This year has been long and hard to say the least, yet somehow it is hard to believe that it is already December! Though the holidays are sure to be different this year, some of us are still planning to safely spend time with family in the coming weeks. If anything, 2020 has taught us how important it is to make the most of time spent with loved ones, and something often overlooked during family time is the value of having caring financial discussions. Whether you are a parent yourself or an adult child of an elderly parent, you may consider using this time to have hard conversations that matter.
Conversation Pointers for Parents:
If you are the parent of children, hopefully you have had conversations with them before about making financial decisions and good money management. Here are a few topics to consider as you look forward to spending quality time together for the holidays.
1. Assess your children’s financial maturity and responsibility. Children of all ages should be exposed to learning good money management. Whether your child is a teenager working their first job or a grown adult who may inherit your wealth in the future, it is a good idea to evaluate their relationship to money. Are they ready to assume the responsibility of the legacy you are preparing for them? If not, do you have a plan in place for designating an individual to guide them?
2. Consider an open conversation with your children about what is required to handle your estate. No one likes talking about death, but the repercussions of being ill-prepared when the time comes can be immense. You should make sure your plans are known for how your affairs will be handled. Are the people named in your legal documents (even if only as a backup) such as Trustee, power of attorney or health care proxy aware of their potential responsibilities? Have your final desires been expressly communicated to the appropriate individuals?
3. Encourage your children to develop a relationship with your chosen professional advisors. Have your children heard you talk about your financial planner or lawyer before? If not, should you do so now? It is important that your children feel comfortable with your professional advisors as they will have to work with them in some capacity eventually. Consider facilitating a meeting, even just over the phone, so that the two parties have a chance to introduce themselves. This will lead to better communication in their future engagements and help your children feel more prepared for any responsibility they may eventually have.
Conversation Pointers for Grown Children:
If you are a grown child with older parents, there are a lot of concerns you may have about your parent’s health and financial wellness and safety. Especially considering this year’s unexpected challenges, perhaps some of the following talking points could be beneficial for your family to discuss.
1. Evaluate the health and mental acuity of your parents. Are they exhibiting signs of memory loss or having difficulty completing their daily tasks? Do you have concerns about their ability to live independently? If so, consider discussing what a plan for increased care looks like. Offer to help identify resources for in-home help or continuing care communities they might consider if the need arises. These communities generally impose a standard of function for eligibility and there are often waiting lists for admission. It is smart to enroll with what is usually a no-obligation and refundable deposit.
2. Talk about cyber and telephone scams specifically targeting older adults. It is a good idea to stress the prevalence of internet hacks and the risk of speaking to anyone they do not know on the phone. No one from the IRS, SSA, or their insurance agency will ask for their social security or payment information over the phone. Computers are the biggest avenue of risk, specifically via phishing emails. Are you able to assist with installing anti-virus and anti-malware software on their computer? Can you help create strong passwords for their Internet accounts and save them safely in a password manager? Turn on two-factor authentication? Stress the importance of never clicking a link sent via email and notifying a loved one or professional advisor immediately if they suspect they have been victim to an attack.
3. Initiate a discussion about money management. Identify their trusted resources by explaining your desire to foster relationships that you may need in the future. If you have noticed any unusual spending behavior or mail that appears unattended, consider addressing this in a productive manner. Discuss any support they may need from you with their regular bill pay efforts, account maintenance or correspondence with professional advisors.
1. The Conversation Project is an organization dedicated to fostering important, productive family conversations regarding end-of-life care. You can download their helpful guide online here.
2. The Five Wishes Planner is a helpful document that guides an individual through some of the often-overlooked pieces of end-of-life planning. This resource can be downloaded off their website here.
Remember that these family conversations are often difficult to have, but they should come from a place of love and support. Communicate your willingness to be an advocate and resource to your family if possible but be prepared for the likelihood of encountering resistance. Ultimately, consider how you can walk away leaving the door open to future discussions.