Most of us would rather have "the sex talk" with our kids than talk to our own parents about their finances. Talking about money can feel awkward, prying, and uncomfortable. But “the money talk” is a conversation every adult needs to have with their parents. And the sooner the better, says Cameron Huddleston. She’s an award-winning journalist with nearly two decades of experience writing about personal finance and author of the book, Mom and Dad, We Need to Talk: How to Have Essential Conversations with Your Parents About Their Finances. Cameron joins us to share advice on how to get the conversation started with your parents, even if they – and your siblings – are reluctant to talk about it. She shares the documents and information you’ll need in order to plan for a future that will keep the headaches and heartaches of estate planning to a minimum.
Listen to this episode to learn:
For more information, visit www.cameronhuddleston.com.
Talking to your parents about their finances
Intro: Welcome to the Equal Parts podcast, brought to you by Care@Work.
Emily Paisner: Being a working parent is hard, but talking to your parents about their finances can be one of the hardest conversations you can have. Today's guest is here to help with that. Cameron Huddleston is an award-winning journalist with nearly two decades of experience writing about personal finance. She's also a mom of three and author of Mom and Dad, We Need to Talk, How to Have Essential Conversations with Your Parents About Their Finances. Trust me. I get it. You're super busy caring for the kids, working nonstop and a million other things, but as I learned from Cameron, the sooner you have the money talk with your parents, the better.
In this episode, she shares great advice on how to get the conversation started, the essential documents and information you'll need, how to plan for your parents' long-term care, and lots more. Have a listen. Cameron, thank you so much for being here today. We were supposed to meet in person back in March, but as we all know, plans had to change.
Cameron Huddleston: Of course, I'm really excited to be here today.
Emily: Cameron, at the start of your book, you cited a Care.com survey from a few years ago that said, "Most of us would rather have the sex talk with our own kids than talk to our parents about money." That's saying quite a lot, [chuckles] What's holding us back from having these conversations?
Cameron: Well, these conversations seem really awkward to a lot of people just like that birds and the bees talk that you have with your kids, or the one you remember having with your parents when you were younger. I hear people saying it to me all the time. The idea of talking to their parents terrifies them because they feel like their parents are going to say, "This is none of your business, you don't need to know about my finances," and they don't want their parents to get angry with them. They don't want to upset their relationship. That's certainly understandable because money is such a taboo topic in America, even around the world.
I can tell you that if you don't have the conversation, and, say, mom has a stroke, and she's in the hospital, and now you've got to make sure mom's bills are getting paid. You go to the bank. You say to the person at the bank, the representative, "Hey, my mom's in the hospital, I need to make sure her bills are paid." When they say to you, "Well, are you her power of attorney?" and you say no, and they say, "Well, I'm sorry, you can't do anything. You can't write checks for your mom. You can't transfer funds for your mom." That's going to be a lot more awkward than that conversation that you should have had months or years ago, so you didn't end up in this situation in the first place.
Emily: You're one of millions of Americans who's part of the sandwich generation, as we call it. You're raising three kids, and you're caring for your mom who has Alzheimer's disease. Nothing can prepare anyone for this, even someone like you who has a lot of experience in this arena. You've admitted to having made some mistakes. What are some of the things that you wish you knew then that you know now and could share with our listeners?
Cameron: My biggest mistake was not talking to my mom about her finances before she started having memory problems. Like most people, I didn't even realize the conversation was necessary. When she did start showing signs of memory loss, I had to scramble. I had to play detective often to figure out what sort of accounts she had.
Unfortunately, I was able to get her to meet with an attorney, in the very early stages of her Alzheimer's, while she was still competent enough to sign her estate planning documents that are so important, those have to be in place and signed while you were still competent enough. If you wait until a parent has had that stroke and is in the hospital or has the Alzheimer's diagnosis and is really having a lot of trouble remembering things, at that point you might not be able to become your parent's power of attorney. You might not be able to be named their healthcare proxy, because the parent won't be competent enough to sign those documents. Then you have to go to court, and essentially put your parent on trial.
I feel like this is the one thing I did do right is get my mom in to meet with an attorney fast enough, but, boy, I wish I had had conversations with her about her finances before she was having problems, because it would have made things a lot easier for both of us once she did start having trouble remembering things.
Emily: What are the steps that you would recommend for people to take to not make the same mistakes that you did?
Cameron: I would say start by talking to your parents when they are relatively young and healthy. If you're in your twenties, it's not too early to have this conversation. In fact, you are in a great position when you're just starting out, because you can go to your parents and ask them for advice about your finances. I know this might sound counterproductive, but you're doing this to get insight into what sort of financial planning they've done.
