Having “The Talk”: Another Awkward Holiday Dinner Conversation

Have you had “the talk” yet?  Ya’ know, the really awkward conversation we all dread?  I’ve thought about having it during our Thanksgiving dinner, but I just don’t know how to begin. They’re so young…maybe I can wait a little while longer. I mean, really, how many their age are actually doing it?

Of course, I’m sure you know “the talk” I’m referring to: a discussion with your parents and grandparents about their financial and healthcare wishes should they become too sick to make them on their own.  It’s an awkward conversation to bring up (hey, pass the potatoes…by the way, what would you do if you can’t manage your own money anymore?), and even more awkward to continue (Uh huh. Can you give my brother all the bills but me all the cash? Great turkey, mom!)–but what’s the cost if you DON’T bring it up?

I’m writing this tonight while driving (read: riding shotgun) from Chicago with a world-class estate planning attorney who’s so busy he can’t keep his head on straight. With so many changes looming around the fiscal cliff and government tax plan, people are battening down the hatches. I thought I’d take this time to interview this young man as we barrel down the freeway.

So, Mr. Estate Planning Attorney, what are the most important things you need to discuss with your parents about money?

Can they give you some? Ha ha ha.  Well, first of all, with the estate tax going up, seriously, should they be giving you some money through a gifting strategy?  Also, have they grandfathered their estate exemption?

What the heck is “grandfather their estate exemption” mean?

It basically means: Have they taken advantage of the existing laws to benefit them, compared to their new laws expected in 2013?

What about “the talk?”  What kind of healthcare questions should we, as their children, know?

First, they need to know every state has a healthcare power of attorney and the forms can be found at the local public library. That POA lets them dictate who can make medical decisions if they’re not able.  Secondly, they should probably let you know, or you should ask, what their long-term health wishes are.  I mean…the weird questions like “Do you want life support” and stuff like that.  But all of that can be handled in their healthcare POA.

So, what happens if someone doesn’t have a healthcare POA?  And, while we’re on it, when should someone get one of these things?

Everyone of legal age should have one. If you don’t have one, doctors cannot follow your specific wishes regarding your healthcare. Also, if you’re unconscious, doctors cannot make healthcare decisions for you, unless it’s an emergency. For example, we had a client who went in for surgery, routine-type stuff, when the doctors found a small tear in his kidney. Without a POA, the doctors would have had to wake him up to get his permission. Now, thankfully his wife was waiting in the waiting room, and was his POA, so they were able to fix it no problem.

So we all need these things no matter what. Got it. Anything else we should know before year end?

The fiscal cliff is going to affect estate and income taxes. If you have more than $2 million,  you need to talk to your attorney immediately. Remember, that $2 million includes the death benefits from your life insurances through work and outside policies–it’s not just your assets.

Sounds like your calendar is filling up fast!  Thanks for your insight. Maybe we can get you on our podcast?

Would love it. 

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Author: TheOtherGuy

Full-time financial advisor, part-time blogger, part-time podcaster. Hangs out in Joe's basement a lot. 2 Kids. Despises snow.

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20 Comments

  1. My wife and did a lot of this for ourselves before we had our last child. Some might think it was early for us, but I am a big planner and wanted to make sure we had it covered. I do agree that having that discussion with your parents is a tough one. We have one set who has everything set & on the right track and the other wants nothing to do with it.
    John S @ Frugal Rules recently posted..Are Large Companies Immune to the Fiscal Cliff?My Profile

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  2. Since I work at a mortuary, I know that having a “talk” like this is so important! Let’s face it…everybody’s going to die. Might as well plan ahead. I have a guest post coming out tomorrow at Get Rich Slowly on a similar topic- “Preparing for the Inevitable.” It’s something that no one wants to talk about.
    Holly@ClubThrifty recently posted..The Amazing Power of DebtMy Profile

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  3. This is definitely a difficult topic to bring up with the parental unit, but you are right: it must be done. I didn’t know you could get those forms at the library. Thanks for the info!

