What Getting Involved in Your Parents' Finances Looks Like (Without It Getting Awkward)

It’s probably been taboo for a long time. Perhaps since your early childhood. Money and finances weren’t spoken about at all. You didn’t know what your parents earnt.

You just knew you had to save money (though you weren’t really sure what for, just the ‘future’). You began to realise it was present; that money was a thing that your parents spoke about with other parents in hushed tones, or probably not even that. And then you grew up.

But now you’re worried.

Your parents stopped working some time ago. It feels like it was just last year that they retired, but now you look at the calendar; it’s actually almost 8 years. Maybe more.

They’ve spent their time helping your children (their grandchildren) and that’s been fantastic. But your kids are that little bit older now, and you aren’t running logistics with your parents as much.

So, things are little quieter (between you and them…. certainly not for just you!)

And into that silence creeps a little bit of uncertainty.

• If your father had a major fall, would they be able to afford in-home care.

• Will they be able to get to do the ‘last big trip’ that they’ve dreamed about.

• And the groceries are expensive for you. Are your parents buying what they would normally, or are they cutting back, but compromising on health?

These unknowns create doubts. And in the back of your mind, now you’re starting to think that you might need to become a little more involved.

Why would you want to be involved?

Families and their relationships are complicated. And although they are all unique, there are some common strands that pull families along.

You might feel a sense of deep need to help support your parents, in whatever form that looks like. It can be hard to articulate, and you might even end up with a ‘just because’ reason.

You might feel a sense of obligation, of family duty. 

You might open up these conversations begrudgingly, secretly wishing you didn’t have to have them but being ‘adult’ enough to know that you should.

Expectations from your parents also play a role. They may want your help, or they may not. They may expect you to step in, or they may expect you to stay away.

They may not want to be a ‘burden’. They may be a burden without their choice.

So, a multitude of angles and reasons lead us to the situation where it’s established that now is a time to become more involved.

Let’s talk pragmatically

Initially, we advocate for making sure your own plans are in place first. Because it makes sense to have your own clarity and steadiness in your circumstances before your family responsibilities solidify.

This isn’t selfish, it actually makes the most amount of sense. Having your own situation understood allows you to focus completely on your parents, from a position of self-confidence and probably a bit more self-education.

We call it the Foundations First Framework; a guided process to put your own plan in place. Some may call it the ‘boring stuff’, cash flows, estate plans, insurance, superannuation, investment strategy. Our marketing spin though is to call it ‘Foundations’ and it is geared towards giving people a firm financial base to then feel secure enough to spend the time helping others.

Next, we’ll make the assumption that your parents are willing, to some degree, to get help from you.

The 4 x A's for helping your parents

At each stage of the process, keeping an empathetic and compassionate mindset is critical. Keep checking in for permission. Treat your parents like adults, too. Respect their boundaries. Involve your siblings if they want to be.

Awareness is the first step. This is getting an overall snapshot of your parents’ assets. Warning: There will be so much paper involved that you might consider buying your own shredder.

Authority comes next. Understanding who would help your parents, legally, if they couldn’t manage their own affairs, is important. You’ll be looking for their Will, Enduring Power of Attorney and Enduring Guardianship documents. If they don’t have these, this is probably your first action. Tread lightly here; some parents can think you’re ‘going for the money’ or trying to get them out of the picture. But at this stage, you’re just trying to get a ticket to the show, not to replace the actors. 

Access is then required. When authority is in place, begin the conversations now to get third party access to the various banks, platforms and professionals. Introduce yourself to their accountant, their lawyer, and their financial planner.

Action along the way. Through this entire journey, if the plans aren’t actually put into place, then it can be a pointless exercise. Use accountability partners and other techniques to make sure things are done.

Helping your parents with their own financial situation can be a confronting experience for everyone involved. We find though that it’s the uncertainty and fear of the conversations that is the hardest part, and that once it’s actually started everyone is appreciative of the outcomes. Avoid the ‘carpark conversations’ by engaging in the process now.

For more guidance on Family Wealth Pathway services for high-net-wealth family and individuals across Australia, book a chat with our team.

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Absolute Wealth Advisers are private wealth managers based in Sydney, serving high-net-wealth individuals and families across Australia. Through our Family Wealth Pathway, we deliver personalised best family wealth planning options, build healthy, empowered relationships with money, and create a legacy of purpose, values and balance.

The information contained in this article has been provided as general advice only. The contents have been prepared without taking account of your personal objectives, financial situation or needs. You should seek advice before making any decision regarding any information, strategies or products mentioned, to consider whether that is appropriate to your own objectives, financial situation and needs.