Parents hardly talk about finances with their children. Parents think that their financial life is their own private matter. On the other hand, adult children think that they shouldn't interfere into their parents' financial matters. However, if adult children are kept totally in dark regarding the financial health of elderly parents, then life may become a mess anytime. Parents may make costly financial mistakes such as exhausting their retirement funds and incurring huge credit card debts. Adult children may come to know about these mistakes when their parents are in death-bed. At that point of time, it'll be difficult for the grown-up children to handle the creditors and collectors.
Parents are human beings. They can make financial mistakes. So, as a dutiful child, it is your responsibility to have a comprehensive knowledge about your parent's financial condition. Your parents won't call you up and give an in-depth analysis of their finances. You've to take the initiative and ask some important financial questions to your parents. Then only you can get an over view of your parent's finances.
Financial questions to ask your parents
Here are the 5 questions which you shouldn't forget to ask your elderly parents.
1. Have your parents made financial plans?
Parents have a huge sense of self-respect. They love their independence. They don't want to be financially dependent upon their children. They want to live as per their whims. There is no problem in that as long as your parents stay within their means. Ask your parents about their future plans. Are they planning for a vacation? If yes, then do they have the money to finance the trip? Ask them if they're planning to buy a house in the near future?
2. How can you get key information about your parent's financial life?
You wouldn't wish to spend countless hours searching for financial documents when your parents are sick. Ask your parents about where they have kept all their financial documents such as insurance papers, credit card agreements, will, bank papers, tax returns, stock certificates, etc. You can make photocopies of the important papers and keep them with yourself. Do ask about the contact details of the family financial planner.
Assure your parents that you're asking about these things only to tackle the financial emergency situations. You may even ask your parent to make your brother or sister the power of attorney. If your father gets a heart attack, then his accounts will be frozen immediately. However, if anyone of the children has the power of attorney, then he/she will be entitled to make decisions and use accounts on behalf of your father.
3. Do your parents need any kind of financial assistance?
Parents may feel shy to express their financial needs to children. Ask your parents if they need money or any other kind of financial assistance. Don't just handover a check to your parents. Rather, ask your parents to send all the bills to you. You can pay the bills yourself. Your parents are getting old. They forget several things. They may get into serious financial troubles by forgetting to pay the bills.
Send money to your parents every month. They can use the money for meeting various emergency expenses.
Finally, ask your parents if they are going through financial problems. Ask them about their retirement plans. Find out if they are ready for retirement? If they're not yet ready for retirement, then it means that your parents have not saved enough. Don't ask about their total savings. They may not feel comfortable in revealing their net worth. Your parents may also feel that you're asking this question to know about your inheritance.