Failing to talk about money matters with your parents could put you in a difficult position when it's time to take over their financial decisions.
The discussions have their challenges, from thinking it's a taboo topic to trying to avoid it because it makes it look like you're asking, "Will I get my share when you die?"
Using these six tips from financial advisors, you may be able to ease into talking dollars and cents with your parents.
1. Make it part of the news
You may find your parents watching CNN, Fox News, MSNBC and other news channels more in retirement and hearing reports or seeing updates across the ticker about the stock market, health care, and investment topics. Through the course of a normal conversation about the news, express that you want to make sure they have updated their estate plans based on new laws, for example. Or you can clip out articles, like they may have done for you in the past. That way, it seems more of a discussion about current events that can affect them, instead of focusing just on their finances.
Why it works: "It would open the door for more conversations to have with your parents and hopefully to be able to share with them some specific information that would relate to them with their needs," says Judy Ravenna, senior vice president and private financial advisor for SunTrust Investment Services in Tampa, Fla.
2. Invite them to educate others.
Give your parents the opportunity to pass down to you and your kids their financial lessons, based on smart decisions and their mistakes. Here's one way to pose it: "Mom and dad, can you share with us your experiences in terms of what you think you did right in regard to your finances?"
Why it works: Mark Singer, a certified financial planner based in Lynn, Mass., says this approach isn't directly focused on their current financial situation. "You're just asking to open up the conversation," he says.
3. Blame your own financial advisor.
Tell your parents that you've been working with a financial planner, who is asking you questions about your own estate planning and retirement plans. So that has prompted you to ask your parents if they are working with someone and how they've addressed the same questions. This also could lead to getting the name of their financial advisor (you could also ask to meet with them and your parents) and help them organize and store legal and financial documents and a list of names of professionals, such as accountants, financial planners and insurance agents. A safe deposit box is a good location.
Why it works: You can help make that connection that their plans will impact you. "As a part of that process, I would encourage the child to say, because all of this would affect me, I would like to be a part of this in terms of getting to know the players involved," Ravenna says.
4. Focus on their love for family.
Most parents want to continue to provide for their children and grandchildren, even after they pass away. Explain to them that without proper estate planning, some of those assets could be taxed in ways they didn't expect or be taken from the family, depending on the situation.
Why it works: "They've taken such pride in accumulating that asset base," says Singer, author of "The Changing Landscape of Retirement." "You don't need to know what they've done (in dividing their wealth). You just need to know that they've done it."
5. Keep some topics off limits.
Refrain from asking if a sibling is getting more than you, or how much you're getting. Sure, you want to know, but it's not necessary. Be aware that parents also may be embarrassed by their financial situation, or simply think that their generation needed to keep information about their bank accounts private. Knowing this – and even asking if that is the case – may help you couch your comments or questions.
Why it works: This should be obvious, but it reduces the appearance of you being self-centered, but more concerned about them.
6. Keep them in control.
Your parents may be concerned about relinquishing their control. Talk to your parents about how you want to make sure they are continuing along the financial roadmap they have created and how you want their wealth to be distributed in the correct way.
Why it works: You are assuring them you will carry out their desires after they die. "They certainly wouldn't want a non-family member making those decisions for them," Ravenna says.
Financial talks with your aging parents don't need to be a one-time, emotional affair. Instead, they can be ongoing conversations that help preserve their wealth and show your love for them during the final years of their lives.