As Benjamin Franklin once famously quipped, "In this world nothing can be said to be certain, except death and taxes."
That's true. Unfortunately, the estate tax -- more commonly known as the death tax -- hits families as the worst possible moment.
The controversial tax -- one more chance for the IRS to fill its coffers from hard-working Americans -- generates the kind of emotional fervor most financial issues do not generate. Yet for all the willingness to talk about their dislike of the death tax, most people eschew discussion about other family financial matters, especially as parents get older.
"Some stubborn parents just refuse to talk about their money. No matter what their adult children say to them, they put it off, change the subject or tell their children it's none of their business," Carolyn Rosenblatt, an elder law attorney and co-author of "The Family Guide to Aging Parents" and "Succeed With Senior Clients: A Financial Advisors Guide To Best Practices," told LifeZette.
Of course, many adult children aren't in any particular hurry to broach the subject either, said Rosenblatt.
"They have their own discomfort about it and procrastinate," she said. "Then a crisis comes up and no one has any idea what the parents have or where to find important documents."
In an interview with LifeZette, Rosenblatt stressed the importance of talking to parents about their finances -- and how the success of these conversations often comes down to how you approach the subject.
Question: Why is talking about finances such a social taboo? Answer: Many in our society consider it rude to ask about money. Also, many aging parents lived through the Depression, when money or the loss of it was sometimes enough to drive one to suicide. Generally, money has much symbolic meaning and is emotionally charged for many people when it comes to talking about it.
Q: But even with family, why don't we like to talk about finances? A: For some, money is equated with power and control. Family members may have widely differing attitudes about money, from shame because of low funds, to secrecy for fear of loss of control, to a haughty sense of being better than those who are less financially successful. There are numerous attitudes in families' internal cultures and these can lead to conflicts. Some avoid the subject for these and other reasons often having to do with emotions about money.
Q: Why is it so hard for adult children to broach the subject of finances with their aging parents? A: Aging parents who may have survived the Depression are typically secretive about money. Some react to the deprivation they suffered during those years by overspending, by being excessively stingy even with themselves, or by irrational fears that their money will be taken from them if they reveal what they have.
Also, many families do not communicate well to start with. Add in an emotionally charged subject like money -- and blow-ups can happen. Most people tend to want to avoid conflict and talking about money can cause conflict. Adult children may fear angering their parents or being cut out of an inheritance if they bring it up.
Q: So what's the best way to broach the subject of finances with one's family? A: If you are the adult child, be the one to initiate the conversation. Your aging parent is less likely than you are to bring it up. But the adult children are likely to need the information about parents' finances because they could be left with pressure to support aging parents if the best planning well ahead of illness or decline in health causes expenses to mount. Be frank, choose a right time with privacy and no distractions, and think ahead about what words will be most effective.
Q: When is the best time to have that talk about finances? A: A major birthday, retirement, birth of a grandchild, onset of any illness, death of a close relative -- all of these could prompt the conversation. Choose a time when parents are totally clear mentally, and in good enough health to take steps that may be needed to enhance financial safety.
Q: What about getting help to have these discussions, such as from a financial planner or attorney? A: This depends on the ability of the seniors in the family to communicate the information. If they are not skillful, by all means use the help of a professional to instruct and explain. Written or password-protected digital information should be made available to all family members.
Q: Can having these financial discussions ever hurt the relationship between an adult child and his or her parents? What about among siblings? A: Yes, a risk of sharing information can come with a sibling or other who is mentally ill, a substance abuser or just irresponsible with money. Knowing that funds are there can create efforts to get the money, whether by illegal means or by manipulating an aging parent to give it up or "loan it." Sharing how a will or trust is written also runs the risk of creating resentment if the anticipated distribution is unequal among heirs.
Q: How can a person make family financial talks easier on everyone involved? A: Size up your family realistically. Is anyone going to be really difficult? Who has good communication skills and who doesn't? Is anyone likely to try to take advantage of the financial information once he/she knows it when there is an ill or easily manipulated parent? My advice is to be sure that all legal documents are in order well before any discussion takes place. Next, get input from the lawyer, accountant, financial advisor who is knowledgeable on the matter -- and use their advice or invite them to be in on the discussion.
Finally, choose a day and time that are best for the elders, and do as much as you can to ensure they'll be in a good frame of mind. Be patient, too. These things are not done in one big talk, but over a series of well-planned conversations when all present have a chance to be heard should they wish to speak.