A few months ago I joined Doc G and Paul Thompson of the What’s Up Next? podcast for a panel discussion about a family financial problem:
Our panel included Cameron Huddleston, whose book “Mom And Dad, We Need to Talk” has been out since June 2019. She’s taken care of her mother for over a decade of Alzheimer’s Disease. A few years before when Cameron was drafting the manuscript, she interviewed me for over 90 minutes about managing my father’s finances.
We were joined by Stephen Chen of New Retirement who discussed how he started his retirement calculator company after helping his mother figure out her retirement finances. He’s had lots of feedback from his thousands of clients, some of whom are dealing with aging parents who are reluctant to discuss their wealth and their estate plans.
We heard from Jen Smith of Modern Frugality with stories of her mother’s financial difficulties, which her Mom didn’t share until it was too late. You can listen to that audio snippet here:
The six of us talk about our family experiences of sharing our financial situations and our plans with our parents. Everyone worries that Mom & Dad might want (or need) our help, while we’re simultaneously concerned that our parents will think we’re invading their privacy or even trying to take away their control.
We also spend most of the podcast talking about ways to start those awkward conversations. Cameron’s book is filled with scripts for opening the subject and sharing your own financial concerns before bringing up your questions about your parents’ finances.
It’s a difficult conversation. You won’t want to talk about it with your family, and you’ll keep putting it off. When you finally do bring it up, your parents won’t want to talk about it either. They might not only put it off but could even shut down and be offended at your apparent intentions.
But if you think that parental conversation is hard, let me share the consequences of not having those talks.
Getting “the call”
Nine years ago this month, I got the 4 AM phone call from my father’s hospital. Dad, a widower since the 1980s, was recovering in the ICU from repairs to a perforated ulcer. The surgeon said Dad had shown up in the Emergency Room shortly after midnight, incoherent with pain. Dad lost consciousness as the ER team frantically tried to check for a heart attack and to do a CAT scan for other clues. By the time they discovered the hole in his duodenum, the situation had deteriorated to thoracic “slash and mop” only minutes before it was too late. The trauma doc was exhausted after spending the night saving Dad’s life, and he had a lot of questions about Dad’s dementia symptoms. How had his situation become so dire?
Months later, I figured out from Dad’s medical records that he had first felt his “slipping memory” in mid-2008. In late 2009 he told us he could no longer use his computer, and we realized that he was dealing with dementia. He refused all offers of help (I explain why in the podcast) and he lived independently in his two-bedroom apartment until February 2011. He recovered from the surgery (and malnutrition from poor self-care) and spent over six years in care facilities before passing away in late 2017.
Figuring out the money
While Dad regained his health in the care facility, my brother and I spend over $10K of his money on legal fees to be appointed his guardian and financial conservator. I also covered another $25K of Dad’s bills at the care facility while we argued with his insurance company about the claim on his long-term care policy.
During the 10-month legal process, Dad’s pension and Social Security deposits piled up at his local bank and his investments continued in autopilot. It was only two years after the bottom of the Great Recession, and Dad had let his asset allocation drift to 85% equities and 15% bonds. This is not considered the optimal asset mix for a potential decade of long-term care expenses, but I couldn’t legally do anything about it.
While Dad was in the hospital I knew nothing about his finances, and I didn’t have his computer password or any of his account logins. (Dad could no longer remember any of his finances, and he hadn’t paid his bills in several months.) After many hours of research I was able to figure out most of the picture from the four-drawer file cabinet in his small apartment. By the end of 2011 I had a conservator’s appointment and the legal authority to sort things out. It took several more years before I was sure that I’d found everything and had solved all of the mysteries.
During Dad’s first few years in the care facility, one of his perpetual conversations was his worry that he couldn’t remember how to go back to his apartment to pay his rent and his other bills. We always assured him that he’d left us a complete set of records and we knew what to do. We told him that he had plenty of money, and we were able to take care of everything. When he heard this, we could always see the fear and concern drain away as his face relaxed into happiness. We had a lot of practice at it because he’d replay that loop at least hourly.
In retrospect, we realized that Dad had probably been living with depression for decades. Alzheimer’s freed him of that for him to enjoy some of the happiest years of his life. He passed away in November 2017.
Doing the annual paperwork
It’s an ironic coincidence that the podcast episode was posted this week. This used to be the peak of my busiest financial time of the year.