"Hey, mom and dad, I just started a new job. My employer offers a retirement account that I can contribute to. Should I do this?" If your parents say, "Well, we have a pension, we never had to worry about that," keep the conversation going. "Well, what do you think I should do? What else have you done to plan for your retirement?" It's a very natural way to start getting some insight into your parents' finances by asking them for advice.
Now, if you're in your thirties or in your forties already, and your parents are in their sixties and seventies, if they haven't had any health issues yet, then you're still in a really good position to have these conversations and start planning. Obviously, if they are having some issues, the conversation cannot wait. The first thing you need to do is make sure they have those legal documents. The power of attorney, which named someone to make financial decisions for you if you can't, and the advanced healthcare directive, it's also called a living will, it spills out with end of life medical treatment you do or do not want and names a healthcare proxy to make healthcare decisions for you.
Of course, it's also important to have a will. That's going to spell out who gets what when you die. Because if you die without a will, state law is going to determine who gets your assets.
If mom and dad haven't put something in writing, family could end up fighting over who gets what, so make sure that your parents have these documents, make sure you know where the documents are.
If mom and dad are reluctant to name you or another family member power of attorney, because it is handing over a lot of power to someone, just let them know, "Look, mom and dad, you can hang onto this document without the actual document. I don't really have any power. We can agree on situations when I'm allowed to access it and start acting as your power of attorney. Just tell me where it is, how I can access it and under what situations." That might put them a little bit more at ease and help persuade them to actually get these documents in place while they are still competent to sign them.
Emily: That's assuming that they're willing to engage in this conversation with you. I won't name names, but I know some parents that might not want to have this conversation with their children. They're very resistant and reluctant to have the "money talks." What do you do if your parents won't even engage in this conversation?
Cameron: If you've tried once, try again. It can take several attempts to get the conversation started, to get your parents comfortable with the idea of talking to you about a topic that they are not comfortable discussing. If you have tried several times, several different ways, talk to your siblings.
Maybe you have a sibling who has a better relationship with mom and dad who might have more luck, reach out to another family member, perhaps an aunt, an uncle, a family friend, and ask that person, "Hey, I really want to have this conversation with mom and dad. Do you think you could encourage them to talk with me, explaining to them how helpful it might be down the road if they ever need help from me to share a little bit of information about their finances." You could reach out to a clergy member. You could reach out to perhaps even the family doctor.
If your parents have an attorney, an accountant, a financial professional they work with, asking that person to encourage your parents to talk with you, to share some information, because your parents might be more willing to take that advice from a peer, as opposed to their own children who they still see sometimes as a child, that unruly teenager who is sneaking out late at night, even though you are a 40-year-old adult with a successful career as an attorney, they look at you as that kid. They don't want to be told by their child what to do.
Getting that third party involved sometimes can help get the conversation going. Another thing you could possibly do is ask your parents to write down information about their finances. They might not want to tell you anything, but they might be willing to put it in writing, put it someplace safe, and then you can agree on those situations when you would be allowed to access it.
Emily: What are some of those essential documents and information that we should be starting to gather from our parents to help when we get in that situation where we need to access it quickly and we need to help them when they can't help themselves?
Cameron: In addition to the estate planning documents that I've already discussed, it's a good idea to find out how your parents pay their bills. Do they pay them by automatic payment? Are they writing checks? If it's the latter, I would certainly encourage you to ask your parents if you can help them set up automatic bill payments and let them know, "Hey, if you do this, this is one less thing you have to worry about. You don't have to worry about late fees if you accidentally forget to pay a bill. If something happens and you can't pay your bills, because you're in the hospital, for example," you know they're going to get paid.
You also want to find out, of course, where do your parents bank, what sort of accounts they have, do they have a savings account, do they have a retirement account, what sources of income do they have, a pension, social security benefits, do they have investment property that's generating income for them.
The more details you can find out, the better, because if you do end up in a situation like I have been managing my mother's finances because of her Alzheimer's, you have to know everything. Down to your parents' social security number, down to their Medicare, Medicaid numbers. You need to know information about their health history, all the prescriptions they take. The more details you can gather, the better. Again, if they're willing to write it down, that's great, because you have it there in writing, and it reduces the risk that you're going to forget something that they've told you about.
Emily: The coronavirus has left us all with so much uncertainty. Unfortunately, the aging population is more at risk. Does this change how we approach this conversation with our parents, because there's more risk involved right now from both a public health and economic perspective? Is there more urgency now to have this conversation with our parents? What are your thoughts on that?
Cameron: I certainly think there is more urgency. I do think that this pandemic offers a great opportunity to have these conversations. This might be the silver lining to what's going on right now, because it gives you a reason to bring the topic up with your parents, and it will be very natural. You could say something like, "Mom and dad, I'm really concerned with the pandemic about you and about your health because I love you. I want to know what sort of planning you've done. What if you do get sick, what would happen? What do I need to know about your wishes? What do I need to know about making sure your bills are getting paid if you do end up in the hospital?"
