For many people money is a private topic, but understanding your parents’ financial resources is important as you think about their long-term care. And, it’s important to remember that asking about your parents’ finances may feel like an invasion of privacy.
“When you start asking people to talk about their financial accounts, you have to work your way into it,” says Michelle Ash, a certified financial planner in Jacksonville, Florida, and chartered advisor in senior living.
Follow these suggestions from Ash to have productive conversations about your parents’ financial resources and wishes as they age.
“The oldest generations tend to be very, very private about finances,” Ash says. “Baby boomers are more open, generally speaking.”
Acknowledge that your parents’ generational and cultural viewpoints on discussing money could be different from yours. Being aware of their perspective is a good first step.
If you have siblings, consider whether one of you might be better suited to talk to your parents about their finances. Sometimes, parents are more comfortable speaking to the eldest child or to a child that they may perceive to be better at financial management.
Make your intentions clear. Let your parents know you want to talk about finances because you’re worried about their health or you want to plan for the future.
“You can say: ‘My hope is we won’t need to use this information for a long time, but if you need help as you age, we want to be able to respect your wishes,’” Ash explains.
Having a financial discussion that includes your loved ones’ financial accounts, documents, goals and end-of-life wishes is important. It will help you make decisions with peace of mind and will also help protect your loved ones’ assets.
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“Most people are far more interested to speak about what’s important to them and how they’re going to be cared for first,” Ash says.
Ask about their experiences with caring for their own aging parents. Do they envision a similar situation?
This is the time to discuss your aging parents’ health and family health history. If they eventually need help managing activities of daily living or their health needs, what form ideally would that help take? Have they had experiences with senior living communities? What are their impressions?
Once you know your parents’ long-term wishes, research elder care costs. If they want to remain in their homes, look at home care costs together. If assisted living is an option, check out assisted living costs in their state. Are they experiencing some memory loss? If so, you’ll want to look at memory care costs with your parents.
Now that you know the type of and cost of care your parents want as they age, it’s time to look into what financial resources they have.
“If you’ve started by talking about what’s important, it may be relatively easy to transition into asking your parents about their finances,” Ash notes.
You may want to ask these questions:
Investigating ways to offset elder care costs and low-income assisted living options before they’re needed could offer peace of mind to aging parents and their families. For instance, if your parent is a veteran, learn about VA benefits for long-term care. If they own their home, a reverse mortgage may provide needed funds. Sometimes, life insurance can be used to free up cash for long-term care.
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Some people’s goal is to spend their last dollar on their deathbed, Ash says. If they have unforeseen long-term care expenses, they may reason they’ll go on Medicaid or move in with their children. But, the vast majority want to provide for long-term care costs if they can, and they don’t want to be a burden on family.
If that’s your parents’ expectation, however, finding out now can help you prepare.
“Of 300 client families, I’ve only had one say they want to go with ‘the Medicaid plan’ or move in with their kids,” Ash notes.
Not making financial plans for long-term care needs is the most common mistake people make, Ash explains.
“Everyone needs to have a strategy,” she says. “We’re all aging — scientists haven’t yet figured out a way for us to live forever. Many, many people need help. Not everyone needs a solution that is top of the line, but it’s far better to have a partial solution than no solution.”
Some elderly parents may have thought about their future and finances a lot. Others may be in denial that they need to consider their future and finances at all. You won’t know unless you begin discussing what’s important to your parents, along with the financial assets available to help them.
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