Talking about finances with your parents can leave you feeling extremely uncomfortable. However, as your parents age, it is important to know what their plans are and have your own plans in place should they suddenly be unable to take care of themselves and their finances. By having these conversations now, you can avoid potentially awkward or tense situations with other family members, along with the confusion and headaches from trying to pull together all of their financial information. Follow these tips to make sure you’re not hit with any financial surprises down the road.

Step #1: Start the Conversation

If you never try to talk to your parents about their finances and estate planning, you will never become comfortable talking to them about money and will be disadvantaged later on as you’re trying to piece things together. This can be a sensitive topic, so try to find a time where everyone is relaxed and not rushing to be somewhere else. If you have siblings, make sure you’re including them in the conversation so that everyone is on the same page. Take things slowly and remember that it may take several conversations to get them to open up and to document all the information you need. Remember to also bring something to take notes on. You don’t want to leave this important information up to your memory or that of your siblings. Share these notes with your family so they have the correct information and know the next steps to take.

Step #2: Make an Inventory of Documents

As you’re working with your parents, make a checklist of all the documents you will need to locate and all the login information for websites that may house those documents. Make sure you have copies of these and keep them in a place that you and your parents will remember where they are. Review these regularly in case any changes need to be made.

Step #3: Consider a POA

Whether or not your parents are showing signs of cognitive decline or are still fully healthy, it’s a good idea to open up the conversation of whether or not they want a POA (Power of Attorney) to handle their affairs. This is also a great time to determine if they want a family member in that role or a trusted family friend, etc. Learn more about POAs here: How2 Set Up a Power of Attorney - Availa Bank.

Step #4: Communicate

At every step of the conversations you will have with your parents about finances, make sure you document and communicate everything you are doing or have been asked to do. This way, there’s less chance of others getting upset over miscommunicated tasks, less chance of mistakes being made and your parents’ financial information will be more secure.

Step #5: Know the Signs of Decline

Once you have all the information documented, organized, and plans in place should anything happen, it’s important to keep an eye on your parents’ health. Watch for signs of decline, including unusual purchases, piles of unopened mail, physical setbacks, constant complaints about money, and memory problems. This is the prime time when scammers swoop in to take advantage of older Americans. You’ll want to make sure your parents know you’re there to help and that they can talk to you about any strange calls or issues they may be having. It may feel weird at first to have your parents asking you for help, but having an open and honest line of communication with them will help avoid heartbreak in the future.

The Bottom Line

It’s never easy to talk to your parents about money, but it’s worth it in the end! By planning ahead now, you’ll save yourself from the stress and pain of trying to figure out your parents’ finances once something bad has happened. Reassure your parents that you’re not trying to take over their decision making and finances, you just want to make sure they’re taken care of. If you ever need to make any changes to your account or your parents’, know that you can always speak to your local Availa banker for help today!