Talking to your parents about their money isn’t easy. But many adult children find themselves suddenly in over their heads as the de facto family finance expert after an emergency. Having a conversation about finances before it’s a crisis can save a lot of trouble. And with a whole generation of parents entering old age and life expectancies on the rise, it’s a situation that’s becoming increasingly common.
This episode, Amy D’Aprix, also known as Dr. Amy, is our guest. She’s an author, speaker and consultant for the Scotiabank Women Initiative. She’ll give us practical tips on how to have that dreaded money conversation with our parents regardless of your age.
Click here for the transcript.
Stephen Meurice: What do you usually talk to your parents about? Maybe something your aunt posted on Facebook? The royal family? If the Jays did enough this off season? How about money? Their money. No thank you, right?
Amy D’Aprix: I think what's interesting is money has so much attached to it emotionally.
SM: That’s Amy D’Aprix. She’s our guest this episode. She knows talking to a parent about their money isn’t easy. But increasingly, it’s necessary.
AD: Oftentimes, people end up in crises because they haven't had these conversations.
SM: Maybe there’s a medical emergency or death in the family and suddenly an adult child finds themselves scrambling to help with a parent’s finances. And with a large wave of those parents entering old age and life expectancies on the rise – it's a situation that’s becoming more and more common.
AD: And it could have been prevented by having what I call essential conversations and certainly these conversations fall in that.
SM: Amy D’Aprix, also known as Dr. Amy, is an author, speaker and expert on issues related to retirement, caregiving, and family dynamics. She is also a consultant for Scotiabank and the Scotiabank Women Initiative. This episode she’s here to give us some tips on how to have that dreaded money conversation with our parents regardless of your age. She’s even got a checklist of what to talk about and how to do it. I’m Stephen Meurice, and this is Perspectives.
Amy, thank you so much for joining us today.
AD: It's my pleasure.
SM: So, we're going to talk about talking to your parents about money. Could you maybe start by telling us why we need to be talking about that? Why is this an issue now as opposed to 20 years ago? Or maybe it was then, too?
AD: I was going to say it's probably always been an issue, but we're more aware of it now, partly because we have the baby boomers aging. So, we have this huge wave of people entering, or in, their later years. And so, if you look at what's happening with the sandwich generation, they're both dealing with issues around their kids and then also having to think about their parents. I have to be honest with you, almost never a day goes by now that someone doesn't talk to me about an issue related to their aging parent, because so many people are engaged in this at the moment.
SM: Yes, I've certainly experienced that myself, including the whole sandwich generation thing. And dealt with the challenges around talking to an aging parent. Increasingly, lots of people suffering from dementia and all those things, which just makes it all the more important to talk about it sooner, I guess, rather than later. Is there a time that you should start talking to your parents about that? What are the problems that you're trying to avoid or the situations that might arise that you're trying to avoid by having these conversations?
AD: Well, now is a great time is always what I say to people. Prevention is the goal and you just said it. You know, we want to be clear that most people age without ending up having dementia. But even if your parent never ends up with an issue around memory loss or dementia, there's still things that you want to talk to them about. And the goal here is that we want to avoid unpleasant situations in the future, maybe even crises. And that's the key. Oftentimes, people end up in crises because they haven't had these conversations. And then from the adult-child perspective, it's great to have these conversations to figure out what your role is in all of this. Are you going to contribute somewhat financially as well as contribute care, or is your parent able to manage all of that on their own? And unless you have the conversations, you never really find this information out until, again, you're in the midst of, potentially, a crisis.
SM: And what kind of crises are you talking about?
AD: Well, let's think about a situation where your parent has mobility issues and you're watching them age and you're seeing the changes in their mobility. They're living in a house, maybe with three flights of stairs. And then you start to see, again, a little concern as you're visiting. But then you get a call that maybe your mom's fallen and she's broken her hip. So now you're in a situation of, what's the care plan? We haven't talked about it. What are the finances? Do you even know what's available? Let's say your mom's been proactive and she's thought about a place that she'd like to go if she ever needed care. Well, because you haven't potentially done the planning conversation, there may not be a spot for your mom there or she may not have the resources. You may find as you look at this, that your mom doesn't have the money for this. So now you're in a situation of having to decide, do you contribute towards this? Does your mom go somewhere that isn't her first choice? So, one of the things I talk about a lot, Stephen, is how do we support our parents’ choice, control and independence as they age? And that's what these money conversations are really about.
