Does Your Family Talk About Finances?

Sharing financial information and working out future responsibilities is one of the most important conversations parents and adult children can have. In this article we outline some suggestions on the topics to cover.

Getting the conversation started can be difficult.  Children are usually reluctant to ask questions that may appear to challenge their parents’ ability to handle their own affairs, so it is generally up to the parents to invite the adult children into such a discussion.  The key is to set aside a specific time for the conversation and to inform the adult children so they may be prepared to participate.  Alternatively, some parents may prefer to have the conversation facilitated by their adviser who has assisted with financial and estate plans.

Below are a few ideas about what you might like to talk about:

Future Responsibilities
It is important for adult children to be informed of their responsibilities regarding their parents’ estate as well as any particular health care desires.  Often an adult child is named as the executor of the will or the trustee for a family trust.  Being knowledgeable of their future role and having an opportunity to ask questions of the parents before their responsibilities begin can be very helpful.

Medical Care and End of Life Choices
Parents should discuss their preferences for medical care with their attorney for their welfare power of attorney.  This is often an adult child.  The discussion should include desires regarding care facilities as well as their wishes regarding care if their health situation is terminal.  Having this conversation will reduce the anxiety created if the situation arises in the future.

Funds for Grandchildren
Any plans to assist with the financial needs of grandchildren should be shared with the adult children.  This could assist children and grandchildren with their own planning and will result in the best outcome for the grandchildren.

Charitable Intent 
Parents may include charitable donations in their estate plans.  It can be helpful for adult children to understand these plans so they can help with them, if necessary, in the future.

Information on Important Documents
Adult children should be aware of the location of important documents, such as wills, trust agreements, insurance policies, property titles and pre-planned funeral information.  The names and contact information should be provided for advisers such as lawyer, accountant and financial adviser and other individuals who play an active role in your financial planning.  A complete listing of assets and liabilities should also be maintained.  An important document that records this information is the Personal Register, which is available free of charge from MMG.  Your adviser is happy to discuss this process and hold copies in a safe place if you choose. 

Insurance Information
Insurance details can be helpful information for the adult child.  It may not be possible to discuss these policies if they are needed, so the information needs to be shared beforehand.

As difficult as it may be to start a conversation regarding financial, estate and health plans, doing so will prepare everyone to handle future situations.  It will make plans more meaningful and will allow adult children to be more confident in their future roles.