Mom and Dad, We Need to Talk with Cameron Huddleston
I get requests almost daily for people to come on my show, specifically to talk about books they’ve written. Most of the time I say no, because I’ve checked out the book and wouldn’t recommend it to my worst enemy, or the topic is not something that I believe all of you would want to hear about.
When my friend Cameron Huddleston reached out to me to tell me she wrote a book, I knew right away I wanted to have her on the show, because this is a book and topic we all need to know about. Cameron is a financial journalist and author of the book Mom and Dad, We Need to Talk: How to Have Essential Conversations with Your Parents About Their Finances. This is a topic that not only hit me personally, as you’ll hear, but also I deal with this a lot in helping my clients plan for their future. If you’re parents are still alive and in your life, this is a podcast you won’t want to miss.
What Are We Drinking?
Cameron — Bourbon on the rocks
Shannon — Grapefruit Schweppes & Vodka
- Cameron has been a personal finance journalist for 17 years. She has been a journalist for even longer and she never thought she would write a book.
- Cameron writes articles that are typically around 1,000 words and writing a book with 50,000 or 60,000 words seemed like so much. Even though she could have written 100 books with all of the articles she has written in her life, the idea of a book just seemed overwhelming.
- Cameron went through something in her life and she realized there were a lot of people that were going through something similar, or would be going through something similar, and she could help them by sharing her experience.
- It doesn’t matter how old you are, talking to your parents about money is challenging. Money is a taboo topic and people are afraid to have these conversations or they don’t realize they need to have these conversations.
- Cameron was 35 when her mother was diagnosed with Alzheimer’s, and one of her big regrets was that she had not talked to her about her finances.
- At the time, she was writing for Kiplinger’s Personal Finance and she had moved from Washington D.C. to her home state of Kentucky.
- Cameron was living across the street from her mom and said that she should look into long-term care insurance. Her mom met with an insurance agent and unfortunately, she had another pre-existing health condition that made her too much of a risk.
- Cameron feels like she should have talked to her mom then about the assets she had to cover long-term care if she needed it.
- Shannon talks about money all day long and she finds it difficult to talk to her parents about money too. Shannon did talk to her mom about money when her mom moved in with her a few years ago.
- It is one thing if your parents won’t open up about it, but somebody needs to take care of things if something happens to them.
- Shannon has a stepfather who will not talk to her about money. It is her job and she is an expert, but it is still challenging talking to parents about money.
- It’s not so much about getting the details, it is talking about those financial issues. The Power of Attorney (POA) is really the biggest one, because you need to be mentally competent to sign it.
- When Cameron saw her mother losing her memory, she told her they needed to go in and update her legal documents. She was competent enough to name Cameron and her sister as her POA and update her will.
- Meeting with the attorney opened the door to having those conversations, because she gave them suggestions about what they should be doing going forward with her mother and her finances.
- Without that POA, Cameron would not have been able to do anything for her mother.
- There are different types of POAs, but you want the most robust, where you can open and close accounts. You don’t want a limited one.
- If you have not talked to your parents about money, you need to start. It doesn’t matter if you are 18 or 60. You need to start having a conversation, because at some point you may need to be involved in what is happening in your parents’ financial life, whether providing financial support or if they become incapacitated.
- The likelihood of you becoming involved as a child in your parents’ finances is pretty high.
- If you are not involved in their finances when they are alive, you will probably get involved when they die, because you have to deal with everything they left behind.
- When your parents are in good health, have these conversations. You don’t want to have these conversations when there is a crisis because you have fewer options to deal with the crisis. If they have not named you or a sibling or someone else as POA, nobody will be able to step in and help them with their finances or make healthcare decisions without going to court.
- The cost of the legal documents now is much less than the court costs later.
- Cameron lists 10 different ways in her book to talk to your parents about money.
- If you are in your 20s and just starting out, the best way to do this is to ask your parents for advice. Even if you are in a situation where you are financially savvy and your parents are not, it’s okay. Just pretend. Should I get life insurance? Should I get a will? Should I save for retirement? This will open the door for them to share what they have or haven’t done.
- You want to be very tactful and respectful in these conversations and you don’t want to push too soon or too hard for details. It isn’t about how much they have in their bank account it’s about where they are banking. You need to know if their bills are paid automatically or if you need to write a check. If something happens to them, you need to make sure those bills get paid.
- It isn’t “How much have you saved for retirement?” it is “What does retirement look like for you?”
- If you are in your 30s, you can use a story. By that time you have a story you can share about a friend whose parent died without a will, or a colleague who had to stop working to care for an aging parent.
- There is a good chance you have a story, or you can borrow one: My friend Shannon’s mother lost her job and couldn’t financially support herself and at 63 she had to move in with Shannon. I want to make sure our family does not end up in a similar situation.
- Seventy percent of Americans live paycheck to paycheck. Your parents could likely be in this boat and what happens if it is before the ability to collect Social Security? How are they going to support themselves if something happened? You might need to get involved before Social Security.
- You don’t want to scare them, but you want them to realize that bad things can happen if you don’t have these conversations.