SM: So, you don't want to end up in a situation where the first conversation you're having is during or you're forced to make decisions after some kind of crisis happened. But you don't know what your parent wants or any arrangements they might have made beforehand.
AD: It's rarely the best situation when you do that. We could sit here and all I could do is tell you story after story about how I have seen that play out for people. And it could have been prevented by having what I call essential conversations, which I say is talking to the most important people about the most important things in our lives. And certainly, these conversations fall in that. But having them early and opening the door to having them on an ongoing basis. They're rarely a one and done. They're usually better done in small bites.
SM: Right. For a lot of people I would imagine having a conversation with their parents about their parent’s finances might be really difficult or uncomfortable. How do you start that talk? Particularly if your parent isn't in a precarious situation, as far as they're concerned, they're fine. How do you initiate that conversation?
AD: I'm so glad you asked this because how you approach the conversation is as important or maybe more important than what you talk about. So, I mentioned to you a second ago that I think the reason we want to do this is we want to talk to our parents about supporting their ability to continue to have independence in their own choices. So, if you start the conversation from that standpoint, you approach it by saying, you know, ‘I'd like to talk to you about something that I know can be kind of an uncomfortable conversation. You and I haven't had it before. It's about finances. But here's why I want to talk about it. Mom, dad or mom and dad, because I want to support what you want as you’re aging. And in order to do that, I need to both know what you want, but also have to figure out what we can afford as a family.’ Now, maybe what you can afford if you don't see this as a family issue. But, you know, the idea being that you can approach it that way. I think that the reason people really don't want to have money conversations with their kids are twofold. One, they're fearful that their kids are trying to take over their lives. That's a big one. I'm losing my control.
SM: Losing independence.
AD: Yeah, right. And, ‘Who are you to come in, and I'm your parent, to have this conversation.’ The other may be concerns about are you is an adult child looking for some money? These are the two major fears. So, you can address those upfront. This isn't about me needing anything. This is about me wanting to support you. And if we talk about this, I feel like I'll be better prepared to be able to help you as you move through the next stages.
SM: Right. So, it is a gradual process. Maybe you start just by saying we should talk about this at some point, even just to introduce the subject, start to get it into their heads.
AD: And I'll tell you, when I had the initial conversation with my dad about this, my dad was somebody who needed to think about things. He wasn't somebody you could burst in the door and suddenly say, ‘Hey, let's talk about this.’ So, I called him ahead of time. And this is also a good strategy. And my mom had had a massive stroke. There were major care needs. And I said, ‘Dad, you know, I'm thinking maybe it would be helpful if you and I had an opportunity to talk about your finances so we can figure out the best care for mom. When would be a good time for you if we did that?’ So, we set it up around his schedule and, you know, on the phone he was kind of well, I could hear a little hesitancy. But, you know, when I got there, Stephen, he had it all typed up. We sat and had a good conversation. Something we never talked about. So, it really does work. I've taught people to do this for the last 30 plus years, and some of it is really giving people a little bit of advance notice and then reassuring right up front, ‘This is why we're having the conversation, and it's for me to support what you want.’
SM: Right. I imagine lots of people don't have as easy of a go with their parent as it sounds like you had with your dad. He came up with the checklist. Do you have a checklist? What are the things that you suggest people should be talking to their parents about?
