Family Talk
Elaine Bedel established Bedel Financial in 1989 in Indianapolis.
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowHave you ever wondered why siblings never talk or gather together once the parents are deceased? While there may be multiple reasons, one could be the feeling of being cheated in their inheritance.
Parents, who choose to treat their children differently regarding future responsibilities or asset split, need to share their logic with their children before it becomes reality. That’s one of the important reasons to have a family meeting. And, with the holidays approaching, this may be an excellent time.
If you think it’s too early to talk about health and future financial issues, think again. It’s better to be twenty years too early than five minutes too late.
Starting the Conversation
Getting the conversation started can be the hard part. It is generally up to the parents to invite the adult children into such a discussion. Unless encouraged to do so, children are usually reluctant to ask questions that may appear to challenge their parents’ ability to handle their own affairs. However, adult children can also start the conversation by expressing their desire to understand their parents’ wishes. The key is to set aside a specific time to have these conversations and allow everyone to be prepared to participate.
At least initially, it may be appropriate to exclude your children’s spouses from this meeting. It may be easier to talk through issues, ask for input, and explain your logic for decisions with fewer family dynamics. Once everyone is comfortable, adding spouses to the group may be helpful.
What to Talk About:
Financial Information. Your family may not be comfortable sharing specific financial details, i.e. investment information and asset values, and it is not necessary to do so. However, it is important that adult children have a general idea of the parents’ overall financial condition.
Future Roles. It is important for adult children to be informed of their responsibilities regarding their parents’ estate and healthcare decisions. Often an adult child is named as the executor of the will, the health care representative, or the trustee for a family trust. Being knowledgeable of their future roles and having an opportunity to ask questions of the parents before their responsibilities begin can be very helpful.
Medical Care and End of Life Choices. Parents should discuss their preferences for medical care and living arrangements if their health fails. If a long-term care policy has been purchased, it will be important for the adult children to understand the extent of the financial benefits and the qualifying conditions. End of life choices as documented in a living will should be discussed with an opportunity to ask clarifying questions. Having this conversation now will reduce the anxiety created if the situation ever arises.
Family Business Issues. If there is a family farm or business, the succession plan for both the management and the ownership needs to be thought through and then communicated. This is especially important if one or more of the adult children are involved in the business and others are not. Discussing these plans with the entire family can avoid potential conflicts.
Other Topics. Families will have unique situations that warrant conversations. Such topics may include the disposition of a family vacation cottage, specific financial assistance for grandchildren, or plans for continued support of charitable organizations.
Location of Documents and Names of Advisors. Adult children should be aware of the location of important documents. This includes will documents, trust agreements, insurance policies (life, medical, long-term care), property titles, and pre-planned funeral information. In addition, the names and contact information should be provided for advisors, including the estate attorney, wealth advisor, accountant, insurance professional, and other individuals who play an active role in the family’s financial planning.
Benefits of the Conversation
In addition to better understanding their future roles, sharing important information will allow adult children to understand their parents’ perspective and reasoning for certain decisions. The last thing parents want is to have their children experience hurt feelings or resentment toward one another. A conversation now regarding the parents’ desires and logic may avoid these future issues.
Summary
Don’t miss an opportunity to at least start a conversation regarding these important issues. If the family is spread across the country or around the globe, getting together in one location may not be easy. While face-to-face meetings are desirable, using technology to bring everyone together can be just as effective. Once the conversation has been started, it will be easier for the family to engage in continued discussions.
Elaine E. Bedel, CFP, is CEO and president of Bedel Financial Consulting, Inc., a wealth management firm located in Indianapolis. She is a featured guest each Wednesday on the WTHR (NBC, Indianapolis) Channel 13 News at Noon, "Your Money" segment. Elaine’s book, "Advice You Never Asked For… But wished you had," is available on Amazon.com. For more information, visit www.BedelFinancial.com or email Elaine at ebedel@bedelfinancial.com.