How to have 'the talk' with aging parents about money

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Talking about money with one’s parents isn't usually an appealing encounter — but as more millennials and Gen Zers find themselves with aging parents, these discussions are becoming increasingly important.

“The talk” about an aging parent’s finances and end-of-life plans can be the key to ensuring long-term generational wealth — especially since most wealth doesn’t last longer than three generations, according to Dr. Lazetta Braxton, founder of Lazetta & Associates and the Real Wealth Coterie.

“When you don't have the benefit of having substantial wealth that is taking care of multiple generations … you have to disclose about where everybody is, because if you don't know, then the risk of the unknown can be catastrophic,” Braxton explained on Yahoo Finance’s Decoding Retirement podcast (see video above or listen below).

Tips for initiating conversations about money

Financial discussions have long been considered taboo, especially for older generations. That's why younger generations often find themselves responsible for initiating these sensitive conversations.

Instead of approaching "the talk" as one tell-all discussion, Braxton encouraged people to think about it as a “series of conversations.”

"It's not interrogating a parent," Braxton said. "It's giving them the opportunity to be proud of what they've done, even if they haven't done all the things they really had desired to along the way."

For starters, she recommended that younger generations consider how uplifting the environment is before initiating a conversation with their parents.

Often, details about an elder’s power of attorney for healthcare and assets aren’t discussed until a major life event or crisis occurs, which can make financial discussions strenuous.

Instead, it’s best to start these conversations with lower stakes, Braxton said. She warned that approaching the discussion during a high-stress time “could reset the conversation for decades.”

It also may be helpful to have a third party, such as a financial planner, present when discussing more gritty details, as they can provide the facts and act as a neutral player in the conversation, Braxton said. Having a professional be a part of some of these conversations can also help define and outline some of the more confusing terms a person may not know going into the conversation.

“It's so important in terms of building relationships ... [to] know the trigger points and the glimmer points,” Braxton explained. “The trigger points ... [shut] a family member down and the glimmer points ... [give] them comfort and trust to say it is safe to talk about these conversations.”