Protecting Your Parents' Money

Jeff D. Opdyke

• Publisher: Harper Paperbacks
• Year: 2011
• ISBN:
  9780062079404
• Topic: Développement personnel
• Subtopic: Finances personnelles

Wall Street Journal "Love and Money" columnist Jeff D. Opdyke offers a compassionate and highly effective handbook designed to help elderly parents manage their money. Protecting Your Parents' Money is the essential guide to helping Mom and Dad navigate the finances of retirement, covering such topics as understanding Medicare, preventing elder fraud, and the hunt for a quality, affordable retirement home. Protecting Your Parents' Money is a book everyone should own, as members of the Baby Boomer generation find themselves dealing with the many financial problems surrounding aging parents, and face their own future as seniors.

Chapter 1
The Talk

THIS IS THE SINGLE most important chapter in this book. I placed it first in line for one overarching reason: Just about everything else you will read in these pages—and all your efforts at helping Mom and Dad manage or deal with the financial aspects of aging—will work out so much easier for you and your family if you first learn to communicate with your parents.

Everybody thinks they know how to communicate because, well, we’ve all spent thirty or forty or fifty years or more expressing our thoughts and feelings and emotions. We’ve learned how to talk to one another. So, really, how difficult can chatting with parents be? Just ask the questions for which you want answers and then catalog what Mom and Dad say.

Good luck with that.

I promise that for many, many families the necessary answers won’t be that easy to pry loose. Just as you are likely quite private with your own finances, your parents are just as private with theirs. They easily could look suspiciously on your unexpected queries about their money, what they spend their Social Security checks on, where their bank accounts are located, and their plans for distributing an estate when they pass on. As such, don’t be surprised when Mom or Dad or both delicately or brusquely brush aside your advances, stall providing adequate answers, or even express outright worry or anger over perceptions that you might be out to wrest control of their financial freedom or, worse, rob them of their assets before they’re dead. Dramatic? Yes. However, the news in the last decade or so has been filled with so many sad tales of elderly victims of financial abuse, statistically perpetrated most often by a family member, that aging parents at times can’t help but question a child’s intentions. In short, Mom and Dad, at least in their own minds, have real reason to fear your unwanted intrusion into their personal financial lives. As a result, the answers you want aren’t always as forthcoming as you might expect.

And those parents who do want to talk, meanwhile, the ones who implicitly trust their children and want their kids involved in making the big and small decisions of old age, don’t always know how to tell you what they want to say for fear that you don’t want to hear it. They don’t know how to ask the questions that have them concerned, and they worry they’ll be thought of as stupid or financially incompetent. Sometimes they simply don’t know how to begin the conversation.

Parents, of course, aren’t the only ones incapable of expressing themselves. Kids, too, feel intimidated asking Mom and Dad highly personal questions about an aspect of their lives that might always have been private. Kids often assume parents don’t want to talk, and so they never raise the questions they need answers to in order to understand whether their parents might need help with some part of the day-to-day finances. Others simply refuse to contemplate Mom or Dad’s mortality.

This lack of communication can be a major problem in the unique relationship between elderly parents and their grown children. Because once it’s too late, it’s much too late. When a parent falls ill or dies, you’re suddenly thrown into the tempest—unprepared for all you will have to confront in managing the situation. Take, for example, the simple safe-deposit box. All you need to know is the location of the bank and the key to get into it, right? And since you already know where Mom banks and the desk drawer where she keeps the key, you’ve got that covered; you know that when the moment comes you can at least access the box to gather the paperwork she’s kept stuffed in there ever since you were a kid.

However, you’re in for a stressful confrontation with that bank at precisely the moment in life when additional stress is the last burden you want. When you try to access the safe-deposit box, Mom’s banker will bar you, legally, from even entering the vault if you’re not listed on the account. While some states will allow heirs or executors to access a safe-deposit box when an owner dies, that’s not the case everywhere. So when you’re in desperate need of the will or the insurance contract or burial papers or some other document you know is in that box, you might find you have no access. You’ll have to hire a lawyer to help you jump through the various hoops required to prove that you legally have a right to open the box. Had you and your parents had the appropriate discussion about what’s in the safe-deposit box and how they want to handle who has access to it in an emergency, you wouldn’t be in such a frustrating position when emotions are already running high and the last complication you want is an inability to provide for your parents.

It all begins with a few simple words: “Mom, Dad . . . can we talk?”

When to Have The Talk

LIFE IS RARELY CONSIDERATE enough to dish up a perfect moment for every key episode we must live through. In some families an event might transpire that clearly exclaims in its subtext, “Now is that perfect moment. Act!” That could be the death of one parent, a hospitalization that leaves Mom or Dad incapable of handling money matters, or it could be a financial emergency in which a parent seeks money from you to cover an expense. If those situations arise in your life, take advantage of them in the moment and have The Talk.