From 2011-2018, the months of December through March were crazy stressful. Along with the holiday
drama gatherings and celebrations, I was taking care of two sets of family finances. (I had the easier part. My brother was handling Dad’s day-to-day concerns at the care facility, his medical exams and prescriptions, and his deteriorating symptoms.) As a typical member of the sandwich generation I was wrapping up our annual Marge & Doug financial chores, helping our daughter manage the college fund, and gathering Dad’s year-end financial data. I’d easily spend 10 hours of January putting together Dad’s annual report for the probate court on their particular forms: a full checkbook register, a balance sheet, and projected expenses.
All of that was subject to the critique of the probate court before they’d extend my appointment for another year. There was a perpetual implied threat of being “fired” and replaced by a court-appointed professional conservator– for a suitable fee charged to Dad’s assets.
One year our reports were lost on the court’s computer network and we were declared late. I was on travel and only learned about the judge’s summons (mailed by letter) when my brother called for help. (I was managing Dad’s affairs from Hawaii and wherever we traveled, but the Denver probate court required me to voluntarily waive extradition and appear at their behest as a condition of my conservator’s appointment.) When I e-mailed the court the U.S. postal receipt from mailing in my report, the probate clerk miraculously found our “missing” documents and got them (back) on the network. The judge canceled our summons.
In two other years the court rejected my report’s analysis and asked for a new financial projection… with another 10 hours of filling out their forms to reach a different conclusion.
In between dealing with the annual reports and the probate court, I was also doing two sets of income taxes. (By this time our daughter was handling her own income-tax returns with only an occasional question.) Dad’s deductions usually wiped out all of his taxes, but I still had to carefully adjust his asset allocation without triggering IRMAA’s higher Medicare premiums.
Even when I got the reports and tax returns under control there would be other “surprises”. The long-term care insurer would change a reporting requirement, or Dad’s medical insurer would decide that his prescriptions needed a new round of reviews and approvals before January’s refills ran out. The conversations seemed to repeat themselves every year: Why yes, yes I did want the bills sent to a Hawaii address and the medications sent to a Denver address. No, the care facility would not do prescription refills via the U.S. mail. You claim you can’t talk to me because of HIPAA patient privacy?!? Did you want me to pay your invoice or would you rather debate my appointment with the probate court? Well then.
And each year when the paperwork was finally finished…
Maybe my conservator’s appointment would be extended so that we could do this next year. No pressure.
By the time April started, I was usually burned out on all the paperwork and wincing at every official letter in our mailbox.
You know what makes this paperwork even harder? Settling your parent’s estate after they pass away. It was another six months after Dad’s death before I could process the conflicting emotions of grief and relief.
2019 was the first time in eight years that I was able to relax over the holidays without dealing with reports or income-tax returns or other caregiver financial issues swirling around in my head. This year has been much better, although I still feel the sad memories of the stress. I’m pretty sure they’ll fade over the next few years.
The next generation(s)
My father only visited his granddaughter three times in over 18 years before Alzheimer’s took his cognition. He was attentive with holiday cards & gifts and the occasional letter, but he never really connected with her as much as I connected with my grandparents. My daughter’s memories of Grandpa Dean have to come from my stories and our family photo archives.
Now that I’m a rookie grandpa, I’m going to help my granddaughter enjoy having her grandparents in her life. As you’re reading this post, we’re getting ready to spend a month of bonding over bottles and diaper changes.
As you might imagine, Marge and I also have some pretty firm opinions on our estate planning.
If the time comes for our disability care, our daughter will have all the powers of attorney and financial tools she’ll need… without gatekeepers and with minimal caregiver stress.
Our family had our own difficult conversations, but now our daughter knows that we’re not going to dump these issues on her new family. It’s given her a tremendous sense of relief and reassurance.
We hope that our experiences will help you have those talks in your family.
Your Call To Action
Please listen to the podcast. (You’ll enjoy our rotating conversation!) Use the resources we explain during our Q&A, and figure out how to have the hard conversation with your parents. Do it while you still can. Believe me, it only gets harder if you put it off until later.
Maybe you can jumpstart the conversation by sending this post (and the podcast) to your parents. Share what you’ve done for your estate planning, and then ask them what you need to know about theirs.
The Military Guide to Financial Independence and Retirement Price: By Doug Nordman: This book provides servicemembers, veterans, and their families with a critical roadmap for becoming financially independent.