Talking to Mom About Money (Caring for Elderly Parents)

We all love our moms. They have done so much for us in the past and they still do. But at some point, as she continues to get older, we may have to actually start taking care of her. With Mother’s Day approaching I thought it was a good idea to talk about what we can do to make sure we are not only thanking our Mom but also taking on the role of adult son or daughter so we can start repaying some of those things she has done for us over the years. And this really applies to Dad as well. How can we take care of our aging parents?

The first thing we want to know is what are their goals and wishes? Do they plan to leave money with a charity? Do they want you to make their end of life care decisions? Once we know what they want, then we need to find out about finances to see if those goals are realistic. But be warned, this won’t be an easy topic for many parents. Many are prideful, most are uncomfortable with the topic and money and nearly everyone is afraid to talk about the end of their life, so be prepared for some resistance.

The easiest way to get anyone to open up about money is to start the conversation about other people. Ask them about how their friends are doing? Then ask about their friends’ financial situation or medical situation. If that doesn’t work then start asking your parents about advice for your money. Start with easy topics (“I am thinking about buying a new car”), then move on to things like retirement and life insurance. As they answer you, slowly move into, “how would you handle it?” then “how did you handle it?” then “what would you have done differently?”– then you can move into, “how are things now?”

To make sure your parents are taken care of during their most vulnerable years, the big three documents they need are a living will, a health care proxy and a durable power of attorney. These documents not only give you the permission, but the responsibility of making decisions on your parent’s behalf when they cannot due to medical, mental, or other circumstances.

A living will stipulates exactly the circumstances under which your parents do and do not want life support. It provides instructions to a hospital or doctor, and helps to prevent arguments between siblings and other family members during a very emotional time. A health care proxy gives you the legal authority to make health care decisions on your parents’ behalf. Navigating the paperwork from doctors, hospitals, and insurance companies can be overwhelming. Having the ability to make some of the health care decisions and to sign for your parents can greatly reduce the stress and streamline the paperwork burden that results from a doctor or hospital visit. A durable power of attorney gives you the same decision making authority for all your parents’ financial affairs as a health care proxy does for health care decisions.

To protect their assets and their wishes after they are gone, they will need a will. A will is critical because without it, everything goes to probate upon their death, which basically means it has to go through the court system. This can cause problems and it takes a lot of time. In addition, if you have siblings, a will can at least reduce if not eliminate rivalry and infighting amongst the family. Also, if your parents want to do something great like give a large donation to a charity or have a building or even a business program at the local community college (hint, hint) named after them, those are the types of wishes that are more likely to be carried out if it is in their will.

But a will is only part of an overall estate plan. I have heard from so many people that they think estate planning is only for the super wealthy. That is just not true. Most people have more money and assets than they realize, so estate plans are for everyone. They just get more complicated when you have more wealth. With 401Ks, life insurance policies, homes, cars and so forth, there could be a lot of consequences to not having a good estate plan. A lot of family wealth could be lost in taxes without proper planning. Or a parent could be holding onto money that could otherwise be helping children or grandchildren with college, medical expenses, or everyday life simply because they don’t understand the current laws about gifting and so forth. Everyone who wants to maximize the use of their assets after they are gone should have an estate plan so they can make the right decisions now. When combined with a will this means their money will go a lot further towards the things they want when they are gone.

I thought this topic would be appropriate now because we are thanking and thinking about our mothers. But that should not just be a once per year occasion. We need to think about our mothers and fathers as they age and think about how we as responsible sons and daughters can take care of them. At some point you need have these difficult discussions. But that doesn’t mean you should show up on Mother’s Day with a bouquet of legal documents instead of flowers. Do that and you just wasted your time reading this article – because you won’t even make it into the will anyway!

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The three authors, Bill Pratt, Mark C. Weitzel, and Len Rhodes, are industry leaders in personal financial education. Together, they have a combined 75 years of experience in banking, economics, and entrepreneurship. Now, they teach thousands of students personal finance concepts and decision making skills, author textbooks and public press books on personal finance, and help schools develop innovative personal finance literacy programs. Recently, they were instrumental in developing a personal financial management certification program for leaders in higher education. The other books in The Money Professor series include The Graduate’s Guide to Life and Money and Extra Credit: The 7 Things Every College Student Needs to Know about Credit, Debt & Ca$h. Their books, lectures, and programs give students, parents, and educators the tools and knowledge to make good financial decisions all their lives.