Many children of the Baby Boomer generation are noticing the warning signs of cognitive decline in their aging parents, and as such these parents are becoming more unable to handle their own financial decisions. Typically, a parent has an estate plan in place that appoints a person, usually a child, as the person financially responsible for their wellbeing when this occurs.
However, sometimes the estate plan appoints the other, also aging and ailing parent, to make the financial decisions, or your parent never made an estate plan. If your senior parent has not created an estate plan or has named the other parent, there are steps that you can take to protect them and their financial security. Updating the Durable Power of Attorney form is a great way to ensure that your parent will be well cared for regarding their finances.
The more difficult part of dealing with your parent’s finances is not drafting the necessary documents but having the conversation of transitioning financial control with your loved one. Here are some tips to help make that conversation as respectful and smooth as possible.
Acknowledge the Difficulty
One of the best ways to set the tone of the conversation is to admit to your parent that this is a difficult situation and is challenging for everyone involved. If your parent has been a powerful person during their lifetime and has “been the boss” with decision making power, this conversation can be especially difficult.
Let your parent know that you understand where they are coming from and empathize with their situation. You should try to communicate that the reason for this decision is to protect the hard work and smart financial decisions that they have made as parents throughout their lifetimes and that you are only there to help.
Choose the Right Time
You should also carefully choose the right time to have this conversation with your aging parent. Try to pick a time where they are minimal stressful events going on that could distract from this important discussion. There may be no perfect time to have the talk, but avoiding times of illness, deaths in the family, divorce, or other hardships may make it easier.
Let your Parent Choose the Meeting Place
In addition to choosing the right time to have the talk, it is equally important to pick the meeting place carefully. If possible, let your parent choose where to meet, and make sure that it is a place where they are comfortable. You should be honest about why you want to meet because it could have an effect on where they choose. Encourage your parent to tell you their concerns about the situation, and be an active listener.
Expect Resistance and Plan Ahead
Finally, you should expect some resistance from your parent when you have this conversation and do some advance planning accordingly. No one wants to think that they are too old to handle something, especially something as important as their finances. If your parent pushes back about meeting or discussing the transition, explain that you understand but it is necessary to do. Try not to push too hard, but gently persist in your efforts to have this conversation and begin the necessary transition.