When we were young, our parents did their best to teach us how to become financially responsible. As our parents age, many adult children find that the roles start to reverse, and we may need to step in to keep our parents’ finances—and our own—on track. Conversations with a family member about money can be uncomfortable under the best of circumstances. When they involve funding plans for how and where they’ll live as they age, that discomfort can get dialed up to 11. Because we’re not only talking about money. We’re confronting our loved one’s mortality. That’s some heavy stuff.

Even so, having this financial conversation is vital if we want to make sure Mom and Dad receive the care they need when they’re no longer able to live independently. If we can get a clear picture of their financial resources, we’ll have a better chance of providing them with the best care possible. This may also give us time to do some financial planning on our own, in case we’ll have to provide their care or cover any of their care costs.

Here, I’ll share how to have this important conversation with less conflict,  and which financial information our parents should share with us.

Collaboration, not interrogation

Approaching this conversation in the spirit of collaboration will go a long way to opening our parents’ minds to sharing financial information with us. Our goal is to help them get all of their personal finances in order before they need us to step in for them if, for instance, they experience a major health event or we see changes in their mental, physical, or emotional habits. This isn’t a power grab. It’s proactive care. Here are the steps we can take to make this a productive conversation.

Step 1: Plan the conversation in advance

We all know our own parents best—we know their personality, their preferences, and, their hot buttons. So it helps to take some time to think about the best way to start the discussion based on our relationship with them. Here are some ways to prepare.

Outline questions

‍By jotting down our questions, we give ourselves the opportunity to read them aloud before we ask them. We want to make sure we get the tone right and create a nice flow. These can range from conversation to more direct questions like the ones below.‍

Questions about specific issues

• “Have you done much thinking about your living/care arrangements in the long-term?”
• “Are there things that should be done to the house to make it safer or easier for you in the short or long-term?”
• “Would you be open to bringing in outside care resources?”
• “Do you think it’s time to consider accessing outside care resources?”
• “Would you be open to me doing some research on care options?”
• “Do you think it’s time we look into assisted living options?”

Questions about finances for different care options

• “I’ve run the numbers on some care options. Can you let me know which of these work for your budget?”
• “Which of these options for improving your care look affordable to you?”
• “I’m happy to research the costs of different options, How much do you think you can afford to spend?”
• “Can we talk about the financial resources available to pay for these care options?”  
• “Before we start researching these care options, would you mind giving me an idea of the resources you have available to pay for them?”

Role-play the conversation

‍To prepare for the different directions the conversation may take, it can be helpful to role-play the conversation with another family member or friend.

Tailor questions

‍Generally speaking, our parents will either be open to direct conversations about their finances and care, or reluctant to engage. Based on where they fall on this spectrum, we can tailor the questions accordingly. For example, if they’re hesitant to share, a question like, “Can we talk about how much money you have saved for your long-term care,” may shut the conversation down before it even gets started. A better approach could be, “Have you thought about where you’d be happiest living should you need long-term care in the future?”

Hit pause

‍Know when to table the conversation if it gets contentious. We can revisit it later.

Step 2: Research care options

It helps if we’ve already done some research on the long-term care options available to our parents before we dive into the conversation. Understanding what’s out there and what it costs can help them narrow down their options. It will also help them understand why this conversation is so important.

The cost of different long-term care options varies widely by state, so check with a few local care facilities and home care agencies. If we look at the national averages, here’s where each option falls on the cost continuum.

Typically, we, our parents, and/or our parents’ long-term care insurance policy (if they’re among the 3% of older adults who have one) will have to cover these costs unless they qualify for Medicaid. Medicaid will cover nursing home costs if our parents meet strict eligibility requirements, which involve spending down nearly all of their savings and income on healthcare first. Some state Medicaid programs also pay family caregivers to provide care to an eligible aging family member. And the VA offers four programs that pay some family caregivers of some veterans and their surviving spouses. Here’s information about Four Ways to Get Paid as a Family Caregiver. 

Pro tip: Research more than one type of care arrangement. While we may believe that hiring in-home assistance is the best way to go, our parents may have a different idea. By looking into the details of assisted living and memory care care facilities as well, we can communicate more effectively with them about the pros and cons of each option.

Step 3: Keep the conversation low-key

Informal, conversational, and collaborative—these need to be our keywords as we plan the conversation. Here are some ways to achieve this vibe.

