How to talk to your parents about Money With everyone gathered for the holidays, this may be the best time of year to talk about your parents' financial security. Here's how to raise the subject without raising the roof.
By RUTH SIMON

(MONEY Magazine) – Few families are closer than the Lifsons of Hopkins, Minn. With Laurel, 40, and Scott, 39, living just a block away from Laurel's parents, Efrom and Honee Abramson, ages 73 and 71, the two couples (left) talk by phone or visit almost every day. Yet one topic is always off limits: how the Abramsons are paying for their retirement and what financial plans they've made in case of illness or death. Laurel, who worked in sales, taught school and is now home raising two young sons, doesn't bring up the subject because she's disturbed by the prospect of her parents growing old. ''I don't even want to think about it,'' she says. And Scott, a lawyer who represents creditors and handles family matters, though more practical, feels he must respect his wife's wishes. A few years ago, the Abramsons did ask Scott to recommend an attorney to draw up a new will. But involving the children further, insists Efrom, would invite trouble. A semiretired sales rep for a bed-frame manufacturer, Efrom says, ''We have three daughters, and if we tell one about our finances, we have to tell them all. It becomes a hassle.'' The Lifsons are hardly unusual. ''Most families have to be prodded into talking across the generations about money,'' notes Eileen Sharkey, a Denver financial planner who advises dozens of couples a year about providing for aging parents. When the topic on the family table links money and mortality, the atmosphere can become especially charged. Adult children are often reluctant to ask financial questions of their parents for fear of appearing overly interested in their inheritances. Others feel uncomfortable playing parent to their parents -- something Mom and Dad may resist as well. ''Parents are so used to giving advice and having kids take it,'' says Laurence Siegel, a 40-year-old financial consultant in Durham, N.C. In his case, he's sure he could boost his retired parents' earnings -- if only he knew more about their investments. ''My parents,'' he adds, ''have difficulty with the idea that the kids are adults themselves and are expert in their areas of work.'' Despite the awkwardness or anxiety involved, there are good reasons to bridge the financial generation gap. The simple fact is we're all living longer. Roughly 3.3 million Americans were 85 or older in 1990, and that number is expected to hit nearly 5 million by the year 2000. Therefore, children are understandably concerned about whether their parents might outlive their retirement savings or become bankrupted by long-term health-care costs. Naturally, the sooner children learn whether they must incorporate their parents' needs into their own financial planning, the better off everyone will be. Then too, if parents become ill or die, it is always comforting for children to know how to respect their parents' wishes. The strategies outlined below -- based on interviews with psychologists, financial advisers, gerontologists, social workers and families across the country -- can go a long way toward overcoming emotional barriers that often stymie detailed conversations about money. Given good motives and good communication, such a talk can benefit the entire family. Keep in mind, though, that one family's call to talk may be another's call to arms. So be sure to custom-tailor any strategy that you adopt to the particular sensibilities of your family.

WHEN TO HAVE THE TALK Most families wait for a crisis before holding a financial powwow. Don't do it. Have a money talk with your parents while everyone is healthy and financially secure. ''The earlier the better,'' advises Florence Kaslow, director of the Florida Couples and Family Institute in West Palm Beach, Fla. Even if your parents are still in their fifties or sixties, she adds, it's appropriate to bring up such thorny subjects as wills, medical powers of attorney and long-term health-care arrangements. Be gently persistent, if you can, because a discussion now may save trouble later. Valinda Kane, 43, a childbirth instructor in Fort Lauderdale, for example, began querying her mother about finances three years ago when Jennie Sylvia, now 78, was injured in a car accident. Her mother wasn't hurt badly, but the incident got Kane to thinking about the future. Sylvia, who lived nearby, always changed the subject. Then Sylvia, divorced for 27 years, was hospitalized for about a month with a septic infection. Kane took over her mother's finances. After having to search through closets and drawers for her mother's papers, Kane was shocked at what she learned. Her mom had taken a $20,000 second mortgage with a 13% interest rate to pay her bills, had bought half a dozen life insurance policies that each provided only $1,000 in death benefits and was even paying a psychic $5 every once in a while to help her pick winning lottery numbers. ''Becoming a parent to my parent was the hardest thing I've had to deal with in our relationship,'' says Kane, who moved her mother into her own home last year. Rather than waiting for a crisis, take advantage of an already planned family gathering to initiate your discussion about money. A relaxed, shared activity, for instance, may defuse some of the inevitable tension. Dr. Edward Schneider, dean of the Andrus Gerontology Center at the University of Southern California, suggests talking with a parent while you play golf or tennis. Another option, recommended by planner Eileen Sharkey, is holidays, such as Christmas or anniversaries, when the whole family is around and can participate.

HOW TO GET IT GOING Start by having a sibling call your parents and explain that the children would like to hold a family financial meeting at a convenient time -- perhaps the upcoming holiday. Or if you think a phone call would be disconcerting, wait until the family has gathered. Then explain that the children would like a family conference sometime during the visit. Naturally, offer your parents some alternatives. If they don't feel comfortable talking directly with you about personal finances, suggest that they talk to a sibling, one to one. Or they might begin by confiding in an attorney or financial adviser who specializes in working with retirees or the elderly. If the sudden reversal in roles is an insurmountable stumbling block, an alternative is to prompt them toward financial planning and action by sending them appropriate books or articles from financial magazines and newspapers. ''That depersonalizes it,'' explains Neal Cutler, a gerontologist at the Boettner Research Institute in Bryn Mawr, Pa. ''The child becomes merely the messenger.''

