By Mark Lamoriello, AIF® | President, Chief Investment Officer | 4.19.2018
It’s hard to talk about money; it’s still one of the major conversational taboos in our society. When talking about money is combined with end-of-life issues, like estate planning, it can be even more difficult. However, despite the discomfort, it’s important for you to sit down and talk about estate planning and financial next steps with your parents.
Why is it Hard to Talk About Money Issues?
According to information from UBS Investor Watch, talking about money issues can be challenging for a number of reasons:
- 46% of heirs feel like they don’t talk openly about financial issues in their families
- 43% of benefactors don’t feel like financial planning issues are pressing
- 23% of children are worried that they will appear greedy
Breaking through the taboos to talk about money and estate planning can be difficult—especially since it feels like your parents should start the conversation. It’s their money, and it feels presumptuous to broach the subject.
If your parents don’t bring it up, though, it might be a good idea to do so. The reality is that waiting can mean it becomes too late. Estate planning decisions should be made before there is the added emotional pressure of a serious illness or death, and discussing these matters now can mean fewer disagreements later, particularly with your siblings.
If your parents become unable to administer their affairs or if they pass suddenly, lack of knowledge can be devastating to family dynamics. In fact, UBS points out that knowledge of the estate plan ahead of time leads to a 50% drop in disagreements upon the death of a loved one.
Here’s how to start the conversation.
Ask About Your Parents’ Estate Plan
Don’t start out by trying to find out details of your parents’ accounts and assets. Instead of asking about financial numbers, find out if your parents have the right estate planning documents and if they have an end-of-life care plan. Let them know that you are interested in making sure their wishes are heeded in the event of an emergency.
It may be best to ease into the conversation by discussing your own efforts to create a will or establish a trust. If you have been working on your own estate planning, it’s natural to talk to them about that, and ask about what they may have in place so you can learn from them. Frame it as asking for advice for your own situation, rather than approaching it as though you are trying to take charge of their finances.
Approach the issue from a place of caring and sharing. Your only interest is to ensure their legacy is carried out as they intended, and the best way to do that is to communicate effectively.
Include Your Siblings
Depending on your family situation, it might make sense to include your siblings in the discussion. Not all families have a harmonious relationship though, so it may be difficult to coordinate this conversation. Do your best to at least inform your siblings of the discussion after you’ve talked with your parents, letting them know the important points of the estate planning arrangements made by your parents, assuming your parents agree.
What You Should Find Out
During the conversation, try to find out whether your parents have a will, power of attorney, and a healthcare directive. Your parents should hopefully let you know where the documents are stored, and how you can access them.
Other important information to get from your parents includes:
- Financial account numbers
- Insurance policies
- Contact information for financial professionals (accountants and attorneys, etc.)
- Information about their retirement plan administrator
- Passwords and other information needed to access accounts
- Who will act as the Executor or Trustee?
You don’t need access to accounts and information right now, but you should know where to find the information. Important information can be recorded and kept in a safe or with your parents’ attorney or executor. That way, your parents can feel at ease knowing that you won’t be able to access their assets now, but that you know the plan for them and understand how to access them when it becomes necessary.
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If you still have questions or concerns regarding this topic, reach out to our retirement plan team experts—we would be happy to help.