How to Talk to Aging Parents About Finances

Bridget Wall is an attorney in Sophisticated Planning Strategies at Northwestern Mutual.

Talking to your parents about their money situation can be difficult but, as they grow older, it’s important to broach the subject. Whether you talk about it or not, you’ll inevitably need to get involved with their finances someday.

So, even if it feels a bit awkward right now, getting a clear picture of their finances today will help you confidently support them down the road. Here are ideas to help you start the conversation with care and respect along with some practical tips for what you’ll need to do to help.

How to start money conversations with your parents

Avoiding the topic of money with your parents can leave your family unprepared when it matters most. Here are a few tips for how to broach a money conversation:

1. Don’t wait for a crisis

The worst time to have this conversation is in the middle of a health scare or other emergency, where emotions are high and it can be challenging to make urgent decisions. Bringing it up while everyone is calm and stable gives the family room to think clearly and communicate openly. Plus, giving yourself time to plan will likely lead to better outcomes and help reduce stress later.

2. Focus on the whole family

By framing it about collective financial well-being (and not just about how much money your parents have), you can make these conversations feel more caring and less invasive. Mention that you want to make sure you’re able to help if something unexpected happens rather than being in the dark during a difficult moment.

3. Take small steps

Just as your parents likely had a series of talks with you about your own financial independence, you don’t have to cover everything at once. Starting with a simple question, like where some important documents are stored, is much less overwhelming than asking how much they have in their accounts. Taking small steps might make them more willing to share a fuller financial picture.

Money questions adult children should ask their parents

Do you have trusted advisors?

Every family situation is unique, so it’s possible your parents may hesitate about sharing their personal finances with you—especially if they are in good health. A good place to start is by asking them if they have a financial advisor or another trusted professional with whom they would feel comfortable reviewing their financial details. If they do, ask if they will share those contact details with you.

Consulting with a trusted financial advisor—either yours or theirs—can be a great resource. So if they don’t yet have an estate planning attorney and financial advisor, this would be a good time to help them find one. Explain that the goal is to give everyone in the family peace of mind that your parents’ wishes will be documented and carried out, which can help them move into their next phase of life confidently.

Which types of bank, investment, or retirement accounts do you have?

After your parents have agreed to accept your help, compile a list of their accounts—checking, savings, brokerage, IRA, 401(k), pensions, life insurance, and any others. This list should include:

• Institution name
• Account number
• Link to access
• Log in/password or other credentials

Without this information, you can face frustrating and potentially lengthy processes trying to locate and access accounts, even if you’re the named beneficiary. Keep the document in a secure but known location or within a password manager that only a trusted person can access.

What types of active life insurance policies do you have?

There are many different types of insurance so it’s important to understand what your parents have and how they fit into their financial plan.

• Term life insurance: This type of policy covers a set period, such as 10, 20, or 30 years. It’s critical to know when a term policy is set to lapse so you can decide if it needs to be renewed.
• Whole or permanent life insurance: While it doesn’t expire, it does comes with another layer you’ll want to explore. Over time, these policies accumulate a cash value that can be borrowed against or ultimately cashed out upon death. Ask your parents how much has built up and if they’ve ever taken a loan against the policy, which would reduce the death benefit.
• Final expense or “burial insurance”: A smaller, simpler type of policy, it can be used to cover end-of-life costs, including funeral and burial expenses. You’ll want to know if one of these exists and how it works so you can access it as applicable. However, despite its name, it functions more like a whole life policy in that it doesn’t have to be used specifically for these purposes.

Do you plan to stay in your home or are you considering downsizing?

While downsizing can make a lot of financial sense—selling a larger home can unlock meaningful equity and a smaller house can often mean lower taxes, insurance and maintenance costs—giving up the family home can be fraught with emotions. Your parents may be perfectly happy to remain in their home, but as they age, that could change, whether because it’s unsafe or too much to manage.

Start by asking them some questions about how they feel about it:

• Do you still enjoy living here?
• Do you still love working in the yard, or has the upkeep become a burden?
• Do you still love all the space, or would you feel better in a smaller home—perhaps something that’s all on one level that’s easier to maintain and has fewer stairs?

If they decide moving makes sense, help them research different areas that might be appropriate to live in retirement—whether it’s closer to you or other friends or located in a popular retirement area. Then help them get the house ready to sell and be available to help them through what can sometimes be a lengthy process.

When was the last time you updated or reviewed your estate planning documents?

Often people draw up these documents when there is a change in their lives, like the birth of a child or a loved one passing away. However, not everyone thinks to regularly review and update the documents that make up their estate plan.

If these documents get out of date, your parents’ true wishes may not be followed. An up-to-date estate plan is vital to ensure that your parents’ assets are distributed to the people and/or charities that they select and that they have trusted loved ones named to make decisions on their behalf if they are no longer able to do so. As a general rule, will and trust documents should be reviewed annually or any time there’s a life changes, such as a marriage, divorce or death.

In addition, it is essential to regularly review and update beneficiary designations on each of their financial accounts such as life insurance, retirement accounts, and similar assets. While many people do not realize that beneficiary designations are considered a core part of an estate plan, they control the disposition of these assets and are not overridden by a will or trust. Keeping beneficiary designations up to date is crucial for avoiding unintended outcomes.

Where do you keep your estate planning documents?

Some people want to keep these in a safety deposit box, but that can create hurdles if you don’t have the authority to access them. If your parents are not comfortable keeping the documents in the house, just make sure you know how to access them so you can act on your parents’ behalf. If the papers are stored in a secure location digitally, confirm the password, but keep in mind that some institutions might not accept a digital version.

Have you planned for the cost of long-term care?

Many people are caught off guard by the financial side of long-term care, mistakenly assuming that Medicare covers it. Without a plan in place, those expenses fall entirely on the individual or their family. Talk to your parents about whether they have a plan in place and what their wishes are.

There are a wide range of long-term care options available, from nursing homes for those who need round-the-clock care to a home health aide who helps with daily tasks, or an assisted living facility that provides a middle ground. The primary factor for determining long-term care needs is self-care ability (also known as the activities of daily living), such as whether your parent can handle bathing and other self-care routines, as well as their medications. And don’t overlook the importance of making sure their social needs are taken care of.

Have you communicated your wishes regarding life support?

As your parents get older, it’s important to know their wishes for medical treatment for the end of their life or in a case where they could be permanently unconscious. These wishes need to be documented in a part of their estate plan known as a living will. And, in a case where they can’t make medical or financial decisions on their own, they will need a healthcare power of attorney and financial power of attorney to designate someone to make decisions on their behalf. Keep in mind that if you have agreed to act as your parent's power of attorney, it's important that you know where the documents are kept and understand what the role requires of you.

Make family finances an ongoing conversation

Treating financial discussions as a continuous dialogue rather than a one-time event can help you build trust and stay ahead of future needs. In the best scenario, you’ll have gained your parents’ blessing to help them manage their finances before signs indicate that you need to take action. These could include unpaid bills, unaccounted for withdrawals, or even just a general decline in your parents’ ability to handle day-to-day tasks. If you do sense you need to take control over an aging parent’s finances, you may need to consult with an elder law attorney.

While navigating your family's financial transitions can feel overwhelming, you don’t have to go it alone. Your Northwestern Mutual financial advisor can help facilitate these important conversations with your entire family. Creating a comprehensive, multi-generational plan can help ensure your parents' legacy is protected while keeping your own financial goals on track—and give you the peace of mind that your family's future is secure.