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  4. Great interview! It so happens we’re having an event tonight for our clients in which an estate planner will be speaking about these precise things. My wife and I need to get on that POA…it’s one of our goals this quarter.
    Jason @ WSL recently posted..Recipe: Bacon and Egg MuffinsMy Profile

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  5. There is a default person. If you’re married, your spouse is your default POA, unless you have something to specify otherwise, but if you’re not married, things can get complicated. It normally goes in the order of: assigned POA, spouse, adult children, parents, siblings.
    The thing is, if you have two parents, both have to agree on the care before the doctors can do anything. Doesn’t matter if you haven’t spoken to them in 10 years, doesn’t matter if they haven’t spoken to eachother in 20. They both have to agree on the course of care. Same if it’s your adult children. All of them- no matter how many there are, no matter where in the world they are, the hospital must receive permission from each and every one of them before doing anything.
    When my brother took a job in Australia, I really pushed both my parents to set up POAs. My mom was a widow, and while my father is married, there could easily be a car accident that incapacitated both him and my step-mother. I told them I didn’t care if it was me, my brother, a step-sibling or some randome person, they needed to designate one person be able to make their medical decisions.
    As for financial, it was actually very helpful with the MIL for DH and I to have dual POA, so that either of us could deal with bills and banks, etc.
    But really, the advice is spot on. Anyone of legal age should have a POA picked out if you don’t have a single default POA that you trust to make those decisions (like a spouse).
    shanendoah@the dog ate my wallet recently posted..A Story of Immigration & HealthcareMy Profile

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    • Great points, Erin! My only comment is to remember that the “default” person is based on state law and each state can be different so make sure you know who that “default” is in your state!

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  6. We’ve heard a bit about your fiscal cliff over here, as part of the coverage of the presidential election. Seems quite a deal – at least for investors and those with property. It does seem a strange way to run things though, to leave a time bomb that explodes in your face! A bit like the Gunpowder Plot of 1605….

    But having different laws about the default person in case of medical need in each state must be a nightmare. Does this mean that if you are visiting another state, you will need a separate POA? Or is this only if you don’t have a POA???
    John@MoneyPrinciple recently posted..Beyond ‘I told you so’ is ‘Ouch!’: Paul Knott’s epic book about finance and so much moreMy Profile

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  7. That talk was easy compared with the day I had to tell my mother she had to give up her car. Cars are independence for all of us and it is no less for old people. My mother was in her early eighties and had a few accidents close together. They were minor, but there was a trend. The last straw was when she went on the freeway in the wrong direction. Luckily, she never went further than the on ramp, but it was enough.
    krantcents recently posted..Retirement and a Stool!My Profile

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  8. I have tried indirectly to get my parents to meet with someone and set up a trust. They have a will that was done about 25 years ago. My mom is open but my dad just won’t go there. He doesn’t think he’s ever going to die, even though he’s had a stroke and two aneurysm repairs. My in-laws don’t have anything other than their cars and furniture, and they would never do a will I don’t think. Maybe as they get older, they will change their minds. Otherwise, I guess we’ll just have to deal with it.
    Kim@Eyesonthedollar recently posted..Being Thankful and a $100 Giveaway!My Profile

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    • Is there a specific reason why they’d need a trust over a will? Possible nursing home stay for your dad? Unless they have a significant net worth, a will might still be the best way to go.

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  9. Hmm…looks like I have some awkward Thanksgiving conversation starters. Seriously, though, I should have the talk with my mom (even if she’s too young to be doing it).

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  10. Haha, I was going to say, absolutely not the Thanksgiving Dinner table is not the place to have the birds and bees talk with the kids. I think mine are still too young to think about broaching this conversation. It would be a good idea to ask about POAs, though.
    femmefrugality recently posted..Help me earn a $10,000 scholarship!My Profile

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  11. Most people don’t talk about it. But being a very transparent family, we talk about death like it’s a normal occurrence. My youngest son openly expresses his views, like, hey guys, I think if you die I would just have you cremated, or topics to this effect are often discussed at dinner time. Weird? Maybe, but I see it as just being pragmatic.
    CreditDonkey recently posted..Disney Rewards Visa Card ReviewMy Profile

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    • Hopefully that’s because they have it taken care of appropriately. OG didn’t mean to ever imply there was an age limit.

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  12. I’ve had the “talk” with my mom and she agrees with me, but she has yet to get all the documents I worked so hard to create motorized. I’m pissed :/
    Dominique Brown recently posted..Do You Have A Big 3?My Profile

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  13. I wrote a great piece on this about a year ago and what’s most important among Gen X’ers today is figuring how who is actually going to take care of Mom and Dad. Now that their parents are turning 70, it’s time to figure out which kid is in charge. It’s even more difficult today as career choices have spread out siblings across the country.

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