By Rico Dilello
My training as a financial advisor got me into the habit of 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 financial matters regarding their 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?
You would be amazed at how many elderly couples rely on either the husband or the wife to take care of all their financial affairs. Should that person pass away, the surviving spouse has no idea where to find all relevant financial information.
I recommend complying a list that contains contact information for the lawyer, accountant, insurance agent, bank manager and investment advisor. The list should also contain details regarding all assets and liabilities.
Assets and liabilities should include location & account numbers:
- 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
- car loans
- credit card debt
- other loans outstanding
It is essential that they compile the information so that the surviving spouse or children can deal with all financial and medical matters. Make sure that the information list is stored in a safe place, like a safety deposit box or a fire proof safe in their home. Don’t be surprise if your parents refuse to share the list with you or discuss exact figures, in their minds you are still children.
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.?
- Talk to a tax specialist on how to transfer wealth to the surviving spouse or next generation to avoid taxes.
If you are like me and have already lost one parent, you cannot delay in having “the talk”! There are no issues with my siblings as to who does what because I am an only child. (My mother has already picked out which dress she wants to be buried in)
However, this will be a more 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.
Before going on a vacation, my wife and I would tell our children “The will is in the safe”. They were alarmed the first time we said it but over the years it became our good luck charm. Remember, plan for the worse and hope for the best!
By Rico Dilello