Millennial Money: Learn your parents’ financial plans ASAP (Part 1)

If you’ve lost a parent, you’ve felt the devastating reality that everyone – including everyone’s parents – will one day pass away. Often, their children are the ones who have to handle financial responsibilities while handling their own grief. Planning in advance for the tasks that will need to be done can make that difficult time a little easier.

“We surely ought to have some idea of what we’re facing,” says Melanie Cullen, San Francisco Bay Area-based author of “Get It Together: Organize Your Records So Your Family Won’t Have To.” She continues, “On the other side of it, our parents need to know we’re interested, we care, we’re there to help.”

This week I’ll address why it’s important to have this conversation and how to bring up this topic with your parents:

Why do I have to talk with my parents about this morbid topic?

If there are not documented plans for your parents’ end-of-life finances, you may end up short on cash as a result.

If your parents become too sick to manage their finances and you haven’t been given access to their accounts in the case of incapacitation or death, you could need to pay their bills but be unable to access their money to do so. You also wouldn’t be able to use that money to pay for their funeral, which might cost thousands of dollars.

AARP family caregiving expert and St. Petersburg, Florida-based estate-planning attorney Amanda Singleton shares that many caregivers end up “digging into their own money.” This is money you can no longer save back or invest, and you may end up needing to take on debt to cover expenses for your parents.

In addition, it’s less likely that your parents’ true wishes will be fulfilled if they haven’t shared with you what those wishes are. Families may end up planning and paying for a much more extravagant funeral than the decedent would have wished for, adding completely unnecessary expense and stress.

How should I begin this conversation?

Keep sensitivity and respect in the forefront of your mind. Many people already feel uncomfortable talking about their finances, let alone talking about both that and death with their kid.

Singleton suggests tapping into experiences your parents may have already had with the funerals they have attended, with managing their own parents’ deaths, and with handling end-of-life care for loved ones. If their parent kept their will and estate planning documents up-to-date and easy to find, that may be an excellent example to follow. If their parents had finances that were messy and disorganized, remembering the stress that resulted from this might encourage them to get their finances in order.

Alternatively, Mark Schrader, a Charlotte, North Carolina-based certified financial planner and a financial planning strategist at retirement-planning organization TIAA, led with topical or personal prompts. He would bring up different planning-related topics with his mom as he learned about them in his CFP courses. If you’ve read articles or learned about end-of-life planning topics on your own or are making arrangements for yourself, talk to your parents about that topic and ask for their point of view on it.

“Make it a planning and preparation conversation,” Schrader says. “It’s not as much about the numbers or ‘how much do you have in these accounts?’ but ‘what accounts do you have, and how can I help if for some reason you couldn’t be there?’”

For help with your estate plan, contact us at Wilson and Wilson Estate Planning and Elder Law, LLC at 708 482 7090 for our main office in LaGrange, Illinois or at 847 656 8958 for our Northbrook, Illinois office.