What to do when it’s time to help your parents

In matters of financial affairs, the day may come — if it hasn’t arrived already — when you’ll be parenting your parents. They may be losing their ability to stay on top of routine money matters. Or they may lack the knowledge to handle some of the more involved issues of later years, such as tax and estate planning.

If you’re lucky, your parents are willing to accept your help and are open to discussing their financial situation with you. But for many people, it’s not so easy. Some parents simply aren’t comfortable sharing financial matters with their children, and a strategy may be needed to begin the conversation.

Initiating the talk

Easing into the theme often works best. You might broach the subject by mentioning a real-life financial situation involving a relative, friend or co-worker, such as a conflict among siblings over an expected inheritance, or a case of fraud that targeted a senior. Or you can talk about some element of your own financial life, perhaps updating your will, then lead to a question about your parents’ will or whichever subject you raised.

If you think the money talk is going to be overwhelming for your parents — or for you — consider having a series of little chats now and again. For example, one time you might ask if they have a power of attorney or enduring power of attorney (mandate in Quebec). On another occasion, you might ask about their will. If you have siblings, it may help to share the effort.

Finding out about finances

Very important to find out, but possibly difficult for your parents to divulge, is their financial status. Is their retirement income sufficiently covering their expenses and lifestyle? Do they have the financial resources to meet future contingencies such as health care needs?

Ask what insurance coverage they have — not only life insurance, but also any long-term care coverage. It’s important for someone — whether it’s you, a sibling, or your parents’ lawyer — to know where these policies are and who the issuer is, in case a claim needs to be made.

If your parents have significant assets, such as a vacation property or investment portfolio, they may not be aware that their death could trigger a sizeable taxable capital gain. An estate plan, possibly including one or more trusts, might help preserve their assets.

Find out if your parents are aware of senior fraud and how it’s perpetrated. You may want to suggest they check with you first whenever an individual or business asks for money or offers a service.

How you’re affected

Once you’ve gathered information from your parents you’ll have a better idea how you can help them. That might range from simply helping them with their day-to-day banking to providing them with financial support.

If you are named executor or co-executor of their will, you’ll want to know where the will is kept, along with any other important items, such as a safety deposit box key. You’ll also want the names and contact information of their lawyer, accountant, financial advisor, banker and other professionals. Do you have financial power of attorney and/or power of attorney for personal care for your parents? These documents allow you to make financial and personal care decisions on behalf of your parents. You’ll need contact information for your parents’ physicians and medical specialists.

If you have siblings, it can be very beneficial to encourage your parents to communicate their plans for your inheritance. Any unexpected issues among siblings can be dealt with now, avoiding conflict after your parents’ passing.

Helping your parents is all about finding out if they’re in control of their financial life and stepping in if they are overcome by financial issues. The sooner you start talking, the better. If you wait until a health or financial issue develops, it means starting off in a stressful situation. If all goes well, your parents will not see your involvement as an intrusion, but as a way to show you care.

Sometimes, it can be beneficial to have a knowledgeable, impartial third-party present for family conversations around financial matters. If that is the case in your family, please remember that we are here to help you.