Not every family will have that opportunity, though, and the absence of a dramatic event doesn’t negate the need to talk to parents about their finances. Instead you’ll have to fabricate a perfect moment, and, well, there’s no time like the present—because you just never know what the future might hold or how soon that future might arrive.

The time to initiate The Talk is when questions about your parents’ financial self-sufficiency become an issue you spend time thinking about yourself. Unless your only concern is when you’re going to get your hands on your parents’ money (and that’s not a healthy concern), thoughts about their financial life generally don’t just pop into your head without reason. You’ve probably noticed something subconsciously—maybe even overtly—when you’re with your parents or when you’re talking to them. Pay attention to those instincts. You might not immediately be able to pinpoint exactly what has you concerned, and that’s fine. The point isn’t to immediately recognize the worrisome issue, but rather that you are worried and that you want to better understand your parents’ finances so that you can assist them effectively, if and when the times comes to do so.

Sometimes parents will signal when they want to have The Talk. So listen to what they say and pay attention to the context. A parent, for instance, might be fretting about paper losses suffered in the stock market or worrying about replacing a car, and they’re seeking your advice. Maybe they’re complaining about a large medical bill or an overdue utility statement that has destroyed their budget. Such comments might well be a parent’s way of trying to draw you into a conversation they’ve wanted to have with you for a while but were afraid to initiate for any number of reasons. Pounce on those opportunities. This is your chance to open up a much more thorough discussion about their finances without having to be the one to broach the subject first.

Whatever the case, remember that you’re not just helping your parents; you’re helping yourself and your own family. Ultimately, helping your parents manage their finances means you’re running two households—yours and theirs—and anything you can do now to prepare for that possibility will be preparation well worth the effort.

So initiate The Talk sooner rather than later.

Breaking the Ice

MONEY IS TABOO, no two ways about it. More times than not, people are reluctant to share the innermost details of their wallet, even with their own offspring, out of fear they’ll soon be separated from their own money in some reprehensible fashion.

That taboo is particularly strong among the elderly, who typically grew up in an era where money simply wasn’t discussed openly among family members. Think back: Did your parents talk to you about their income, household expenses, or budgeting worries? Probably not. And that probably hasn’t changed all these years later.

Along with privacy, there’s also the issue of pride. Every adult wants to feel capable of managing the finances of daily living. Indeed, starting at an early age money management is a large part of what many of us define as independence. Even when young kids first begin to learn that green paper can be traded for toys at the store, they want to be able to control their own (albeit limited) financial resources—if only to buy as many toys as they can. Little wonder, then, that broaching the subject of Mom or Dad’s personal finances naturally raises defenses in parents who have been in control of their own pocketbook for decades. And some people, even in their dotage, simply do not want to be reminded of their mortality, which is clearly a central point when you ask your parents about the end-of-life issues that are inherent in The Talk.

As such, breaking the ice is a game of perception. If you come on too forcefully, as though you are trying to commandeer their money for their own good, Mom and Dad will shut down, concerned that you might only be after their money for your own uses. If you come off too meekly, as though you’re just a friend asking if everything is OK, they’ll easily deflect your questions and say, “We’re fine; there’s no reason to worry about us, Honey,” or something along those lines.

You want an approach somewhere in the middle of that spectrum. On one hand, you want to be heartfelt and sincere. On the other, you should be clear that while you might not try to delve into every last aspect of their financial life, you’re not taking no for an answer because understanding how you might be called on to help or take control of assets and bills and whatnot in an emergency is that important to you.

Some personal finance publications encourage a backdoor approach to this conversation and suggest you start by sharing your own experiences first—something like: “You know my retirement plan really took a beating in the market crash. How is your account holding up?” Some suggest using the “I have a friend” approach, as in: “I have a friend and this, that, and the other thing just happened to his/her mom/dad. Has anything like that happened to you?”

I’m not saying don’t try these approaches; they might work with some parents. But they are tepid at best and easily brushed aside by parents who feel uncomfortable talking to you about such a personal subject, regardless of your own experiences or those of that “friend.”

The best approach is at once the simplest and, for some people, the most difficult:

Conversation Starter

“Mom/Dad, I want to talk to you about your money. I know it’s a private matter, and I know you might not feel entirely comfortable talking about it at this very moment, but I’d like to make some time to sit down with you and understand your finances so that if anything ever happens I can help you deal with it in whatever way you need me to help. If there are financial items or accounts that you don’t want me to know about, that’s fine. But I would like to know what accounts and what documents are necessary for managing your household, your health, or your finances in an emergency or when you pass away.”

Direct. Honest.

