06/07/2011 05:52 pm ET | Updated Aug 07, 2011

5 Essential Questions to Ask Your Senior Parents

It's one of those awkward conversations that no one looks forward to. Discussing mortality or disability is not something anyone likes to do over lunch. But getting a handle on your aging parents' finances is something you must not put off. It's important to develop an open, trusting relationship with them regarding their assets, special personal treasures and money well before they become ill or impaired, to ensure that they are taken care of and that their wishes are honored.

At your parents' stage of life, they may have already lost friends or people very close to them. So the concept of being prepared for one's own demise has certainly crossed their minds, and they may be more receptive to having "the talk" than you think.

Once you've broken the ice, the best way to begin is with the basics. Here are five questions that will help you get a handle on their situation and point of view and put your parents' affairs in order when the time comes.

1. Do you have a will?

According to a March 2011 Harris poll, 22 percent of Americans over 65 don't have a will. If this is the case with your parents, their wealth and property will be distributed based on the laws of their state and the whims of a probate court. It takes just a few hours and costs between $50 to $500 to get a basic will (no trusts) prepared, depending on whether you use a software package or an attorney. And remember, you need a will for each spouse.

2. Where is your safe deposit box, and where do you keep the key?

Find out where they keep their safe deposit box, how to gain access to it and what's inside. A lot of people put their will in a safe deposit box, but this isn't the best place, because it usually takes a court order to retrieve the contents if the safe deposit box holder dies. To avoid this complication, make sure the box is owned jointly by a surviving parent or you. Or, ask if you can have your name added to the signature card, so you can access the box on your own in the event of a parents' death.

3. Do you have jewelry, cash or other valuables hidden in the house?

Many people who grew up during the depression stash their valuables under the mattress or in a special hiding spot at home. It's not uncommon for these items to be lost, thrown out or found as "treasure" by the home's next owner.

4. Where do you keep key documents?

Know where financial documents such as wills, trusts, investments and insurance policies are located. You may want to keep a summary sheet of assets, liabilities, income and tax reports as well. Pull together your parents' medical histories and have them fill out HIPAA-compliant authorization forms for release of medical decisions, information and care. Ask them to find or create a legal document such as a living will, advanced medical directives or durable power of attorney that spells out specific end-of-life instructions and informs both their health care providers and family regarding their desires for medical treatment in the event that they're unable to speak or take action for themselves.

5. Who is your financial advisor, and how does he or she manage your savings and investments?

It's important for you to not only know who is managing your parents' investments, but also to have an understanding about your parents' values and desires regarding the distribution of their assets. You may be surprised by the discussions you can have with your parents about the future and the legacy they wish to leave.

Once you've gone through these questions, you should have the basics organized. Then you can move on to cheerier subjects -- like what to have for lunch.

The information in this article is general in nature and may not apply to your own financial situation. Please consult your own professional tax advisor regarding this information and your own personal tax needs. For a complete disclosure statement, please see my biography.