I believe in planning for the worse and hoping for the best. Money conversations between parents and adult children can be difficult. Don’t wait for tragedy to strike before talking about issues such as your parents’ estate planning wishes and elder care issues.
Initiate the conversation early while both of them are healthy. Don’t be shy about bringing up detailed questions. Like “have you updated your wills lately’? How about power of attorneys for financial and medical matters?
Before going on a vacation, my wife and I would tell our kids “The will is in the safe” It was not intended to scare the kids but to let them know that we have planned ahead. We inform them that in the safe was a contact list for our insurance agent, lawyer, accountant and investment advisors. We also included an inventory of all assets and liabilities.
Assets and liabilities to inventory could be:
- real estate (residence, vacation home)
- retirement accounts
- insurance policies
- interest in a business
- checking and savings accounts
- safety deposit box number and location of the keys
- art and collectibles
- credit card debt
- other loans outstanding
Don’t be surprise if your parents refuse to discuss exact figures, in their minds you are still children. However, it is important that they compile the information so that the surviving spouse or children can deal with financial and medical matters.
These issues can be really difficult
- Where will the money come from in the event of a long-term care situation?
- Who will take over your parents’ financial affairs in the event they become unable to do so?
- What are your parents’ wishes, including disposition of their assets upon their death, burial, staying in their home, etc.?
- How to transfer your parents’ wealth to the next generation to avoid taxes?
If you are like me and have already lost one parent, you can not delay in having “the talk”! There are no issues with my siblings as to who does what because I am an only child. No doubt, this will be a difficult situation with siblings. Getting everyone to agree on a course of action will take time and be prepared for some conflict. Check your emotions at the door and do what is best for Mom and Dad.
At the end of the day, what is really at stake is the opportunity for parents to communicate their wishes to their adult children and for children to help their parents make those wishes come true.