Editor's note: This article appears in Kiplinger's special issue Success With Your Money.
You thought your parents were nervous when they sat you down to have The Talk about sex. Now it's your turn to have The Talk with your parents -- about how they wish to handle their finances as they get older -- and your beads of sweat are really popping.
To start a conversation that doesn't end in tears, a shouting match or stony silence, use any of these nonthreatening approaches: Share information about your own finances or estate planning (better yet, ask for your parents' advice). Talk about a health or financial emergency experienced by a friend or neighbor. Get your siblings involved or call in a third party to facilitate the discussion, so you're not the heavy. Above all, let your parents know that they're still in control.
Geraldine Davis, who's now 85, took control of the family checkbook when her husband, Dallas, headed off to war in 1942, and she never relinquished it. After Dallas died in 1992, Geraldine "managed very well as a widow," says her daughter, Deanna Cleaveland. "She sold a home, bought a condo and invested in stocks."
She also kept her daughter up to date on her finances. So when Geraldine began to slow down and was diagnosed with dementia in 2003, it wasn't a problem for Geraldine to update her will and health-care proxy, and she was glad to give her daughter a durable power of attorney.
But she balked at selling her house and moving to an assisted-living facility, even though, some years before, she had purchased a long-term-care insurance policy that would have covered the cost. Deanna and her brother, Doug, sought outside help from an elder-care manager, whom they invited to talk to Geraldine about her options. "That helped us keep things on a business level, instead of making it sound like 'your children want you to do this,' " says Deanna. (For a listing of elder-care managers, who charge $75 to $150 an hour for their services, contact the National Association of Geriatric Care Managers at www.caremanager.org.)
It wasn't until a tearful family discussion that her mother finally decided to move. "She was feeling very unloved at the time," says Deanna. "But today, to hear her tell it, moving was all her idea. We're delighted that's the way she thinks about it."
If moving is an intractable issue with your parents, you have other options. With a reverse mortgage, for example, homeowners age 62 and older can borrow against the equity in their home if they need cash to pay for home care. Or consider remodeling your house to accommodate an elderly family member. One year of nursing-home care costs an average of $75,000. That amount could finance a makeover that could also add value to your home.
Since Geraldine's move, her dementia has gradually worsened, and Deanna has taken over more responsibility for her mother's finances. But she's careful to keep her mother in the loop so Geraldine still feels like she's in charge.
Every Sunday after church, the two women go through the weekly bills. Deanna writes the checks, and Geraldine signs them. "I keep her informed, even though I know I'll have to tell her again the next week," says Deanna.
Sometimes it's little things that have the biggest impact on keeping the peace. Geraldine didn't mind giving her daughter power of attorney, but she didn't want to hand over her purse. She still carries one, and Deanna is careful not to go into it without asking.
But now blank checks are left at home. The only checks Geraldine writes on her own are to her hairdresser at the assisted-living facility, who helps her fill them out. Geraldine still uses a credit card to help track expenses, and she and Deanna go through the statements line by line.
Because the two women have established a relationship that works, Geraldine is "happy for me to be doing more for her as she gets older," says her daughter. "We don't know what's ahead, but we're relishing what we have now."