plan. Use your own life as a bridge to starting a conversation with them.
Also, consider mentioning what is happening to a friend’s family. Real-life examples are good ways to say, “Gosh, if anything bad were to happen to you, how would I manage? What would you like me to do?” Get them thinking about this as a partnership to help take care of them in case of an emergency.
Create a checklist
Use this checklist to help guide your conversations. Try to discuss your parents’ arrangements in the following matters:
- wills and powers of attorney (POAs)
- assets and liabilities
- monthly income and expenses (budgeting)
- bank accounts and passwords
- passwords to access their computer and internet accounts
- tax returns
- investments (stocks, bonds, RRSPs, RIF and TSSA)
- insurance policies
- pension plans (government and private)
- the location of safety-deposit boxes and their keys
- names and phone numbers of financial planners, accountants, banks, insurance agents, doctors and attorneys
- funding-support organizations (e.g., Veterans Affairs, provincial health programs, homecare services providers)
Keeping these items organized is key to your ability to be of value to your parents—and to maintain your sanity! If your parents will allow you to have copies of their financial documents, create a filing system that works for you. Even a simple binder with tabs and envelope sleeves will create structure and order. Do not underestimate the importance of having key documents available at all times.
Wills and powers of attorney
If you learn that your parents do not have wills or POAs in place then you’ve really got some quick work to do. These legal documents are critical. You will be shocked to learn how difficult, complicated and uncooperative the world will be without them. No bank, insurance company, seniors’ home, funeral home or doctor will work with you. Legally, you will be seen as a stranger. You will have no legal right to know about or do anything on behalf of your parents.
If you can accomplish only one task during your conversations with your parents, work with them to have their wills and POAs structured with the help of lawyers and accountants. If you think money conversations are difficult with your parents now, they will seem like nothing compared with what you will face if they have not given you copies of their wills and POAs.
Your parents should make sure you understand and feel comfortable with what these documents say. These can be complicated legal documents. If you have concerns or are confused about what you have read, be honest. Tell your parents that greater clarification is required. Talking to their lawyer is a great way to properly understand and learn their wishes. It is better to ask for an explanation today than to be overwhelmed and shocked by what you learn in the future.
Ask Jamie about his life and he will mostly likely start the conversation by saying, “If only.”
Fourteen months ago, Jamie’s parents had quite stable lives. His mother was living in a long-term care facility with an area for people with dementia. His father was easily able to manage the legal responsibilities for her and his own financial affairs. Things were working just fine until the day Jamie received a call from the hospital. “Come right away—your father has had a massive stroke.”
Jamie found his father in a coma at the hospital, surrounded by life-support systems. Jamie was in total shock—he had played golf with his father just a couple of weeks ago. He was even more stunned when the doctor asked if he was the POA for his dad. Jamie responded by saying, “What? I have no idea.”
After leaving the hospital Jamie went to see his mother. He told the staff what had just happened to his father. Jamie was further surprised when the staff at his mother’s home now also asked about his POA status. Jamie felt completely alone and out of control.
He had never talked with his parents about their financial situation and had no idea where their wills were, if they had POA documents or who their lawyer was. His dad had been in great health and Jamie hadn’t imagined things would change. Why ask or talk about such “yucky” topics?
The search is on
Jamie had no idea where to even begin to look for these papers. He tore through every corner of his parents’ home in a panic. He wanted to be at his father’s beside, but instead he was forced to spend his time and energy looking for the wills and POA. During the search, his father died.
Jamie finally found the legal documents inside the piano bench. He was now accountable for:
- legal responsibilities for his mother
- planning his father’s funeral
- becoming the executor to his dad’s estate
In addition, he had to piece together his parents’ financial situation. In fact, understanding his parents’ money matters has become his part-time job. Jamie continues to find bank, investment and insurance papers all over the house. He thinks his mother may have moved documents around and forgotten where she put them. Some accounts and policies are current while others are closed.
Jamie quickly learned that institutions would not even talk with him on the phone until they had received all the legal documents in their offices. He is no longer surprised when he is required to courier copies of his father’s will or his mother’s POA documents to institutions. He often drops by his dad’s lawyer’s office to get things signed and copied.
Tackle the future today
Jamie’s mother’s health continues to decline. Although it is hard for him to watch his mom change, he is thankful he has legally responsible for her care and finances. “I wouldn’t want anyone but me to have that responsibility,” he says. “If only I had asked my dad about all these things while he was healthy. It would have allowed me to be with him more during his last weeks, instead of being totally out of control.” Jamie regrets those lost days and hours.
Dealing with institutions, banks and advisors has become part of Jamie’s day-to-day life. He often wonders how other families deal with their parents’ affairs without wills and POAs in place. Jamie just shakes his head. “Grieving is difficult enough. Not having the law on my side would only add to the challenges.”
Jamie’s story teaches us to start today in tackling these tricky topics. Having “money conversations” with your parents will help prepare you for whatever surprises life may throw at your family. You will also be proud of yourself and truly be of use to your parents.