5 Uncomfortable Money Questions You Need to Ask Your Aging Parents

First things first — we know this post is kind of a downer.

And we know the next time you head to your parents’ house for dinner — let’s be real, to do your laundry without digging into your stash of quarters — end-of-life planning is probably the last conversation you’re going to want to have.

But the ugly fact of life is, children (hopefully) outlive their parents — and after mom and dad are gone, you might have a monetary mess on your hands.

Maybe your parents don’t have your Penny Hoarding habits, and you’re left doing damage control.

Even if your parents’ finances are pristine, there’s likely to be a lot of red tape involved.

There’s more to it than knowing where your folks keep their financial documents… if they’re organized enough to have a dedicated spot in the first place.

If you talk to your parents about their finances and get the information you need now, you’ll thank yourself later during the emotionally wrought and confusing time of mourning.

And the sooner, the better. These issues can become prescient even while your parents are still alive if, heaven forbid, illness or senility makes them unable to continue to manage their own finances.

It’s gonna be awful, no matter how you slice it — but having what you need organized ahead of time will offer some comfort and control.

How to Have an Awkward Conversation

So maybe you’re thinking, OK, I understand why I should have this conversation… but how the heck do I broach this subject?

Depending on your relationship with your parents, this may be one of the most delicate conversations you’ve had since the mortifying “birds and the bees” talk back in seventh grade.

It’s not like you can just casually change topics from the football game to post-funeral finances.

But we’ve got a few tips to make it go as smoothly as possible.

Plan for a couple of interruption-free hours. If you have small children, you’ll probably want to leave them with a sitter.

Diffuse tension by bringing up the discussion during a relatively quiet shared activity, like cooking or maybe a board game.

Consider letting your parent know you plan on bringing it up ahead of time. Not only will you avoid springing an unpleasant reminder of your parents’ mortality on them out of the blue — you’ll give them time to organize the information you need.

Don’t be judgmental. This is a rough conversation for mom and dad — the last thing you need to do is shame them about their financial habits, which are an incredibly private matter.

Finally, be open, be honest and be yourself. They’re your parents, after all. They probably won’t bite.

The Financial Questions You Need to Ask

Since your hands are now comfortably occupied chopping carrots or counting Monopoly money, you’re ready to take the plunge and get talking.

A quick disclaimer: We aren’t legal experts here at The Penny Hoarder, and every situation is different.

While this post should serve as a solid starting point, you may need even more information from your parents, especially if there’s a special circumstance.

For instance, do your parents own a small business? If so, you might need to be prepared to take it over — and fulfill payroll — at a moment’s notice, unless your parents have made other plans.

When in doubt, seek legal counsel to determine the most accurate details in your specific case.

Alright, ready? Here’s the information you need to get from your folks.

1. What’s the Plan?

Get this one out of the way first: Have your parents even thought about any of this stuff yet?

Do they have a will? Is it up to date? Have they done any estate planning or organized a trust?

Many people don’t want to think hard about their last wishes — after all, it necessitates thinking hard about the eventuality of your own death.

But your first priority should be ensuring your parents know what they want — and documenting it.

Then, you need to find out whether or not you’ll be the person in charge of carrying out those wishes. Legally, this involves your parents granting you power of attorney and/or making you the executor of the will.

Power of attorney grants you the right to handle your parents’ affairs while they’re still living. Will executors are only able to fulfill the terms of the will after a person’s death.

Get this part squared away first — the rest doesn’t matter much if you have no power to actually do anything with the information.

Plus, it’s a great time to open a dialogue about what your parents want in general — a conversation that should probably extend beyond finances into other end-of-life planning.

2. Where’s All the Money?

The next step is assessing the lay of the land.

Make sure you know where all your parents’ funds are — in checking and savings accounts,  wrapped up in stocks and bonds, or maybe just under the mattress.

If you can, gather account and routing numbers, as well as online usernames and passwords. Don’t forget about the safety deposit box!

Don’t think you’re going to be able to whip out your parents’ ATM card and make a withdrawal — even after death, using someone else’s checking account is fraud.

When the time comes, you’ll need to bring the death certificate to the bank, even if only to close the account.

But knowing where everything is will help you feel organized and in control during the legal proceedings to settle your parent’s estate and distribute their assets. It’ll also help you manage their funds for them while they’re still alive, should they begin to lose their mental faculties.

3. Who Else is Involved?

Do your parents have an attorney or accountant helping them manage their funds?

If so, you should have their name and phone number in case you need their help during estate-related legal proceedings. Maybe even ask mom and dad for an introduction during their next appointment, too.

4. What’s Paid Off — and What’s Not?

Your parents may have non-capital assets.

Do they own their house free and clear? What about the car?

Ask your parents for the location of any deeds and titles they may have in hand, and learn what debts they still owe.

Although you can’t be called upon to pay off their credit debt, your parents’ mortgage or lease might be passed on to you if you’re the beneficiary.

5. What are You Paying For?

Think of all the recurring charges in your own life.

You’re probably going to need to track down and cancel at least that many charges after your parents pass away — if not more.

While electricity and cable might be obvious, it’s easy to forget about the small expenses, like magazine subscriptions, Netflix or a Costco membership.

Get a complete list of everything now so you don’t discover six months’ worth of charges you weren’t aware of later on for a service no one’s using.

Get Organized

Now that you’ve done the heavy lifting and had the hard talk, make sure you have everything organized for when the time comes.

Create — or ask your parents to create — a master list with all of the information you gathered. This should include account names and numbers, usernames and passwords, as well as contact information for legal and financial advisors.

Then, make sure all the documentation is together in an easily identifiable location, digitally and/or physically.

Include:

• The master list and account documentation

• Tax files (It can be helpful to see past years’ returns if the estate is complicated.)

• Insurance policy information — including life, health, automobile, homeowner’s/renter’s and medical insurance/Medicare

• Deeds and titles

• Outstanding loan documentation

Not only will you be well-prepared for a bad day down the road, you’ll know how to organize your own finances to make it easier on your children.

Phew! Glad that’s over with.

Now you can get back to enjoying quality time with your family — with some additional peace of mind.

Your Turn: Have you had “the talk” with your parents yet?

Jamie Cattanach (@jamiecattanach) is a staff writer at The Penny Hoarder. Her creative writing has been featured in DMQ Review, Sweet: A Literary Confection and elsewhere.