A reader expressed concern about her parents, who have not shared information about their financial affairs with any of their children. She and her two brothers don’t even know if their parents have wills. The children are uncomfortable about bringing up the subject to their parents, even though the siblings are all adults.
What should you do if you are in this situation?
First, let me share what I have seen work best in my money management practice.
I think it is important to understand how much interaction a client wishes to have with his or her children, so I ask the client up front. As clients need more care, it helps me to understand how much moral support will come from family members.
I already know the client’s attorney and accountant, since we go over issues that might affect the wills, trusts, insurance policies and assets before committing to an investment program.
I also get to know the children in many cases. They do not necessarily know their parents’ financial details. Still, there is great comfort in meeting their parents’ close advisers.
But what happens in other cases, when the children just don't know what’s going on?
In my experience, a lot depends on the family dynamics. If there is a close, supportive relationship, then parents just need to be nudged a little.
If there is a good relationship between the parents and the children, there is a high likelihood that parents may appreciate a helping hand if it is offered. One way to start a dialogue is to ask if they need help organizing documents. That list of documents should include:
1. Wills and trusts
2. Insurance policies
4. Bank statements, securities statements
5. IRA beneficiary designations
6. Stock certificates
7. Recent tax returns
8. Powers of attorney
If your parents do not wish to show you these documents, you’ll have to respect their wishes.
You may ask that they make a record of where important documents are kept, including safety deposit boxes and other valuables -- for future reference. You will also want them to make a list of their attorneys, accountants and financial advisers, in case you need to contact them in an emergency sometime in the future.
When parents age, children may have to get involved more than they were before. Some elderly parents need to be cared for physically as they grow older. I have had experience with healthy clients who became ill suddenly, requiring hospitalization and nursing home care. The worst situations are those in which the parents did not trust the children enough to talk to them openly. While everyone wants to be helpful, in the worst cases, confusion and infighting among siblings can result.
If you are a parent, consider whether it’s time to think about engaging your children in a discussion about your finances and your wishes. If you are a child, offer to help, but don’t take over. Mutual respect is most important at this stage of life.
Julie Jason, JD, LLM, a personal money manager (Jackson, Grant Investment Advisers Inc. of Stamford, Connecticut) and award-winning author, welcomes your questions/comments (firstname.lastname@example.org). Please visit www.juliejason.com.
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