Accumulated debt, unpaid bills, and a general lack of reserve funds can make talking about estate planning with parents difficult. Don’t wait until the meeting with an estate attorney to discuss money woes, as it can add an extra layer of emotion to an already difficult conversation. “For so many, the estate planning discussion is already uncomfortable, and understandably so,” said Ashley Agnew, financial therapist and director at Centerpoint Advisors, LLC, in Massachusetts, via an email with The Balance. “Death and taxes—not fun.” Learn to spot some of the signs of financial problems your parents may be exhibiting, then learn how to gently initiate a conversation.
What Are the Signs of Financial Hardship?
Many older people carry debt as they near retirement age, according to a 2021 National Bureau of Economic Research paper—much of it due to student loans, unpaid medical bills, and having children. According to Todd Christensen, a financial counselor at MoneyFit Debt Reduction Services, signs of financial hardship among older people can include:
Unexpected bank overdraft chargesRapidly building credit card bills or other debtUnpaid billsCollection agency contactsDwindling bank accountsSelling furniture, heirlooms, or other valuable belongingsEvents of identity theft and/or fraud
Mood changes can also indicate embarrassment or anger around money management, said Christensen. In addition, “if we hear parents talking about opportunities they can’t miss, or that they met someone with a great opportunity to ‘help me secure my retirement,’ it’s a huge red flag,” Christensen said. The opportunity can be as simple as a legal multilevel marketing opportunity (requiring a significant investment) or an actual pyramid scheme, he said. Agnew said additional warning signs often seen among older adults include signing up for “cold-call” products such as:
AnnuitiesReverse mortgagesViatical settlements (selling life insurance policies for cash now)
These products might have a place in some financial plans, Agnew noted, and curiosity is normal. “The ads are enticing and sales representatives can be very convincing,” she said. But most commission-based products and salespersons don’t necessarily have a fiduciary obligation to act in the best interest of their customers. If parents don’t truly understand the programs or products, they may be showing a loss of capacity for money management, she said. As well, “if resorting to a nuclear option, there may be a bigger financial problem lingering,” Agnew said. “If an older parent shares with you that they used one of these products or programs, chances are you might not be getting the entire story.”
How To Start the Conversation
In a GoBankingRates survey of Americans, 22% said they’d only have a conversation with their aging parents about parental finances when they showed signs of needing help; another 22% indicated that they wouldn’t have a conversation at all. However, it’s important to talk about financial difficulties as soon as possible, because challenges increase with age, said Kate Dorman, Seattle-based financial therapist with Sound Financial Therapy, LLC. Even discussing financial problems at age 70 is easier than at age 80. ”This is a difficult topic triggering a lifetime of emotions tied to money,” Agnew said. Here are more tips for discussing money troubles with senior parents.
Check in With Yourself
Before embarking, ensure you understand your own financial fears around your parents’ lack of money, Dorman suggested. Are you projecting a fear of not having enough yourself—or are you worried about Mom and Dad moving in? At a certain point, if your parents refuse to discuss money, or make a series of devastating financial decisions, you may need to set your own boundaries around how much you can help physically, emotionally, or financially.
Start Small
Don’t expect that any money-centered conversations will be one and done, Dorman said, but starting a rhythm of discussion is key. Expect that some topics will be left unaddressed, questions unanswered, and tasks undone. “Say that you know the conversation will come up again, and maybe even suggest a biweekly night to chat with your parents about money in a broader sense,” Dorman said.
Consider Communication Style
You know your parents best, Dorman pointed out. “Consider how that conversation might be most comfortable for them, which might mean including siblings or not, having a one-on-one conversation with one parent, having a more casual conversation over dinner or a drink, or privately in the home,” she said. “Even little things can be helpful to pay attention to, such as having a conversation in the morning when well rested.”
Talk to Siblings
“Talk to your siblings about any past hot topics to avoid, so you can keep the conversation focused on the present and the future,” Agnew said. Then discuss family financial woes in the open, and come up with a supportive plan everyone can agree on. Otherwise, concerns around parental finances and care may filter into the undercurrent of family events and come off as mistrust or secrecy. “Remember when you were little and your parents would get mad when you and your sibling were plotting with whispers in the corner? They still don’t like that,” Agnew said.
Don’t Assume
Come into the conversation with significant reserves of curiosity, Dorman suggested. You may have observed or noticed concerning signs of financial trouble, but try not to assume you know exactly what’s going on. Communicate that you’re seeking a better and deeper understanding of what’s going on in their lives. For example, selling items may indicate that a parent’s checking account is low—or that they’re just trying to declutter before they die so the family won’t be burdened with the task.
Open Up About Your Finances
“Asking for advice is a form of flattery,” Dorman said. For example, mention that you’ve been thinking about buying a home or saving for retirement, and ask what they wish they’d known about buying a house or saving. “Begin talking about money in a way that acknowledges that you can benefit from their knowledge, even if your parents are going through financial hardships.”
Normalize Problems
Try to avoid shaming or blaming around potentially embarrassing issues such as credit card debt or falling for a phone scam, Dorman said. Note that your parents wouldn’t be the first people to fall for a scam, and how scam artists always improve tactics after word gets out. To bring up the topic subtly, “you can mention that you saw something about a new scam on the news or know someone who was recently scammed,” she said.
Express Concern
“People are more receptive when someone expresses concern versus making an accusation,” Dorman said. Sensitivity is required. Parents may avoid money conversations with adult children if they are embarrassed about not having enough money to live on or leave an inheritance to their children or grandchildren, or if they are feeling that autonomy is slipping away with age, Agnew said. Loss of another aspect of control—regarding finances—can be difficult.
Seek Help From a Professional
If discussions become emotionally heated despite your best efforts, consider finding a professional to ease the conversations. Agnew suggested a trained financial therapist, advisor, or family therapist with the Financial Therapy Association. “Sometimes this can be the easiest way, with the elements of a non-biased mediator, expected topics of discussion, and a neutral location working in the favor of all involved,” she said. Express your own vulnerability, Agnew suggested. Say something like, “Money conversations are really hard for me, but I want to make sure that I’m there for you and that we are asking all the right questions. Why don’t we try a meeting or two with a financial coach to make sure we are all on the right track? It would help me a lot if we could do this together.” Depending on the situation, you may need to speak with a debt counselor, said Christensen. In extreme situations, bankruptcy could be the only option left—which is why it’s important to chat sooner rather than later. Framing the conversation to signal a collaborative versus a restrictive relationship with a financial professional can help, Agnew said. A financial professional’s ability to take administrative hassles off their plate may also intrigue, she noted—“especially with so many platforms requiring online use for efficient cash, investment, and bill pay management, which aren’t always geared toward ease of use for elderly clients.” A fiduciary can help answer questions, too. “The important thing is that our clients are turning to qualified fiduciary professionals to make educated decisions. At any stage of life, it is invaluable to have such a professional to rely on.” Want to read more content like this? Sign up for The Balance’s newsletter for daily insights, analysis, and financial tips, all delivered straight to your inbox every morning!
