As relatives gather during the holiday season, seize the moment
to broach sensitive matters
by Lynnette
Khalfani-Cox, AARP,
November 18, 2013
En español
| Are you worried about your parents' diminishing physical capabilities or your
daughter's plans to pay for her child's college education? Is one of your
relatives going through an especially difficult financial period? As you get
together with your adult children
and aging parents to enjoy home-cooked meals or celebrate your family's holiday
traditions, use the following five tips to help you discuss difficult financial
issues.
1. Get the
timing right
The holidays are stressful enough, so just
because your children or parents are visiting doesn't mean you should spring
financial matters on them as soon as they walk in the door. Likewise, avoid
talking about serious financial issues while everyone is seated for
Thanksgiving turkey.
Instead, plan to have more than one talk. Try
first to broach financial issues privately with your family member and let him
or her know you'd like to have a follow-up conversation, perhaps the day after
the holiday.
2. Engage in
conversation, not criticism
If you launch into the "Money Talk,"
nothing will turn off your relatives faster than if you're perceived to be on
the attack or criticizing their financial choices. Ditto for blasting them
about financial matters they haven't attended to yet.
So even if you disapprove of the fact that Dad
still hasn't updated his will or that your newly pregnant daughter and her
husband haven't taken out life insurance, have a conversation about the
importance of each. Under no circumstances should you criticize what they're
doing or dictate what they should do financially.
3. Highlight
the importance of financial documents
One of the biggest money mistakes people make
is failing to let relatives know where their important financial documents are
kept. You may be guilty of this, or perhaps your elderly parents haven't clued
you in on where their key paperwork is stored.
When you have the Money Talk, be sure to ask
family members about the location of their last will and testament, any durable
power of attorney or health care proxy they may have, and their life insurance
documents. It's also wise to ask for a list of key contacts, like attorneys,
certified public accountants or insurance agents who may need to be contacted
in the event of an accident or medical crisis.
4. Focus on one
or two key issues
As tempting as it might be to try to tackle
everything, the holidays really aren't the time to engage in a massive,
comprehensive financial overhaul — or to insist on prolonged, all-encompassing
conversations about money matters. This is especially true if you're dealing
with multigenerational financial issues, like college financing for your
grandchild or long-term care insurance for one or both of your parents.
Instead, focus on one or two crucial topics.
With aging parents, for example, some good areas to explore are estate
planning, asset protection and long-term care insurance. The last is especially
important because a sizable number of Americans — nearly one in five, according
to an October 2013 study from Northwestern Mutual — have provided or are
providing long-term care for someone. What's more, because most caregivers
don't have a plan for paying for their aging relatives' bills, they frequently
find themselves paying out of pocket for their family members' prescription
drug and nursing expenses.
"People are living longer, so the need
for care is very real," says Steve Sperka, Northwestern Mutual vice
president of long-term care. "Planning ahead and putting solutions in
place for potential care needs gives families options and helps protect
retirement nest eggs."
Even if your parents don't currently need your
support or financial help, it's still a good idea to have a conversation about
what their personal needs and expectations are about long-term care.
5. Inquire
sensitively about current and potential problems
If you notice that Mom has slowed down a lot
since you last saw her, or that your elderly father has trouble buttoning his
jacket, don't just brush off those issues as part of the aging process. While
it's true that we all change physically as we get older, you should also be
sensitive to the ways in which physical changes — especially deteriorating
physical abilities — can affect your relatives financially.
For instance, does Mom or Dad require in-house
help? Are they able to perform daily functions, such as getting dressed,
driving or feeding themselves?
You can ask a relative point-blank if he or
she is having any difficulties. But just do so with compassion and sensitivity.
A nonthreatening and caring approach is likely to be much better received than
an offhand comment or a joke about "taking away Dad's car keys."
One other way to more discreetly ascertain
whether a relative might need financial help is to engage him or her in a
conversation about their current finances. Specifically, you can ask about
current assets and income, current debts and spending, and things like their
plans for covering medical and caregiving costs.
Some people may shy away from discussing their
private financial details. But if a relative does open up and expresses
apprehension or anxiety about any of these areas, it's likely a sign that he or
she is struggling financially or is at least worried about the potential impact
of these money matters. If so, it might make sense to suggest meeting with a
financial planner.
The good news is that if you handle things
correctly, having a conversation about finances during the holidays can
increase family communication, solidify family bonds and give everyone involved
greater peace of mind.
Lynnette
Khalfani-Cox, The Money Coach(R), is a personal finance expert,
television and radio personality, and regular contributor to AARP. You can
follow her on Twitter
and on Facebook.
This story was originally published November
2013.
https://www.aarp.org/caregiving/financial-legal/info-2017/family-finances-money.html?intcmp=AE-CAR-LEG-EOA1
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