Begin the conversation with an icebreaker

‍Financial details can come later. It will be easier to uncover them if we warm up our parents first by showing them that we care about them and how they’re doing. Here are some good openers:

• “How are things going lately?”
• “How are you feeling about your health these days?” 
• “Are there any issues or challenges I should know about?”
• “Are you having any trouble taking care of the house?” 
• Have you been able to keep up with your medications?
• “Are you having any trouble getting around the house?” 
• “Have you thought about changes we could make to improve the situation?”
• “Are you open to discussing ways to improve things?“
  

Have a private conversation if possible

‍While it can be tempting to include another family member or friend in the conversation, we should avoid making it feel like an intervention. Adding in more people can make a conversation seem confrontational. And given the confidential nature of the discussion, we should hold it away from possible eavesdroppers.

Avoid overly dramatic language

Even if our loved one’s finances limit their care options, we should try to stay positive about the situation. The same holds true if they’re reluctant to talk about the subject. Our best bet is to calmly explain to them why understanding their financial picture will empower us to help them find the best care available. 

Step 4: Talk with Experienced Professionals

I know, I just said to keep this conversation private. But if we know someone who has specialized knowledge about finances or care options, or who is trusted by our Mom or Dad, they could help smooth over any difficulties and ease minds. 

We can also ask our parents if they’d be open to speaking with a financial planner or care advisor. Having an impartial expert on estate planning, elder law, or elder care share knowledge and insights can help diffuse emotions. Our loved one may open up to someone they’ve worked with or who they perceive as an authority on the subject in a way they wouldn’t with a family member. 

Step 5: Gather financial information

I talk about this as “a financial conversation,” but it will probably involve several conversations. There’s a lot to cover, our parents might not have all the answers at their fingertips, and it can be emotionally taxing on all of us. So consider breaking it into chunks.

The questions above will help everyone align on the idea of long-term care preferences. The following financial information can be gathered in subsequent conversations. You can keep all of the information in a shared spreadsheet.

Savings and Assets

The next conversation can focus on our parents’ financial situation. Here, we’ll want to gain an understanding of all of their financial accounts. This includes banking and investment accounts, life insurance policies, and Long-term Care Insurance (LTCI) policies. Ideally, they’ll share account numbers and the names and contact information of the bankers, brokers, and insurance agents they may work with.

If our parents have LTCI, we should find out what, specifically, it covers in terms of care providers. Some LTCI policies will pay a family member to provide in-home care. A call with their LTCI agent can shed light on this. If they don’t have LTCI, we can ask if they would be open to purchasing a policy to help cover their long-term care costs. There’s really no age limit for purchasing LTCI. Even if they’re over 75 they could find a policy, especially if they’re in good health.

We’ll also want to understand what their monthly retirement income looks like. This can include income from social security, pensions, disbursements from an IRA or other retirement plan, income property, etc.

If they own a home, that’s another asset to be considered when assessing what kind of long-term care they can afford.

Monthly Expenses

Knowing how long our parents’ money will last means understanding what their living expenses are now, and what they’re likely to be when they need a higher level of care. Sitting down with our parents and the last few months of their bank statements can paint a good picture of their current monthly expenses. We’ll want to look at regular expenditures like utilities, mortgage(s), property taxes, rent, services, groceries, medications, gasoline, insurance premiums, debts, etc. If they plan to move into an assisted living facility, will they sell their home to cover some of the cost? And what will the facility charge when they start needing assistance with activities of daily living like dressing, bathing, and medication management?

Legal Documents

If our parents have already drawn up a will and/or trust, they should let us know where these documents are and how to access them when the time comes. These documents may also name a family member or friend as their durable power of attorney. This trusted person will be able to make financial decisions on their behalf should they become incapacitated. Other important documents include an advance care directive, which outlines their preferences for medical care when they’re unable to make their wishes known, and titles to any property they own.

Names of their financial and legal advisors

We should know which lawyers, financial advisors, accountants, or other professionals our parents work with, so we can contact them on behalf of our parents when our parents need assistance or to tie up their affairs after our parents pass away.

Clearly, there’s a lot for us to cover. But again, there’s no need to cover it all in one sitting. This can be an evolving conversation. And as it evolves, there’s a good chance we and our parents will start to feel more comfortable with it. The goal is for no one to be blindsided by the high cost of long-term care. Millions of Americans are bearing the financial strain of caring for their aging family members, paying for care costs out of pocket, and often having to leave their jobs to provide that care. The better we plan for this phase of life, the less disruptive it will be for all of us. And that means starting the conversation.

At RubyWell, we’re paving a path to financial stability for all family caregivers. Our Family Leave Finder provides state-by-sate info on family leave laws. Soon, family caregivers will be able to make the most of a loved one’s health insurance benefits with our Medicare Advantage Benefits Navigator. And ultimately, we're developing compensation solutions so that every family caregiver can be a paid caregiver. If you’d like to be among the first to hear about future products, join our waiting list.

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