AD: Right. And I'll tell you, he had the checklist of his finances, but not all the things I'm going to mention right here, which are key. So, one of the things you want to talk to your parents about, now, I'm framing this from the standpoint things are going well, which obviously is the ideal time to have the conversation. When everybody's healthy and things are going well. We don't always get the privilege of having them then, but let's talk about it from that standpoint. You want to check with your parents about things like their will and powers of attorney. So do your parents have those? You know, powers of attorney, both for personal care and property? So, if they don't have those in place, there are great resources. Scotiabank has great resources and professionals who can help put that together for them. But absolutely, they want to have that in place, and someone needs to know where those are. That's key, too. [laughs] We could tell lots of stories of people having a will and nobody can find it. The next part is almost a lead in from the first. Who are the professionals they work with? Do they have a lawyer? Do they have a financial planner? And if they do, are they open to you meeting them? Now, again, you could probably see where there could be some resistance here, but this is why you want to meet them when things are going well. Because in the future, if your parents ever do need help, likely you're going to be the one interfacing with those professionals. So, the best time to meet them is when things are going well. And that's what you tell your parents, ‘I just want to meet the people that you rely on because if ever you need support, they're the ones I'm going to be talking with. And it would be so much better if we knew each other now. And I'm not making a cold call when there's a problem.’ So that's another thing. And most parents are open to this. But your parents might be younger and you're having these conversations. So, you could be listening to this and you’re in your twenties or thirties and your parents are maybe only in their fifties. You can still start these money conversations. You can stage them. So, you may not be asking your parents about their later life plans, but how about their retirement? What are they thinking of? How have they thought about that stage of their life and how have they prepared for that? Those opening conversations can be really useful in just getting this started. And I'll tell you, one of the best things to do is have mutual conversations. So sometimes we think we're going to talk to parents about their money. But you can do it and say, ‘You know, I want to talk to you about your will and powers of attorney and share with you what I've done or what I'm thinking about doing.’ Then it's less of an interview and more of a conversation.
SM: Right. So, it's especially odd because most of your life you think while they're the grown-ups, they have it all figured out. So it’s a sudden, kind of awkward shift of dynamics.
AD: Yeah, I think what's interesting is money, as we've talked about, has so much attached to it emotionally, right? Often we have embarrassment and guilt around money. And that's true for our parents, too. So, I think, remember, that your parents may be in great shape or they may not be. You don't know that until you have the conversation, but they may also be embarrassed by their financial situation. So, in that approach, if you can set it up in a way that doesn't put your parents to have to have it all figured out already and say, ‘You know, mom and dad. I know for me, money is something I'm always still learning about. I'm guessing that goes on for our whole lives. And I don't know what kind of situation you're in and whatever it is, is okay. I just want to have the conversation so we can figure out how to make sure you have what you want for the rest of your life.’
SM: Right. And if you do that early enough, then maybe you can help them get to a point where they're better prepared for it.
AD: That's right.
SM: And are there even sort of the small day-to-day things in terms of, you know, at some point you need to take over their bank accounts? Do you need to run their day-to-day finances as opposed to that longer term planning?
AD: Yeah, that's absolutely as you look at the roles that you might have with your parents as they age, you just hit the first one people often get into, right, is helping out. And can be a little things, right? Helping out with the bank accounts. It may even be helping your parents make sure that they have the money in the right place, making sure that bills are paid. Now, over time, your role could change. Oftentimes, adult kids end up in a sounding board situation with their parents, you know, as they age around money or let's say that your parents, one passes and the one who passes is the one who manages the money. The parent who is still alive may need you to step in more. Now doesn't mean you necessarily have to take everything over. You may end up in a role of kind of a coach and helping them take over that. But they may need some support as they do that. So those are some of the key roles. Obviously, if your power of attorney, your role may change over time, but even if you're not, you still will likely at some point have some role with your parent around their finances. So just understanding the lay of the land is helpful.
SM: So, a person might not be a financial expert themselves. They might have some trepidation about taking on these kinds of responsibilities. How do they deal with that? What are they offering to do if they don't have the sort of expertise that they might feel like they need?
AD: Well, I think in the beginning, the conversations are really just exploratory, ‘Where are documents? What is it you're thinking about? Can you tell me if you have a will and powers of attorney, who are your advisors?’ It’s almost that sort of information that obviously requires no financial expertise at all. And most of us who are working with our parents don't have financial expertise. That's where we rely on the financial professionals for that. However, you can still learn all of these things and together with your parents, if there are gaps in your knowledge or in figuring out, ‘Do they actually have enough for what they want?’ That's when I would really recommend you bring in a financial professional to have those conversations together.
SM: And at the risk of opening a can of worms, if there are multiple siblings who might have different views about what the parents should do or who should be responsible…
AD: Yes, this could be three more podcasts, but well, the quick answer to this one is that if you have siblings, this is so dependent on your family culture on how you manage this. Oftentimes there is one person in the family who has the relationship with a parent where it's easiest to have these conversations. That doesn't mean the other siblings need to be kept out. But you may decide as a family, ‘Okay, let us talk about some things.’ And then maybe one of you talks to your parents, maybe all of you, but you want to think about what it will feel like, let's say you have three kids in the family, if three of you come walking into your parent's living room to have this conversation versus one of you. But you want to make sure that your sibling group at least is kept in the loop. Because I can tell you that's when you get into problems later. You know, things blow up a lot at that point if siblings find out decisions have been made and they haven't been part of it and, you know, everybody in their fifties or sixties says, ‘I always knew Mom loved you best.’ And it comes out in these ways. So that's what you want to avoid.
