How to talk to aging parents about money

Start the money talk with your parents early, while they're healthy, and frame it as making sure their wishes are followed. Ask where things are, who they want to help, whether they have a power of attorney, and how long their savings would last if they needed care.

Four documents matter most

A durable financial power of attorney, a health care power of attorney or proxy, a will, and up-to-date beneficiary names on retirement accounts and life insurance. Rules for these documents vary by state.

Long-term care is the big unknown

Medicare and Medigap don't pay for long-term care. Medicaid can, but eligibility depends on income and assets and differs by state. Knowing which applies shapes every other plan.

Know the warning signs of exploitation

Unpaid bills, new names on accounts, missing papers, checks to cash and a new helper who isolates a parent are all signs the CFPB lists. Report concerns to Adult Protective Services.

A helper must keep money separate

Anyone managing a parent's money, as an agent under a power of attorney or a trustee, must act in the parent's interest, keep their money apart from their own and keep records.

How to start the conversation

Pick a calm time, not a holiday dinner or the day after a health scare. You might say you're getting your own papers in order and want to make sure you'd know how to help them if they ever asked. Some families use a news story or a friend's experience as an opener.

Keep the first talk short and focused on what they want. Listen more than you speak. If a parent pushes back, don't argue. Ask if you can come back to it in a month, and ask for one small thing in the meantime, like the name of their lawyer or where their will is kept.

Questions worth asking

Where are your important papers, and who has a copy? What income do you have each month, such as Social Security, a pension or account withdrawals? Which bills are on autopay? Do you have a will, a power of attorney and a health care proxy, and when were they last updated?

If you needed help at home or care in a facility, how would you want to pay for it? Do you have long-term care insurance? Who would you want to make decisions if you couldn't? You don't need every answer in one sitting. The goal is to know where to look.

The documents to set up

A durable financial power of attorney lets a person your parent chooses, called an agent, handle their banking and bills if they can't. A health care power of attorney or proxy does the same for medical decisions. Without these, a family may have to ask a court to appoint a guardian or conservator, which is slower and more expensive.

A will says who gets what. Retirement accounts and life insurance go to the beneficiaries named on the account, even if the will says something else, so those names need to be current. An elder law attorney in your parent's state can draft the documents to match state rules.

Paying for care

Long-term care means help with daily activities like bathing, dressing and eating, at home or in a facility. Medicare doesn't pay for it, and neither does Medigap. People pay from income and savings, from long-term care insurance if they bought it, or through Medicaid if their income and assets are low enough under their state's rules.

Costs vary a lot by area and by the kind of help. The Eldercare Locator, run by the federal Administration for Community Living, connects families with local agencies that know what services and help exist nearby.

Protecting them from scams and exploitation

Older adults are frequent targets of scams, and sometimes the person taking advantage is someone close. Watch for bills that go unpaid, unusual withdrawals, new names on accounts or cards, missing papers, and a new friend or helper who keeps others away.

If you suspect abuse, call Adult Protective Services in your parent's area, and the police if there's immediate danger or a crime. If money was taken through a bank, tell the bank right away. Naming a trusted contact on brokerage accounts gives the firm someone to call when something looks wrong.