Last month we discussed the difficult topic of, “Having the Talk with Your Parents”. This struck a chord with so many people and we had a very positive response from our contacts and connections. Therefore, this month we decided to turn the tables a bit and address the subject of, “Having the Talk with Your Children”.
Having the talk with your adult offspring about your finances and how you plan to distribute your assets after you’ve passed, as well as your final arrangements, should be a conversation you want to have sooner rather than later and should be coming from a place of trust and love.
The COVID-19 pandemic has made it painfully obvious to many families that life can change in a few short days, and without a plan in place your last wishes may not be fulfilled.
A recent study by MFS, a money-management firm, as stated in Kiplinger, found that the majority of Gen X and Gen Y respondents to a survey expected an inheritance from their parents to help with their own retirement, but less than half of baby-boomers agreed it was important to leave one.
For this reason, you must make it clear to your children what your plans are regarding your estate,
if you will need it to finance your retirement and end of life arrangements, as well as how you and your spouse will continue on when one of you is no longer around.
Many parents are reluctant to discuss how much money they have saved up because they don't want their adult children counting on a large inheritance. It can be uncomfortable for some parents to share specific information because they may also feel embarrassed that they haven’t saved as much as the children may have thought.
What You Need to Tell “The Kids”
Here is a list of several important areas you need to address when you are ready to have “the talk” with your adult children:
- The names & contact of all your professional advisors such as, wealth manager, stockbroker, CPA, attorney, and doctors
- Passwords and logins for all your online accounts including credit cards, bill payments, etc.
- The location of all your financial and legal documents such as wills, trusts, IRAs, savings accounts, stocks/bonds, insurance policies, health proxy, etc.
- Long term care arrangements if you are or may be left a widow or widower, and if you should become unable to make decisions, including possibly giving one of your children a POA
- Surviving spouse living arrangements and financial requirements
- If there is a family-owned business or involvement in a partnership, what succession plan and/or key man insurances are in place
- If there are still college-aged children, have you established a fund for the fulfillment of their education
- Share what your end-of-life wishes are so that your children do not have the burden of making those decisions on your behalf
- Discuss your legacy plans and charitable giving to any favorite foundations, universities, hospitals, or other non-profits
- Lastly, how you intend to distribute your material assets among your children and any other relatives, including cash, jewelry, artwork, home and vacation home, vehicles, collections, etc., and your reasons for doing so – this being most important so that there is no animosity amongst your heirs once you are gone
One more important discussion that you should have with your children if they have reached the age of majority, (which is 18 years old), and are unmarried, is about having them sign a Living Will & Power of Attorney (POA) over to you. This document will give you written permission to speak with a doctor or health care professional on your child’s behalf should something happen to them and they are unable to make decisions for themselves.
Perhaps I Can Help
As you can see, there is much involved in preparing for this talk with your children. If you would like some guidance, please do not hesitate to call upon me so that I can act as a quarterback for you. Together we can make some preliminary decisions that will help to put your children at ease while going through this process. When an outside professional is part of the discussion, there is less conflict and cooler heads prevail.
I hope you will not consider this information as only food for thought, but rather as fuel for action.
Having “the talk with your children” doesn’t have to be unnerving and is meant to give peace of mind and understanding to you and your children. And remember, it’s all about love.
Please feel free to share this with friends or family members who might benefit from this information. I look forward to hearing from you soon.
Saul Simon is a registered representative of Lincoln Financial Advisors.
Securities and advisory services offered through Lincoln Financial Advisors Corp., a broker/dealer (Member SIPC) and registered investment advisor. Insurance offered through Lincoln affiliates and other fine companies. Simon Financial Group is a marketing name for business conducted through Lincoln Financial Advisors.
Lincoln Financial Advisors does not provide legal or tax advice. CRN-3493512-031521