Parents, Aging and Finances

Parents, aging, and finances. Talking about aging with parents can be one of those difficult conversations we want to put off for another day. Like other difficult conversations, though, avoidance usually makes it harder.

Transitions in aging can fall into four broad categories: financial matters; health care decisions; living arrangements; and transportation. This week’s post tackles the topic of finances.

Helping Parents With Finances

The downside of the digital age is that it makes seniors more susceptible to fraud and scams. They can send or spend money anywhere, or divulge sensitive information, with one click. Without being physically present, adult children might not be as quick to catch the warning signs that a parent has become susceptible.

The most common kind of elder financial abuse occurs from people close to the parent. Sometimes it can be a new person in their lives – a girlfriend or boyfriend, a housekeeper, or a companion caregiver. Checking up on new friends and companions might not feel good, but is a necessary step.

Are parents located far away? In her article, Veronica Dagher interviews financial advisors and aging experts on how to help parents with finances from a distance.

By volunteering to help with bill paying, the person with the DPOA can begin to get acquainted with the parent’s accounts, particularly what kind of expenses are normal and which are not.

Parents: Start Early, Small and Often

Parents would be wise to communicate early with adult children. While the topic of money is taboo in many households, it will make everyone’s life easier if the parent is open and communicative. It’s helpful to know how many accounts there are, how the accounts are managed, and approximate amounts or a range of amounts in each. Describe how the transition of help with money would go in an ideal world. Other steps:

  • Provide contact information for the financial advisor, investment manager, lawyer, and accountant.
  • Arrange an annual family meeting with any or all of the above.
  • Begin conversations early with small topics first. Allow everyone involved to grow into their roles.
  • Build on that trust to expand financial duties as time goes on.

Adult Children: Start Early, Small, and Often

For the adult children, instead of anticipating one future difficult conversation, experts recommend thinking of each topic as a continuous conversation to be had over a number of months or years. Following are some pointers.

Start the conversation with curiosity.

“Mom/Dad, if you should ever reach the point where you’re unable to (balance your checkbook, drive on the interstate, feel confident about a medical decision, feel comfortable living on your own), what would you like to have happen?”

“What would be an example of something that would indicate the point at which you would like help?”

Listen intently. Even if it is not what you would like, check for understanding by repeating back what you heard. For example, “So what I hear you saying is that, if you have a fall, that’s when you’ll ask for help. Is that true?” Sometimes when we hear things back, we change our minds, or clarify.

Things To Do Now

As noted in Dagher’s article, one of the most important documents is a Durable Power of Attorney (DPOA). If a DPOA is more than a few years old, or there has been a change in health status, have it reviewed by an elder law attorney. The attorney will make sure the powers granted are up to date with current law and broad enough for the parent’s current situation.

Since so much of our financial lives are online, it’s also wise for a parent to share emails, userids, and passwords with the person named as DPOA. Ideally, all of the financial institutions where a parent has accounts would have copies of the DPOA and confirm they recognize it as valid.

By volunteering to help with bill paying, the person with the DPOA can

  • begin to get acquainted with the parent’s accounts
  • become known to the institutions where accounts are held and
  • learn what kind of expenses are normal and which are not.

Additionally, it tends to work better if just one person is named as DPOA. Then name a backup or successor in case they are unavailable. Joint DPOAs can be a headache.

DPOA Does Not Work for Health Care

While the DPOA covers financial and legal matters, it does not address health care decisions. For those, a health care proxy or Designation of Health Care Surrogate is necessary. With Covid-19, family members may not be allowed in the hospital. Should an emergency happen, the health care proxy, as well as any living will, DNR (Do Not Resuscitate), or DNH (Do Not Hospitalize) documents should be provided to paramedics and/or hospital staff.

For a free resource specifically addressing the talk about end-of-life care, see The Conversation Project, at For a primer on the 4 basic estate planning documents needed by everyone, see Part 2 of 2 – The Talk That Only Gets Tougher – 4 Documents.

Simple But Not Easy

These are difficult scenarios to think about or talk about. The most important thing to do now is begin with a single step. Whether you are the parent of adult children, or the adult child of an aging parent, it’s never too early to broach the topic. Rather than waiting until it’s too late, start while it seems too soon. That kind of talk will be a lot easier.

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Having “The Visit” At the Holidays

For many families, the holidays are one of the few times when adult kids, parents, grandkids, and grandparents get to see each other. That time together might be the best time to have a planned “Visit.” There are two common topics for the Visit: 1) finances; and 2) health and home. Today’s post will deal with finances. Next week I will have a guest post from Monica Stynchula, LCSW and CEO of ReunionCare, about health and home.

Members of the Greatest Generation are notorious for keeping quiet about money. Yet, as they reach old age, their Baby Boomer kids begin to wonder, “Do Mom and Dad have enough money to live on?” “What if they need in-home care?” “What if they need to make modifications to their home?” “Did they really need those $5000 new windows, or are they being scammed and not know it?” “If I had to pay bills for them, where do they keep their money?” “What if they have money or accounts stashed somewhere and they forget about it?”

Some parents may discourage the money topic by cutting conversations about it short. Perhaps they do not want to acknowledge their own mortality. Perhaps they are embarrassed about falling victim to a scam already. Perhaps they see all of their kids as spendthrifts who will not be responsible (regardless of their age, education, and career status). Perhaps they are afraid of having the keys to their car, or their home, taken away. And it’s not always the parents that don’t want to talk about it. Sometimes the adult kids are uncomfortable talking about their parents’ mortality, and they are the ones cutting off the communication.

