It’s a conversation loaded with potential tension around concerns about independence, money, responsibility, and mortality.
While the “birds and the bees” chat may be awkward for many parents, a different discussion often ranks high on the dreaded list for adult children: money matters with their aging parents.
It’s a conversation fraught with potential tension, in which people examine around concerns about independence, money, responsibility, and mortality.
Despite the discomfort, experts urge families to prioritize this conversation. Having an open and honest discussion, or more likely a series of discussions, about finances before a crisis hits can prevent confusion, resentment, and unnecessary stress down the line. It empowers everyone involved to make informed decisions and plan, ensuring security and peace of mind for everyone.
Why is the conversation so important?
It’s not easy for adult children to initiate conversations with their parents about long-term care, estate plans and the like. For starters, money can be hard to talk about.
“Money is still a taboo topic, even with families,” said Lazetta Rainey Braxton, co-chief executive of 2050 Wealth Partners, in a recent interview. “We’re talking about an adult child approaching a parent, which is usually kind of reverse parenting. It may feel a little bit uncomfortable if you’re starting the reverse parenting conversation with something as serious as ‘we need to be prepared for you to die.'”
Indeed, family meetings can be delicate because both parents and children are forced to confront mortality. And this can cause discomfort on both sides.
“It’s a difficult conversation,” Kristy Archuleta, a financial therapy and financial planning professor at the University of Georgia, said in a recent interview. “Maybe (the parents) don’t want the children to know what the actual plans are because when we start thinking about those plans, whether it’s from the parent’s or children’s side, it really makes end-of-life things more real. And we don’t want to think about those things. It’s not a happy conversation.”
Not a happy conversation, but a vital one. These conversations, said Archuleta, are critical to honor parents’ wishes, to avoid conflicts between siblings, and prevent long-term generational rifts and misunderstandings. “It’s important to have the conversation because it can have a huge impact that lasts generations,” she said.
Consider, she said, a worst-case situation where parents devise a plan but fail to share it with their children. This might lead to uneven estate distribution, with one child receiving everything while others get nothing.
Or, one child, deemed more responsible, might bear all the burden, causing disagreements among siblings. “The other children don’t like the decisions that one child is making,” Archuleta said. “Those kids stop talking to each other. We see it over and over and over again where that ends the relationship.”
Archuleta said most parents don’t intend to sever ties between their children, where “children no longer have a relationship with one another.” But not holding a family meeting can lead to the worst-case scenario, where future generations remain disconnected and hold the belief that discussing financial matters can ruin family relationships. As Archuleta notes, this lack of communication can create a “significant void within the family.”
These money conversations are especially crucial for Generation X, said Preston Cherry, the founder and president of Concurrent Financial Planning, and an assistant professor of finance at the University of Wisconsin – Green Bay.
“Gen X is an underserved population right now,” he said. “The media tends to focus on Gen Z, millennials and baby boomers, but they’re skipping over Gen X. It’s a huge population with the most money currently, dealing with wealth transfer and the sandwich generation pressures.”
Getting siblings on the same page
Before adult children ask for a family meeting with their parents, they need a game plan. First, align their thoughts and objectives. Archuleta said adult children need to discuss and agree upon their goals, what topics are open for discussion, and what should be avoided. They need a game plan.
This preparation is far from simple, as the subjects to cover are diverse and complex. They may include, for instance, long-term care, estate planning, retirement finances, housing options, and healthcare planning. What’s more, these topics demand a substantial level of knowledge for a productive conversation – knowledge that adult children may not necessarily have.
Given that, it may be helpful to have an individual who can explain the fundamentals of estate planning, financial planning and the like.
Archuleta said involving a neutral third party, such as a financial planner, counselor, or therapist, can be beneficial in family discussions about finances. This is particularly useful if the family struggles with difficult conversations, or if they don’t have subject matter expertise.
Such professionals can mediate, offer guidance, and advise on essential legal and financial matters. This person can also facilitate connections with essential professionals, ensuring that the parents’ financial strategies align with their intentions.
Adams also emphasizes the significance of this aspect, pointing out the necessity for parents to understand the distinct roles played by members of a professional’s team. Additionally, parents should be informed about the appropriate occasions for reaching out to these professionals.
Experts suggest that understanding these details helps parents make smart choices and connect with the right professionals when they need to. This makes it easier for their financial and estate plans to match their long-term goals.
Involving a mediator in facilitating family meetings can significantly mitigate feelings of suspicion or defensiveness. A mediator serves as an impartial third party, devoid of personal investment in the meeting’s outcome.
Having a mediator, said Sandy Adams, a certified financial planner at the Center for Financial Planning, “allows for family to all be on the same side and the facilitator to be the ‘outsider.'” What’s more, the facilitator can be the one asking the hard questions, getting the conversation moving, when and if needed.
Broaching the subject
To effectively approach the topic of future planning with aging parents, experts said adult children should suggest a family meeting and approach the subject with tact, empathy, and thoughtfulness. It’s crucial to maintain a respectful and nonjudgmental tone to foster open and understanding communication. “It’s not meant to be confrontational,” said Archuleta. “We’re not going to be blaming or shaming anyone for what they have, or they haven’t done.”
Of course, she noted, this is much easier said than done. Often, the emotions entangled in family relationships make things constructive or difficult. “Family dynamics can really complicate these discussions,” Archuleta added.
Read: A major risk facing older Americans: the need for long-term care
Start early and have ongoing talks
It’s better to start the family meeting process earlier rather than later in a parent’s lifetime.
Among other reasons, it allows time to:
— gather information;
— get things in order (i.e. simplify financial accounts – account holding locations and registrations, etc.);
— get things documented while all parties still remember all the details and can pass on the information; and
— update documents, if needed (i.e. estate planning documents).
Ideally, it’s good to hold a series of family meetings over time. Ongoing talks allow for wishes to evolve, give plenty of time to cover multiple topics and make it easier to talk about heavy subjects.
“Preparing future generations for inheritance has been important for many older adults,” Adams said. “Wishes change over lifetimes, especially in recent years when many older adults have preferred to gift during their lifetime to ‘see’ their heirs benefit now from the gifts when they need them versus having to wait until after their deaths later to receive inheritance dollars. It is important to make sure to balance the desires to gift with the potential need for long term care needs by the older adult.”
During the meeting
The meeting should be organized and purposeful.
Set a clear goal: The main goal should be to allow parents the chance to openly share their plans, reducing any guesswork or assumptions, Archuleta said. Children might also inquire about their parents’ expectations for the meeting.
Sharing relatable stories: Setting the right tone for family discussions about future planning is crucial, said Adams.
An effective strategy can be sharing stories about others’ experiences. “If there is difficulty starting the conversation, sometimes a story about a friend or someone you know whose parents communicated well and their plan went smoothly, or they never communicated and there was chaos because of that can be a motivator,” she said.
Promote interactive discussions: Instead of a one-sided dialogue, conversations should encompass a range of two-way discussions that cover a range of topics, including future living arrangements, care needs, and discussions about values, legacy, financial, legal, and long-term-care planning.
During the meeting, Archuleta advises adult children to express their feelings and concerns using “I feel” statements, ensuring that the meeting remains a two-way conversation.
Respect parents’ wishes: Adult children should genuinely express their desire to understand and support their parents’ independence and future plans.