SM: [laughs] Right. And we talked a little bit about that sandwich generation. In fact, we're going to have you on for a future episode to discuss how to talk to our kids about money. Do you find a lot of people in that situation now where they're trying to do both, where they're trying to bring up their kids but also help their parents?
AD: Absolutely. You know, the sandwich generation is real. Sometimes people end up sandwiched between even more than two. You know, they call it a club sandwich, when that happens. [laughs] None of us wants that type of club sandwich.
SM: [laughs] Yeah, I haven’t heard that one.
AD: Yeah. So, you know, you can end up caring for not just multiple generations, but multiple people in generations. And so, this is why it's really important to step back as a caregiver. I'm using caregiver as also parent in this case and say, ‘What are the key things we need to look at?’ And money with aging parents is one of them. And, you know, again, I mentioned about your roles with your parent. One of them may be starting to go to meetings with your parents too with their advisors. That's another area that adult kids often get into.
SM: Right, as you say, it's all the more and more important for the person in the middle of the sandwich to understand what's going on with their parents, because they might end up having to take on some financial responsibilities that they have to be prepared for as well.
AD: That's right. And rarely are adult kids prepared for that. And again, the approach matters so much. You know, how you go into these conversations. And if you can just think small, bite-sized and this is going to be a series of conversations over time and acknowledging that this can be uncomfortable. Those are all ways that can really ease some of the discomfort and beginning these conversations and having them long-term.
SM: Right. If you want to suggest to your parent that maybe you come along with them as they're talking to their financial advisor, that is maybe especially tricky or sensitive. They feel like you're really getting into the innards of their business. How do you go about making the case for you being that directly involved?
AD: Well, you don't have to go to the meetings to actually be part of the financial or the legal meeting. It actually can be a meet and greet. So you can actually set the meeting up to be, ‘I just want to get to know your financial advisor, your lawyer, so that when things happen in the future, we have a little bit of a relationship.’ That way your parent will probably be more relaxed about it and then they can determine whether they want to include you in any of the actual information that gets shared. And of course, you'd set it up with the advisor ahead of time that this is what it's for. And I can guarantee you every advisor will be thrilled about that because they want to have that relationship too. It's much easier on everyone when something happens and people need to suddenly work together.
SM: So let's flip this around a little bit. Let's say we're not far from being aging parents ourselves, and I'm just asking for a friend on this one.
SM: What should we be doing? Should the parents be initiating the conversation themselves?
AD: Absolutely. If you're listening to this and you have adult children, start those conversations as soon as you can. And again, you decide how much you want to share. But there are basic things you can share about. Things like, ‘Yes, I have a will. Yes, I have powers of attorney. Here's where they are. Here’s who my advisors are.’ Perhaps knowing where accounts are so that people don't have to go hunting for them. You know, one of the hard parts today, Stephen, is we all do online banking, which means where are your passwords? How does name but even find where your money is? So, yes, if you start talking to your adult kids early and you can frame it the reverse of what I said, ‘I'd love for you to know this so that you can support my independence and my choices as I age.’
SM: Amy, I really appreciate it. It's been very interesting. Thank you so much for joining us today and looking forward to having you back again soon.
AD: My pleasure. Thanks, Stephen.
SM: I’ve been speaking with Amy D’Aprix, author, speaker and expert on issues related to retirement, caregiving and family dynamics. She’s also a consultant for Scotiabank and the Scotiabank Women Initiative.
As you heard she’ll be back in a couple weeks, to talk about how to start a conversation with your kids or young people in your life about money. So stay tuned for that.
In the meantime, we recorded an episode not long ago called “Estate Planning 101.” That includes more detail about power of attorney, wills, and lot of the topics we touched on in this episode. You can find that in our podcast feed, and we’ll also link to that in the episode description.
The Perspectives Podcast is made by me, Stephen Meurice, Armina Ligaya and our producer Andrew Norton. Who will not include me in the meetings he has with his financial advisor because I’m quote, ‘not his son.’