How to have the 'inheritance talk' with your parents

Talking about money is taboo. But asking your parents about your inheritance? That's a discussion more awkward than your seventh-grade school picture.

For many people, however, it's increasingly necessary to have that conversation. As Social Security and other safety nets wither, more and more young adults are depending — rightly or wrongly — on inheritance to help bolster their long-term financial plans. A shocking 62 percent of millennials expect inheritance to help fund their retirement. Unfortunately, many of them may be living on false hopes, as only about 40 percent of Baby Boomers expect to leave money to heirs.

Rather than build a retirement plan around a windfall you might never get, it's probably easier to just bite the bullet and ask if you've got anything coming to you. But how do you bring it up? And how pushy is too pushy? Here are some tips from the experts.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Pick the right time

A trip home for Thanksgiving might seem like the ideal time for a serious conversation. However, certified financial planner and Brunch & Budget founder Pam Capalad — who has counseled several clients through this process — advises against bringing up money over the holidays. "It's already a stressful time, and emotions are heightened," she says. "You don't want people saying: 'You want me to pull all my financial documents? I just wanted to have a nice Christmas!'"

Instead, choose a quiet time when not much else is going on, and introduce the topic casually. You could send your parents an article about financial planning or talk about the things you're doing to get your own financial house in order. "My clients often say, 'My financial planner has been asking me this question, and I thought it would be relevant to you, too,'" Capalad says.

She adds that you shouldn't expect to get all the answers in your first conversation — the process of getting a full picture of your parents' finances could take months, even years. If you encounter resistance, reflect on why your parents might have shut down, so you know to approach it differently going forward. "You're going to have to find different ways to bring it up," Capalad says.

While the process can be frustrating, she insists that for most families — parents and children included — conversations like these have good results. "So much of financial planning is life planning," she says. "It's extremely helpful to talk out what you want."

Don't make it about you

No matter how great your relationship with your parents is, straight-up asking them for a copy of their bank statement isn't going to go over well. Instead, it's best to fold financial questions into a broader discussion about their plans for their future health and well-being.

Start by asking if they've designated a power of attorney (POA) — a person authorized to make decisions for them if they become incapacitated — as well as a health-care proxy — a specialized POA for health-care decisions specifically. You should also ask if they have a living will in place that defines what kind of medical treatment they'd like to receive if incapacitated. If your parents don't have one or more of these legal documents ready, offer to help set them up. Then, broach the question of whether or not a regular will exists. If they don't have one, offer to set them up with a good estate planning attorney.

Anne Malec is a financial therapist — that is, a therapist who specializes in untangling patients' emotional relationships with money. She says that even without the financial element, these "adult" conversations with parents can be challenging. "The child goes from being a child to being an equal with their parents — the power dynamic shifts," she says. As such, children should proceed cautiously and keep the focus on parents' desires and needs.

That can include discussing things like how they want their bills paid if they end up in the hospital or what debts and additional properties they might need help taking care of in their old age. At that point, says Capalad, you might have a thorough enough financial picture that you don't even need to ask directly. If not, having these discussions about your parents' needs will make it easier to ask about their plans for you without coming off as callous or self-interested.

"For most people … there are many years where you're taking care of your parents before they're dying," Capalad says. "If you approach it from that perspective, it'll help open up the conversation in a different way."

Know when to hold back

But what if your parent says their finances are simply none of your business?

Malec says children should try to respect their parents' wishes here. "Money is a very weighted topic — so much of one's identity, self-esteem, and self-respect is tied up in how much you earn," she says. Pushing too hard can do more damage to the relationship than it's worth.

With reticent parents, however, it's still reasonable to ask questions about how your parents' money is being managed, even if they don't feel comfortable sharing the dollar amount. For instance, you might ask for the name of your parents' financial adviser (if they have one) so you can make sure their credentials check out. You might also show your parents what returns you're making on your own investments — if you have any — and ask them if their own returns are similar. And of course, if you suspect their finances are in trouble, it's okay to pry a little more deeply. After all, if they run out of money to support themselves, you'll likely be picking up the slack.

If nothing else, the process of asking your parents about your inheritance (or lack thereof) can be a teaching moment for you. "If someone dies it's traumatic, but it's even more traumatic if they don't have their financial house in order," says Malec. "You can assume your children will want to know these things, too — so what will you do differently from your parents?"