If you have adult children, do they know how much money you make, how much you have tucked away, and how much you spend each year?
It is quite common that adult children are caught unaware or without access to funds when tragedy strikes. When a parent's finances are revealed only after death, or when a debilitating illness strikes, the responsibility can place a lot of stress on the offspring.
Although there are good reasons not to tell them everything. An immature or troubled child could try to misuse your money or goad you into handing over assets you might need later. Complicated family dynamics might make you hesitant to reveal all, and there is no perfect formula for when to open your books to your kids, but here are a few tips to consider:
If you suspect you won't have enough money to see you through retirement, you owe it to your kids to tell them. Perhaps you will end up needing their assistance, the earlier you involve them, the more time they will have to help you find resources and make plans.
Bigger numbers can wait
You may feel there’s not enough money to support a 25-year retirement and long-term care, but that sum might seem like lottery winnings to a 23-year-old. If you still have a spouse, and you are relatively young and healthy, it's fine to tell your children you think you have enough to be independent in retirement without revealing specific numbers. After 70, however, your kids or other trusted financial representative should know where your money is and how to access it.
Find the middle ground
It’s important to list of all your assets, with account numbers and any other details your heirs or caretakers will need to handle your affairs. Put it somewhere safe, and make sure that your children (or whoever will be your eventual representative) knows where it is and how to access it. If the information is on your computer, make sure the right people have access to the passwords they will need. By doing this, you've put off sharing the numbers, but provided assurance to all that in the moment of need, they'll have the necessary information they need.
Gather the kids
When you are ready to reveal your assets call a family meeting with all your children present. This is especially important if you're not going to treat them equally in terms of information and responsibility. If one child has your power of attorney and will be your estate's executor, you can reassure the others that you love them just as much, but you've chosen that sibling because of financial acumen, geographic proximity, or some other reason.
Introduce the family to your adviser
It may be good for your children to meet your legal adviser, to get a realistic picture of your situation. Ideally, talking about your end-of-life financial plan isn't the first chat you've had with your kids about your finances. Keep them in the loop as much as you feel makes sense according to their age, responsibility and your age and health, but make sure they know how to take care things if tragedy should strike.
If you are interested in learning more about estate planning or setting things up for your family, contact Bob Michaels for a FREE consultation HERE.
Bob Michaels is extremely passionate about providing the best possible legal experience for his clients, and focuses his practice on elder law, estate planning, business, and real estate matters. Bob has been able to provide piece of mind and a solid foundation to many folks in the Puget Sound area over the years and wants to provide resources and relevant information whenever he can.
To read more on this subject, click HERE.