Regardless, every time the topic, and its underlying emotion, is avoided, it feeds an elephant in the living room. If not acknowledged, it stays there, and gets bigger, until a crisis erupts, and everyone is forced to talk about it under duress.

How do you bring up the money topic before a crisis? Try owning your discomfort about it up front. “There’s something I am struggling with talking to you about,” might be a good beginning, for example. Then let them know what you want to talk about: “There are two main concerns that keep coming up for me, and I need your help.” However, if they still shut down, keep your cool, and ​be empathetic: “I​f I were in your shoes, I would find this hard to talk about, too. Perhaps this wasn’t the best time to bring it up.” ​Try writing them a letter instead to keep the conversation going.

​​But, ​if you find the discussion goes even better than you thought, let them know how relieved you are: “Wow, I was so worried about talking to you about this, but I feel better now.” You may find you have paved the way for more open conversation, and even happier holidays with the family, in the future.

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What’s Your Next Chapter? Questions for Any Age

“Would you tell me, please, which way I ought to go from here?”
“That depends a good deal on where you want to get to,” said the Cat.
“I don’t much care where…” said Alice.
“Then it doesn’t matter which way you go,” said the Cat.
“… so long as I get SOMEWHERE,” Alice added as an explanation.
“Oh, you’re sure to do that,” said the Cat, “if you only walk long enough.” (Alice’s Adventures in Wonderland, Chapter 6)

What will I do with myself every day in “retirement”? Many 45 – 65-year-olds struggle to answer this. But what if, for you, “retirement” is a long way off, or, has been going on a long time already? What if you just want to know how to spend your mid-life? Or your 80s? Since I was 20, I have relied on the What Color is Your Parachute? book series to help with this kind of question. There is the original one for career-hunting, and a “Retirement” edition. They may sound different, but both books essentially ask the same questions…When have been the times in my life that I felt most fulfilled? What accomplishments, big or small, brought me the most joy? What places have I lived where I was happiest and why? What kinds of people do I enjoy being around the most? How much alone-time is necessary for me? It turns out that, in many respects, planning for “retirement” is not much different than planning for any other decade.

But what about money? While retirement might be a time of “financial independence,” that term can vary by degrees throughout our lives. Many people start a new chapter in their 20s, 30s, 40s, or 70s. They must feel financially independent, at least for at time, in order to do so. If you are not there yet, what’s one thing you could do? Take ownership of your purpose. Some people hand over that ownership to a financial professional when they ask, “Here is the sumtotal of my financial decisions over my life so far… What kind of life (income) can you get me?” Some people even shop financial professionals this way and choose the one that gives them the highest answer.

What if, instead, you did the homework to determine what kind of life you want first? Then you could go to the financial professional and ask, “What are the chances I can lead this life, and not run out of money? How big or small are the changes I might I have to make to get there?”

When you determine your purpose first, you can align yourself with someone who can guide you to get there. You don’t give up ownership to them, because they help you know the impact of your decisions. You could wake up every day with purpose, knowing exactly what you are meant to do. That’s not retirement. It’s independence, no matter what age you are.

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The Dictator Game and A Charitable Plan

Stephen Dubner, co-author of the best selling book, Freakonomics, spoke at the Tampa Theatre last week. During the talk, he described a common psychology experiment where college students are given $3 just for showing up to participate. Then they are given ten $1 bills and told that another student down the hall was also given $3 but not the $10. They tell the student they are free to share as much or as little of their $10 with the other student as they would like.

How much do you think the first students shared on average with the anonymous second student? Answer: $3.

Before giving us that answer, though, Dubner turned the question to the audience and asked, “If you were the first student, how much would you share? How many of you would share $10?”

Out of a couple hundred people, two hands went up.

“Well, there are always a couple of Gandhis in the room,” he said. “How many of you would share $5?”

Lots of hands.


A few more hands.

“How many of you would share nothing?”

About ten hands went up. (Ok, yes, including mine.)

“You guys must be the economics students and professors,” he said.  In his parody, this is how trained economists perceive the situation: “‘The $10 has been given to ME, so it is MY money, and that student down the hall is NOT ME. So if it is MY money, and he is NOT ME, then that must mean I keep it for ME.'”  Later he clarified that most economists wanted to know that the other student would make the highest and best use of the money before giving it to them.

Psychologists call this The Dictator Game because the first student has all the power and all the money. Dubner went on to describe other variations of the game, which you can read about in his latest book, SuperFreakonomics. The variations on the experiment showed that the Dictator Game was a flawed indicator of a student’s altruism. Rather, a student’s altruism was also influenced by whether or not they knew someone was watching their decision; and by how the giving choice in the question was framed.

Ever been to a charity auction and watched in awe at the prices paid? Charities know some altruistic people can be more persuaded to give if their donation is public, in a fun, and competitive, setting, rather than private and anonymous. Others are the opposite. Knowing, and respecting, a donor’s altruistic personality traits can help charities raise more funds for their good causes.

Turning the tables, though, knowing how certain factors affect our own willingness to part with our money can help us make better decisions when caught off guard. What can we do to better prepare for the next unexpected request? Make a charitable plan an integral part of your financial plan, and share your intention with the charities who will benefit from your generosity.  Sharing your intention is like mortar to a charitable plan – it solidifies your commitment and reduces the chance you will deviate.

When you are approached by a charity not on your list, you can tell them, and yourself, that you have made your plan for the year (or the decade, or your lifetime) already.  If you are truly interested in their mission, you could ask them to contact you again when you will be revising the plan.  (October-November could be a good time for review, along with your year-end tax planning.)

However, if you are not interested in their mission, just tell them you already did your plan.  But, don’t say it like a dictator.  Instead, pretend you are an economist.

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