Just like all matters that cause seniors to lose their independence, this one needs to be handled tactfully and delicately.
Having the "talk" with your elderly parent(s) seems about as awkward as the one they had with you before your teen years about sex. Everyone feels the embarrassment.
But, the earlier you initiate the conversation about your parent's investments, the better.
"It's helpful to know about money matters in case you need to harvest resources for your loved one's care.
Setting the stage
Consider where the discussion will take place. It should be a place where the senior parents feel comfortable. Find a location that signifies comfort and peace and will put them in the right mood -- their home, a park, a special restaurant or at the senior parent's attorney's office. Try not to make them feel ambushed though.
It may help to find someone the elder trusts and respects to witness the conversation. Try to uncover everything you can about your parent's investments during this time.
Ask the following questions:
- What investments do you have?
- Where are those investments held?
- Who are the contacts for the investments?
- How are the investments titled (joint accounts, individual, etc.)?
- Is there a financial adviser in the picture?
- What bank do you have your checking and savings accounts held
- What income do you have and where are they from
Assessing the situation
Speaking with your parents about financial matters while they are mentally sharp and physically healthy is ideal, but sometimes mental decline makes it necessary for you to jump in quickly and either help or take over.
Financial capacity -- the ability to manage one's financial affairs in the aging population has been studied extensively In a report for the American Society on Aging, it was reported that older adults are most vulnerable to impairment and loss of financial skills and capacity as a result of not only Alzheimer's disease and related dementias, but also through normal cognitive aging.
By the time a parent has memory loss, they've already suffered damage to their financial decision-making.
If they frequently forget that they just talked with you, or they keep retelling the same stories, those are early warning signs something is wrong. The study also revealed these warning signs of seniors struggling with financial transactions:
- Taking longer to complete everyday financial tasks.
- Showing reduced visual attention to key details in financial documents.
- Showing decline in arithmetic skills related to finances.
- Showing decreased understanding of financial documents.
- Having difficulty identifying risks in an investment opportunity.
In addition to the mail, tax returns can also be a forensic tool. Look at returns from the past few years to see if they show interest or dividend income, indicating investments your loved one might have forgotten about.
Assisting your elder
Even though your parent might forget the details of his or her investments, you must make a point to never treat them as a child.
They accumulated this wealth and successfully got to this point in their lives, for now, you should assist and not take over. The takeover will occur when it should.
This can be a good time to get your own financial house in order. Make sure to discuss your investments with your own children. If you relay to them what you care about, why you donate to charity and what you believe about money alongside information about where you've put your money and why, you'll have strengthened their ability to handle your finances when the time comes.
Be sure to read our follow-up post next week when we talk about Powers of Attorney and Health Care Directives. These are important document s to have in place in the event a parent becomes incapacitated and you need to help.
Questions? Email us at firstname.lastname@example.org