I think it offers a very natural way to start the conversation. You can do it out of love, letting you know that you're looking out for your parents' best interests, and you want to be able to help them and be there for them if something does happen to them. Highlighting these concerns with your parents is really important. There are attorneys out there who are doing drive-by planning, so to speak. You can call them up, do your video conferencing to talk about your estate planning needs and do a drive-by signing of the documents with a notary there to witness it.
People are being very accommodating right now. Of course, there are documents available online, the DIY-type of documents. I would encourage people to meet with an attorney if they can afford one. If they can't, I would certainly look for documents that are available from your State Bar Association so that you know that they do comply with your state's laws. Again, I think the current pandemic makes this an ideal time to have these conversations.
Emily: What about when siblings and step-siblings are involved? How do you manage having these conversations, especially if there's someone who's being particularly difficult or stubborn?
Cameron: It's so important to talk to your siblings before you even have these conversations with your parents. I say this for a couple of different reasons. First, you don't want to go to your parents without talking to your siblings, because it might cause resentment. Your siblings might think you're going behind their backs so that you you can gain favor with mom and dad, maybe get more from them when they pass away. Certainly, you don't want to do that, you don't want to cause any sort of resentment. You also want to talk to your siblings so that you can all try to get on the same page about what roles you're going to play as your parents age, you can figure out who's going to initiate the conversation, whether it's one of you, whether it's all of you, you're going to figure out a good time to have the conversation. I know that not all siblings are going to agree about the best way to approach the conversation, about what roles each of you should be playing as your parents age.
Emily: It's funny how everyone tends to regress back to their roles as they had as kids too.
Cameron: Of course, this sibling rivalry does come up. It can make it difficult. It's so important, if you are the child who is calling this family meeting with your siblings, it's so important to remind them, "Look, we're going to have to put our differences aside because this is about mom and dad and doing what's best for them. We need to first focus on what are we going to do that's going to help them. Let's put our differences aside because that doesn't really matter right now. We're going to have to get past that." Just keep pointing that out.
Even emailing them before you even have the meeting to let them know what you want to talk about and to get those feelings out in writing so that there aren't as many emotions attached to it, it might even be better to do the whole conversation over email so that you can think out clearly what you want to say. If you're face-to-face and you know it's going to lead to a fight, then putting it down in writing might make it easier. Obviously, you need to think about what your family dynamic is like to determine how you want the discussion to go and what the best way to do it would be. I would encourage people to talk to their siblings before they talk to their parents.
If your siblings don't have a good relationship with their parents, don't really want to get involved, that's okay. I was certainly there trying to keep them updated on the conversations you've had. If you do have to get involved with your parents' finances, let them know what you're doing so that down the road they're not going to come back and say, "Hey, you never updated me on this. You pushed me out of this," and that could, of course, lead to a lot of problems.
Emily: Cameron, we've talked a lot about how to talk to your parents and your siblings about some of these topics. How can we start to teach our own kids about this stuff so that they feel prepared and comfortable having the money talk with us someday?
Cameron: I think all parents should be talking to their kids about money from the time their children are very young. Obviously, what you're going to be teaching them is going to depend on the age of the child and your own comfort level. When you've got toddlers, you introduce them to the concept of money and letting them know that you use money to pay things, you have to earn money, there is a limited supply of money, so you can't buy everything you want.
As they get older, you start talking about how you make those choices about spending, you talk about your values and where you want your money to go. Certainly, as your children reach their 20s, you should be having these conversations about what sort of planning you've done, what roles you might expect them to play as you get older, or letting them know, "Hey, we're not going to be a burden on you. We have done all this planning. We have long-term care insurance or life insurance, it's going to help cover the cost of long-term care. We have retirement savings."
Letting them know what you have done to prepare is a great idea, talking about those final wishes, so there's no question about what you want. The more open you can be with your kids about money, the better prepared they're going to be when they become adults to manage their money well and, hopefully, the better prepared they're going to be to help you if they have to as you age.
Emily: Cameron, thank you so much. That's really helpful information to, hopefully, make it easier for our kids when we are in this situation someday. I hope that our listeners were able to take away a lot of helpful information on how to have these conversations with our parents, because it is so very important.
Cameron: I certainly hope I was able to help some people.
Emily: Thank you so much.
Outro: Thanks for listening to this episode of Equal Parts. See you next time.
Emily: Wait, before you go, I just want to tell you a little bit about Care@Work by Care.com. They work with some of the world's largest companies to offer family care benefits to their employees. If you're one of the lucky ones who already has care benefits at work, use them. If you don't, ask for them. It's a real lifesaver. To learn more, visit care.com/careatwork. Again, that's care.com/careatwork.