Geoffrey Rush once said, “Nobody ever said that growing old would be easy. It’s tough on the ego.” Life is uncertain, and aging brings with it particular challenges and concerns. But financial health need not be one of them. Having honest conversations in a healthy way with loved ones goes a long way in overcoming anxiety about the future – for both you and your loved one.

With proper planning, tools, and information, your conversation about finances, wills, power of attorney, trustees, and more can be caring and practical versus awkward, frightening, or adversarial.

The why and when

So, how do you know if it’s time to have that conversation? We think of financial matters as each person’s own private business – and of course, that’s exactly right. However, as we age, we are likely to face health changes and financial decisions that impact both ourselves directly and the lives of those who care for us.  Discussions might need to include who will make decisions if needed for healthcare, who will be able to help with financial management details if it becomes too intense or burdensome, and how to follow the wishes of someone as they age.

The key to a successful conversation is beginning early – even when your loved one is still working, healthy, and managing their own finances and records. Having these types of conversations on a regular basis can create normalcy and a comfort level with a personal topic, leading to less uncertainty or anxiety later on.

What if you’re just now starting the conversation and your loved one is well past their working years? That’s OK! A late start is better than no start at all. Your main goals are to solve common concerns, make sure your loved one feels comfortable with both current and future arrangements, and identify those who can support and follow through on your loved one’s wishes. Talking early allows you both to ensure the right people are documented for the right support as time and circumstances change.

Some signs that it’s time to have the conversation right away to avoid costly financial mistakes are:

1. Scams. Elderly financial abuse is ever-present, and the skills of scammers are growing more sophisticated.
2. Frequently losing important items like keys or wallets – or passwords! – or forgetting important dates.
3. Making odd or unusual purchases.
4. Bills piling up.
5. Confusion about what they might need financially and what steps to take to access what they need.
6. Struggles to understand banking or going to the bank repeatedly for no reason.
7. Physical decline. While their mind may be bright and alert, having to focus on finances and not physical health can take a toll.

Certainly, the conversation should involve respect, kindness, and a willingness to talk about how to ensure they will have their wishes followed and be in control as they age. Along the way, the beauty of these conversations (and yes, we mean plural!) is that you will learn about your loved one’s wishes, what they want to create a legacy around, what charities they may be passionate about, their ambitions for their upcoming years, and more.

How to set the stage

How you approach the conversation is important – of course! The old adage applies: “The what may not be as important as the how.” Your tone, body language, and mental state all come into play.

Your loved one may have wishes that will affect other family members, such as where they would like to live if they have health challenges, or who they would like to care for them. They may also have specific wishes that have been outlined and documented regarding their finances.

You’ll want to work through details on what your loved one would like their life to look like as they age, who they would like to support them, and what role each support person will play.

1. Before your conversation, prepare yourself and your meeting space. Meet privately in a comfortable setting where they feel safe.
2. Check in with yourself and settle any lingering doubts or concerns. The ultimate goal is for your loved one to feel safe and free to make their own choices with dignity.
3. Avoid a condescending approach or exasperation. Show them you understand their concerns and you are here to make sure they are followed with the right documentation and details.
4. Keep calm and acknowledge the emotions that pop up. Finances can be emotional topics – especially if you’ve never broached the subject. Different generations often have wildly diverse feelings when talking about finances, too. Remind them you have their best interests at heart and be sure to acknowledge any of their feelings surrounding a future loss of independence.
5. Schedule regular chats (as we said, this isn’t a one-and-done topic!)

The nitty gritty

You’ve done your homework, and you’ve set the stage… now what?

First, you need to address general finances. Learn what types of accounts they use and how they access them. Discover what some of their financial goals are, so you can help carry out their wishes. Understand if they give funds to others, and how they like to do so.

Next, talk about any investments or other assets they have and how they are managed. Because income is so important for everyone, digging into this topic is important. Make sure you both understand what are all the layers of their financial estate, how it’s managed now, and how they’d like it to be managed in the future.

Finally, talk about trustees and beneficiaries and wills (oh my!). Is their will up to date? Have they considered ways they can make sure their assets transfer smoothly, by making sure property is jointly titled, retirement accounts have named beneficiaries, and possibly creating a revocable living trust?  What are their charitable wishes? Who is their power of attorney – for their estate and will? Do they need to create a trust? Is everyone’s information up-to-date? Has any of the information or their wishes changed? And most importantly, do you know where all of this information is kept? Do you have login information or access? Who are the trusted professionals who maintain these records?

Pull in a professional

These are a lot of questions and topics to work through. Take it slowly, over time, and consider working with a financial advisor who can help guide you through considerations and documentation that’s best to double-check and update. A financial advisor often acts as a quarterback of a professional advisory team, coordinating legal, investment, accounting, and other professionals to meet the needs of someone looking to protect their legacy and plan for future transitions.

This can be particularly beneficial as a financial advisor is a neutral third party, and if they are a fiduciary, they are trained and required to make recommendations in the best interest of their client. They have experience acting as a sounding board and as a mediator in family discussions, along with knowing many complex details about navigating later years financially.

Worth the work

While the conversations with your loved one may seem daunting at first, as you come to trust each other in this area, it gets easier. Even though it may feel like it, you are not alone. There are plenty of support roles for friends, siblings, and family to play in this process. Financial professionals are also there to relieve the burden of uncertainty as well, so rely on the help and don’t carry the responsibility yourself.

If you are approaching serious conversations with your loved one and would like support, advice on what topics are most relevant, or guidance on how to have these discussions, Domani Wealth advisors are only a phone call away. You can get in touch with our team members anytime to start a conversation, or you can call 855-555-5455 or email info@domaniwealth.com.