True, summoning the gumption to raise the issue might not be as easy as that simple string of words might suppose. And your parents might not immediately open their wallet to reveal the secrets to their financial kingdom right then and there. But they’re much more likely to respect your approach because it clearly leaves them in control of the process and tells them you’re not out for selfish gains. Moreover, they are quite likely to see that you’re being sincere about wanting to be there to help them when they ultimately need the help of someone they want to be able to trust. That will go a long way in setting a parent’s mind at ease. And even if your parents aren’t inclined to open up at the moment you raise the topic, there’s a very good chance you will receive a phone call in the not-too-distant future with an offer to sit down and talk about finances. When that day arrives, you’re also quite likely to find that Mom/Dad is not only willing to talk, they might even have an envelope waiting for you that contains the keys to their personal financial vault: the locations of their accounts, copies of their insurance policies and other important paperwork, and instructions on how they want you to handle their end-of-life issues.

For parents who do want to talk but have been just as anxious as you about diving headlong into such a potentially emotionally charged conversation, breaking the ice in a direct, honest manner gives them the entry they’ve been looking for. They might jump at the chance to finally open up and share with you all this information they’ve been waiting to divulge. At the end of the day, the elderly want to feel secure, and part of that security comes in knowing there is someone they can trust with their finances.

Some people, of course, will still feel queasy questioning Mom or Dad directly about money and end-of-life preparations. If the spoken word is a problem for you, then write a letter or e-mail. Your note—again, honest and direct—should clearly explain what you’re seeking. Detail why the information is so important to you—and stress that you want to be able to help effectively when that help is needed most. Also explain honestly why you’re writing a letter instead of talking face-to-face (maybe you feel uncomfortable talking about this issue with the people you love most because it raises in your own mind those issues of Mom and Dad’s mortality; maybe you know you’ll get too emotional talking to them directly; maybe you’re trying to provide your parents a level of privacy that a personal meeting doesn’t necessary allow; or maybe you’re worried a face-to-face chat would come off as too intimidating to your parents, so you’re taking another tack that provides for an easier discourse).

If in a face-to-face meeting your parents are clearly uncomfortable with your questions, offer them the same option of dealing with this in a letter or e-mail. That can be substantially easier on their sensibilities, since it gives them the opportunity over days or weeks to think about what they really want you to know, to consider the benefits of having someone they can trust look out for their best interests, and to gather the data they want to share. After that you can go back, if necessary, and ask questions that will help fill in whatever holes might still exist in your knowledge about your parents’ finances.

None of this means, of course, that your parents have to play ball. For whatever reason, they can still say no to your advances, and there’s nothing you can do about it. Unless Mom/Dad clearly shows signs of a medical issue that prevents them from acting in their own best interest, you cannot force yourself on their pocketbook. You can ask. You can try to be persuasive. You can provide ample evidence that you want to protect and help them and that you will stay clear of their accounts until you’re asked to step in. But if the answer is no, well, then the answer is no and your only choice is to back off—graciously. You’ve made your concerns known and if your parents ever reach a point where they want help—or need help—they know they can turn to you.

What Not to Say

IT’S A STAPLE OF weeknight sitcoms: the inappropriate comment that suddenly quashes the protagonists’ efforts up to that point. The same problem arises all the time, as well, when otherwise well-meaning adult children endeavor to help their parents. You say the wrong thing or take the wrong tone, or your parents simply perceive your words and tone the wrong way, and suddenly your efforts are dead in the water. As such, what you don’t say—and how you say what you do say—are crucial factors in The Talk.

Thus, the primary rule: Avoid anything that sounds like blame. Criticism and condescension are off the list, too. Never utter statements such as: “You brought this on yourself.” “This is all your fault.” “If you had listened to me instead of _ ” “You don’t understand” (which implies your parent isn’t as smart as you). “You really screwed this up.”

Think about yourself. How do you typically respond when people criticize you, condescend to you, belittle your actions, or try to make you feel rotten because decisions you’ve made have, after the fact, proven less than stellar? You’re angry, yes. But you’re probably mad at yourself already, so the last poke you want is from family or friends who make you feel worse. More to the point, in these instances you’re not terribly inclined to listen to whatever prescriptive advice that critic is offering. Instead, you’re more likely to write off this person as, essentially, a jerk.

Parents are no different. The worst action you can take is to get mad, raise your voice, yell, or threaten to take control of your parent’s finances anyway or to seek legal advice in helping you take control. Such outbursts and threats only highlight parental worries that your true interests lie with the money—not Mom/Dad’s well-being.

Along these same lines, do not impose your will or take control of situations, accounts, or decisions until a parent asks you to do so. (Clearly, in an emergency, if Mom or Dad falls ill or is somehow incapable of managing his or her financial life, you must impose your will out of necessity, but that’s a very different circumstance than the requirements of daily personal finance.) A parent might ultimately want you in charge, but it’s a decision you want your mom or dad to come to and voice independently. Parents aren’t always looking to you to assume control of their finances; in many instances, they simply want your input because they value it or because they trust that you will lead them in the appropriate direction even as they maintain financial autonomy over their own wallet.

As such, when talking to parents about their money, their financial decisions, bequeaths they expect to make, and other end-of-life issues, structure your com...