WHO SHOULD PARTICIPATE Precisely who takes part in the money talk depends mostly on the parents' wishes. ''You have to let them make the decisions,'' says William Kipp, director of social services at Mount Sinai Medical Center in Miami Beach. Usually, it's best to include as much of the family as possible -- and that means every sibling. You may also suggest that grandchildren be present, if they're at least 17 or 18 years old. And if your parents are divorced and remarried, then the new spouse ought to be invited. If family relations are at all tense, think about letting each child talk to the parents separately or suggest that an outside counselor, such as a family lawyer, adviser or social worker, join the meeting and help keep the mood calm.

HOW TO PREPARE Before the family meets, draw up a list of questions you want answered. They should cover whether your parents have a will and where they keep it and other financial documents, such as savings and investment account records, Social Security numbers, insurance policies, pension records, contracts and debts. You'll also want to know whether they have enough savings to fund their retirement (the worksheet on page 90 of MONEY's June 1991 issue can help). You don't need to know precisely where every penny is invested. But try to learn enough to reassure yourself that your parents' resources are adequate -- and diversified. And, naturally, don't forget to find out the names and phone ; numbers of any financial advisers your parents use -- such as accountants, brokers, planners or attorneys. It's also an opportune time to ask health questions. Have they prepared a durable power of attorney in case they can't make medical or financial decisions themselves? Do they have a living will that specifies the circumstances under which they want life-sustaining medical treatments discontinued? And have they set aside cash or bought a long-term-care insurance policy to cover nursing-home costs, which average $30,000 a year these days? (For details on some new policies, see Money Update, page 38.)

HOW TO KEEP THE TALK ON THE RIGHT TRACK Before the group starts talking, select at least one note taker to record the discussion and list any items that may require follow-up, such as who was designated to have power of attorney. Begin with everyone expressing good will, conscientious motives and a willingness to listen carefully to the parents' wishes. While this may sound Pollyannaish or unnecessary, it will set the right tone. Too often, notes social worker Kipp, ''children try to make financial decisions for their aging parents because they think they know best. That's a recipe for resentment.'' Handle the basics first, suggests Michael Cunningham, an associate professor of psychology at the University of Louisville, such as finding out where records are kept. The difficult and more sensitive topics, says Cunningham, such as questions about nursing-home care, powers of attorney and living wills, should follow along later.

OVERCOMING THE EMOTIONAL ROADBLOCKS Even with all this preparation, fears and concerns may make you uneasy. In that case, language, tone and how you frame questions can be critical to keeping everyone willing to talk. If you worry about seeming greedy, for instance, make it clear that you're acting out of concern, not self-interest. ''The key is for the child not to say, 'Tell me how much money you have,' but instead to say, 'Do you have enough money for your needs?' '' advises Mark Bass, a financial planner in Lubbock, Texas. Both parents and adult children must be frank in expressing concerns, says William Kipp. But stay away from an aggressive approach that may sound like a power play to your parents. Explains Kipp: ''You should say, 'I sometimes feel there may be some financial problems you're facing.' Don't say: 'I know you have this problem, and I want to help you with it.' '' In short, sums up Kipp, ! do all you can to maintain your parents' dignity and independence.

BE SENSITIVE TO CONFLICTS IN INVESTMENT PHILOSOPHY Offering investment advice is fine, provided you don't criticize your parents' decisions in the process. ''When you start telling people they've done the wrong thing,'' says Robert Atchley, director of the Scripps Gerontology Center at Miami University in Oxford, Ohio, ''you've stepped over the boundary.'' People in their sixties and older tend to be less comfortable with risk and more interested in conservative investments, such as U.S. Treasury bills and certificates of deposit, that provide a lower yield in exchange for a guaranteed principal. That's certainly the case for Robert Sheffield, 66, a retired Boeing engineer who lives in Peoria, Ariz. with his wife Anita, 55. ''My son and daughter and their peers are more acclimated to the credit business and to taking more risk,'' says Sheffield. ''I lived my youth in the Depression. You hedge more. You try to keep yourself in a position where you don't lose a lot by extending yourself.'' Above all, no matter how much you disagree with your parents' financial decisions, remember that while they are healthy and capable, your participation in their money matters is by invitation only. ''Children may not like it,'' says Florence Kaslow at the Florida Couples and Family Institute, ''but it's perfectly legitimate for parents to say, 'This is not something we choose to talk over with you.' ''

SMART WAYS TO FOLLOW UP After the meeting, it's important to review the notes and act promptly on any decisions that were made. That may mean checking on the costs of long-term- care insurance. It may involve setting up a second conference, this time with a lawyer or financial planner present to answer questions about estate planning and other matters. If the children have several tasks to do, try dividing up the jobs based on skills and geography. But remember: let your parents continue to perform whatever activities they can still handle for themselves. Shirley Miller, 69, a social worker living in Fort Lauderdale, began paying bills for her mother Jennie Gross, 93, who lives in a nearby retirement home, after Gross admitted she was having trouble keeping track of her bills and papers. But the checks still bear Gross' name, and Miller always gives her mother the opportunity to review and sign them. Gross also signs the admission papers whenever she needs to be in the hospital. ''My mother was a bookkeeper,'' says Miller, before going on to the important point: ''I don't want to take anything away from her that she's capable of doing.'' Treading that line between helping and controlling isn't easy. But that's how you can handle family financial matters in a way that benefits the whole family. ''Sometimes,'' says Miller, ''adult children forget their parents are grown-ups too.''