Contributed to EO by Saul Simon, a certified financial planner, a registered representative of Lincoln Financial Advisors and founder of Simon Financial Group. This article is the second in a series of three about having “The Talk” with your business partners, parents and adult children.
As we get older and hopefully wiser, more responsibilities fall upon us. We are often referred to as the Sandwich Generation—caught in the middle between aging parents and children.
We, as children of aging parents, have to look toward the future, and with that comes the delicate “talk with our maturing parents” (and/or senior relatives who may not have children or other involved family).
Brace yourself—this may not be easy for you to do or for your parents to hear, but to avoid serious issues in the future which could make a difficult time even more frustrating, this talk is necessary. It goes without saying, this conversation should not happen at a family birthday party, anniversary, Thanksgiving, or holiday celebration. It is very personal and should be scheduled at a quiet time when you, your parents, and any siblings are all together.
Setting the scene
This is a conversation that comes from a place of love and caring. It is meant to fulfill your parents’ wishes for the distribution of their most valuable and precious belongings. In addition, it will enable you to distribute their valuables and sentimental belongings to whom they want, when they want, and in the manner they want. The intention is also to create asset protection strategies so creditors, predators or ex-family members, cannot access the monies that your mom and dad worked so hard to accumulate.
The “talk” is also to discuss the necessary procedures should you have to deal with a parent’s inability to care for themselves. This includes not only physical but also mental conditions that can sometimes happen suddenly as parents age, and therefore without plans in place can make it difficult to handle financial matters and personal wishes at that time.
Challenges you may encounter
Sometimes parents do not wish to share their financial situation or even medical conditions with their adult children. Some even think they will be here forever, or at least for a very long time. While we hope that’s the case, realistically we know in our hearts it can’t be. The issue is that many older people want to stay in control and are afraid this “talk” means they have to give up their independence. Assure them at the outset that this is not at all the case.
What is the goal of “The Talk”
The primary purpose is to be able to maintain your parents’ way of life for as long as possible. This truly comes from a place of love and intention to fulfill your parents’ wishes. You never want to look at your loved one(s) and have to ask a question that they’re unable to answer. That’s why it’s important to have a plan in place so that when changes need to be made, you have the consensus of all involved and can arrive at amicable solutions ahead of the problem. You also need to know who are the executors, trustees, and beneficiaries of all your parents’ legal documents. You need the names and contact info for your parents’ trusted advisors, including their attorney, accountant, investment or wealth manager, insurance agents, doctors, and anyone else who is working with them on legal, medical, or financial matters.
Some subjects to discuss during The Talk:
Living arrangements, including but not limited to: where they will reside, with whom they might live if necessary, whether an independent senior facility is a possibility at some point, the need for a companion, other special needs, whether they have long-term care insurance
Financial arrangements, including but not limited to: bank accounts, investment portfolio information, properties, LLCs or partnerships, safe deposits boxes
Documents such as wills, trusts, automobile titles, property deeds, insurance policies, tax returns, Powers of Attorney, healthcare directives (eg, DNR)
Digital access: What are the passwords and logins for their online accounts such as credit cards, investments, banks, social media, emails
Distribution of family treasures, which may include jewelry, artwork, furnishings, housewares, silver, china, crystal
Charitable giving: hospitals, non-profits, universities, foundations, etc.
Monetary gifting to children or grandchildren up to US$15,000 per child, per year
Provisions for children’s and grandchildren’s college and advanced education
Funeral arrangements: What their wishes entail
Perhaps you need a professional quarterback
Depending on how many of these items your parents already have in place and how well organized they are, it can be an overwhelming task to pull everything together. For those with little or no experience in financial matters, it’s a best practice to have an outside caring, qualified resource serve as a family “quarterback” to facilitate this process. Here’s how such a professional resource can help families navigate this process:
By taking a 10,000-foot overview, they will facilitate this sensitive conversation with the family. When an outside authority is involved, parents listen and understand issues differently than when hearing them from their children, and positive actions can be implemented.
Keep in mind, this resource won’t replace you or your parents’ advisors, but will serve as the coordinator and quarterback for everyone. Often, professionals identify missed financial planning opportunities and coordination gaps that could cost families thousands or even millions of dollars, depending on their net worth.
I hope you will not consider all this information as only food for thought, but rather as fuel for action.
Having “the talk” with your parents needn’t be difficult and is meant to provide peace of mind to everyone involved. It will avoid any future family disagreements—we’ve all heard horror stories of how a parent’s passing rips a family apart over something as trivial as a coffee cup. You certainly don’t want that to happen in your family.
By planning ahead, having “the talk” and engaging a financial professional to facilitate the process, you can rest easy and enjoy every opportunity to spend time with your parents as they age.
Saul Simon is a registered representative of Lincoln Financial Advisors.
Securities and advisory services offered through Lincoln Financial Advisors Corp., a broker/dealer (Member SIPC) and registered investment advisor. Insurance offered through Lincoln affiliates and other fine companies. Simon Financial Group is a marketing name for business conducted through Lincoln Financial Advisors.
Lincoln Financial Advisors does not provide legal or tax advice. CRN-3730060-082421