As my parents are getting older, I’ve had to realize that it’s time to have some conversations now, while they are still vacationing and enjoying their retirement. I know that, just like I’ve planned for my own family’s future, I need to be ready to step in for my parents when the time comes.

I’m part of the “sandwich generation,” in the middle between looking out for older parents and raising a young family, and I have plenty of company!  According to Senior Living, the sandwich generation is big and its members often find themselves facing the emotional and financial challenges that can come with caring for two generations at once.

Being prepared by taking some important steps now can ease the challenges ahead. With the holidays around the corner, now is good time to have “the talk” about finances.

As parents age, one of the first things they begin to struggle with is keeping up with their finances. I’ve got some tips for helping you and your siblings discuss these sensitive matters with your parents while  still being respectful:

  • Start the Conversation Early: Call a meeting with all your brothers and sisters, even if only by Skype or conference call. If this is a particularly sensitive topic, choose someone to speak one-on-one with your parents so they don’t feel ganged up on.
  • Discovery: An effective way to broach the topic of your parents’ finances is to talk about someone who’s been in the news and hasn’t had a trust in place and ask them whether they have core estate-planning documents.
  • Is the information current? Ask your parents whether they’ve updated beneficiaries for life insurance policies, retirement savings plans and other types of accounts.

If they’re reluctant to share details of their finances, stress that your main concern is to be able to locate these key documents if case they are incapacitated or aren’t able to. 

  • Invite a third party: Seek out a pro, such as a financial advisor, elder law attorney or a CPA, as this can often help ease the tension around this topic.
  • We’re in it together: Another non-threatening approach is to provide an example of how you are planning for your own children in the event should something happen to you.  Share with your parents how you’ve put your own estate planning in place: if you’re unable to care for yourself, this is where your important documents are, and this is who she/he could call for help on your own assets. This can often trigger your parents’ own discussions of, ‘Oh, I should do this too,’ or can spur them to share their own plans with you as well.
  • Document your “team” and records: Create a simple document listing names and numbers of bank accounts and investment accounts and the professionals to go to in case you need help. Keep a copy of this with your living trust and scan it and encrypt it for a secondary digital copy. If you have siblings, share this with them too, with your parent’s permission.
  • Help consolidate: Because many older people have savings and investments scattered in different accounts, it’s also a good idea to streamline finances.  Having fewer accounts makes it easier for people as they get older, as well as for anyone helping them. Here is what to include:
  1. Insurance information
  2. Regular bills
  3. Tax Returns
  4. Debts, including mortgages, credit card statements, and car payments.
  5. Identify all income Information about pension(s), life insurance and annuities, including direct deposits. (If they use online accounts include passwords)
  6. Names and contact information for your financial advisor and tax preparer
  7. Deeds to property and cemetery plots, if any
  8. Vehicle titles and registration
  9. If you are the estate executor, copies of the trust and power of attorney.
  10. Keep this document in a locked fire resistant box or safe deposit box. Know the location of the box and the location of the key. It’s even better if a trusted family member is an additional signer.
  • Additionally, find out where your parents keep their estate planning documents and make sure they are up to date.  These should include a living trust, pour over will, healthcare directives and durable power of attorney.

    Unfortunately, some of the elderly can develop dementia or other forms of declining mental capacity and can fall prey to scammers.  Here are some red flags to look out for:

    1. Assess your parents’ money management: Watch for unpaid bills, unopened mail, unusual purchases, asking the same question repeatedly, giving away a lot of money or having trouble balancing the checkbook. Ask them where they have their money and how it’s invested. This is a great first step.

    Step in slowly by sitting down with them on a monthly basis as they pay their bills. If your parents need more help, offer to use your power of attorney status to help pay bills.

    It’s always best to have these conversations sooner than later.

    1. If you have concerns, consider having your parents be evaluated by their doctor: If they do have dementia, it will be time to talk about executing that power of attorney and taking a close look at your parents’ finances.
    2. Simplify: Instead of writing multiple checks each month, set up automatic bill payments. It’s a good idea for your parents to introduce you to all the professionals in their lives, including their accountant, lawyer, financial advisor and bank representatives, who can be part of your team that manages your parents’ affairs.
    3. Talk about scams and fraud: Start a discussion about various types of scams. If fraud is a concern, freeze your parents’ credit reports at each of the three major credit bureaus. This prevents someone from opening credit under a parent’s name because potential lending companies can’t view the reports.
    4. Be sensitive to family members and share information: One of the most difficult tasks in managing your parents’ money is finding the right way to negotiate the family dynamics involved. Avoid drama by encouraging your parents to make the choice about which family member they want to put in charge — and abide by that decision. Be transparent and you can head off future sibling squabbles.


I’m Winnie

Winnie Sun is among the highest followed financial advisors on social media. Follow her on Twitter @sungroupwp.

If you don't like the story that's told being shared about your industry, it's time to step up and tell your own story. It's survival.


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