- The first time you bring it up they may not be eager to talk about it, but that doesn’t mean you should give it up. Find a different approach, use a story, use what-if scenarios, or use an event.
- If your parents are a lot older and you are already in your 50s, you can send them an invitation to have a conversation with you. It is a polite and respectful way to do it and it is better than putting them on the spot. You are laying out the reasons why you want to have the conversation in the invitation and giving them time to think about it. They may be more willing to open up and have that conversation with you.
- Nearly half of adults between 50 and 64 don’t have a will. Another good conversation is if they have a will. You may not need to be involved now, but you want to make sure they have a plan if something happens.
- When you bring up the topic of a will make sure it is framed in a way that talks about their wishes, not because you want to know what you are getting. Make it clear that you want to make sure they have something in writing that spells out their wishes, because if they don’t have one, the state will decide for you.
- It is so stressful to bury anybody, and it is added stress if you don’t know their wishes. Have the conversation with the people closest to you.
- Never assume that your parents are on top of everything. Cameron’s father was an attorney and he didn’t have a will. As difficult as it is to talk about death, asking about your parents’ wishes is certainly a way to start the conversation.
- If you think at some point you will need to get involved, you need to be having these conversations. You have enough stress in life. You can have these conversations now.
- Your finances could be involved, especially when it comes to long-term care. Most people do not have long-term care insurance and Medicare doesn’t pay for long-term care.
- There are so many things that are known that you can plan for, but long-term care is the biggest unknown and if someone will need it.
- The national average of monthly cost for long-term care is $5,000 for assisted living or in-home care. Nursing home care is about $80,000 to $90,000 a year.
- If you say you cannot afford long-term care insurance that costs $200 or $300 a month, depending on coverage and your health, how are you going to afford $5,000 a month for assisted living?
- There are other options. You can get life insurance with a long-term care benefit. You either use it for yourself for long-term care or your kids get the death benefit.
- You can get an annuity that is geared toward long-term care coverage or you can save the money on your own.
- Most people don’t do any of these things and their kids are their long-term care plan. You need to know if your mom and dad have resources to pay for long-term care, because if not, that will affect you financially.
- Being a caregiver is a full-time job.
- The long-term backup is Medicaid that would provide the assistance, but there are so many parameters with it. Medicaid will take your parents’ Social Security and they will have access to their assets. There is a clawback provision where if your parents pass away and you sell their house, Medicaid can take the money back after the fact.
- Even if your parents saved for long-term care, you need to know what they have done. They may have the assets, but the assets you choose to liquidate for their long-term care, there are tax implications. There is a certain order that you should follow to draw down the money. You need to be strategic.
- If you don’t talk to your parents, you may have less money for their care because you are losing a lot of it to taxes if you are not withdrawing it properly.
- What happens if you need to use their assets to support your parents’ needs and you don’t have access to them because you don’t have POA? You need to go to court and spend thousands of dollars putting your parent on trial proving they are no longer competent.
- If you are named conservator, you need to file a report with the court every single year, spelling out how you spent your parents’ money. As a POA, you don’t need to do that.
- The importance of a POA was the biggest lesson for Shannon, when she was at Merrill Lynch.
- The consequences of not having the conversation with your parents are so much scarier than the conversation. If you have a good relationship with your parents, what are you afraid of? They aren’t going to fly off the handle or get angry and disown you. They might be reluctant and it may take awhile for them to be comfortable. Sometimes it can take years. Take those steps and slowly open the door.
- If you are a parent, please talk to your kids about your financial situation so you can help them in reverse.
- One of the easiest ways to approach this conversation is by talking about scams.
- The one thing you don’t want to do is let your parents think scammers are targeting them just because they are old. You want to frame it that scammers target people their age because they are retired and have a large source of money and they see them as a cash cow. Scammers are counting on them to stay on the phone because they were raised to be polite.
- Red flags: getting a call from the government (IRS or Social Security), getting a call telling you that you won a prize and you need to wire money, getting a call that your child or grandchild is in prison, etc. If your parents are single, talk to them about sweetheart scams. Go over the red flags with them.
- If your parents don’t talk to you about sex, you will figure it out. If your parents don’t talk to you about their finances, you will not figure it out on your own. You need to get the information from your parents.
- If your parents are reluctant to give you the information, ask them to write it down. Make a list of the accounts and passwords and keep it someplace safe where you will be able to find it.
TAKEAWAY: My biggest takeaway is to take a moment and think about whether or not your parents’ financial future will impact your own. If you know that you will have to get involved in some way, shape, or form, then you need to start finding ways to talk to your parents about their finances sooner than later and Cameron’s book is an amazing resource for this.
Random Three Questions
- What is the one thing you wish you could have done differently and you wish everyone would know?
- What is a show that you like to binge watch?
- What do you do to relax?
Connect with Cameron
If you’d like to talk to my team at the Financial Gym to help you financially prepare to help your parents out, I hope you’ll reach out to us at the Financial Gym. The great news is that Martinis and Your Money listeners get 15% off Financial Gym services. So head over to, or send friends to, financialgym.com to get signed up today.